The preparations for London 2012 coincided with the worst global economic crisis since the Second World War. Accordingly, few would have questioned the logic of paring back investment in the Games. Instead, the Government maintained its investment in the Olympics, as did the sponsors, and the Games went on to be hailed around the world. As a result, the London Olympic legacy is set to have a long term positive impact on UK businesses looking to secure international contracts.

The Intangibles
It is still only a matter of months since the spectacular closing ceremony, so making grand predictions about the overall effect of the hosting the Olympics would be premature. As David Cameron said, “the true legacy of London 2012 lies in the future. Though much has been done, I am acutely aware that the drive to embed and secure the benefits of London 2012 is still to come.” Still, some of the effects of the Games are already being felt; moreover, the event itself brought a sense of rejuvenation to the UK – prior to the Games, Britain seemed to have lost its self-belief to the extent that there was even a sense of pessimism about the Games themselves in the lead-up. Once the opening ceremony began, however, that attitude was immediately replaced by a sense of pride, both in how well Team GB were performing and how well the Olympics were being received worldwide. “There are a couple of big impacts that weren’t predicted, and one of them is the sense of pride and confidence that the UK and UK plc has got. This in itself will have a psychological impact on business,” said Mayor of London, Boris Johnson. “The most important thing about the Olympics is that they have shown that Britain really can do things. We have shown the world we are a happy, ambitious, modern, successful economy; we have shown incredible logistical skills and we now have every reason to be confident in ourselves and in the future.”

Improved international profile
There is no doubt that the 2012 Olympics have enhanced Britain’s reputation around the world. Britain boasts one of the most impressive ‘brands’ on the international stage and the Olympics provided the perfect global showcase to remind the world what is great about Great Britain. The marketing campaign ‘GREAT’ was set up to ensure the London 2012 Olympic and Paralympic Games were used to effectively promote the UK abroad, shape international perceptions and help deliver long-term trade.

Supporting all trade and investment activities, the aim of ‘GREAT’ is very simple: to help the world discover, or rediscover the value of doing business with Britain – in 2012 and beyond. GREAT campaign adverts were seen by 90 million people across 14 cities in nine strategically targeted countries. The 14 key cities included Beijing, Berlin, Los Angeles, Mumbai, New York, Paris, Rio de Janeiro, Sydney, Tokyo, and Toronto. Furthermore, it’s estimated that 70 per cent of the population in each of the target cities saw the advertisements promoting GB as an attractive trading partner on billboards, TV, or in cinemas.

Value for money?
Hosting the Olympics certainly doesn’t come cheap. Final estimates put the bill at around £9bn. However, the Government estimates that Britain can expect to receive £13bn of intangible “economic benefits” from holding the Olympics over the coming years. Sir Alan Collins, Managing Director of Olympics Legacy at the UK Trade & Investment (UKTI) feels that the money invested in the Games, particularly funding for the UKTI’s legacy efforts, will be returned with added interest. “The Olympics cost lots of money but it’s very much worth it. We know that every pound spent on UKTI’s activity generates £19 for British exporting and investment. What that would lead to, we hope, is a billion pounds worth of benefit to the British economy as a result of the Games time activity.”

While the precise impact of hosting a successful Olympics can be difficult to pin down, research by Rose and Spiegel for the Economic Journal, titled ‘The Olympic Effect’, found strong evidence of a large persistent effect of hosting the Games on both exports and overall trade. Empirical results of the research showed that countries that have hosted the Olympics “seem to have exports over 20 per cent higher” and that hosting “tends to increase a country’s openness substantively and permanently.” Further research published by Deloitte showed that more than a quarter of British businesses (28 per cent) believe the successful delivery of London 2012 will help UK firms to boost their exports to the host countries of future major events. The research also found that 50 per cent of companies feel the Games have increased confidence in British companies’ ability to deliver large infrastructure projects.

Qatar
Sport is a key element of Qatar’s National Vision 2030, spearheaded by the Emir and Heir Apparent, who regard sport as a way of building ‘Brand Qatar’ internationally. The forthcoming 2015 Men’s Handball World Championships and the 2022 World Cup will present great opportunities for UK businesses to bring their wealth of experience from the 2012 Olympics to the Gulf State.

Speaking on Qatar’s successful bid for the World Cup, the British Ambassador to the State of Qatar, Michael O’Neill, said that Britain could, “look forward to a decade of partnership as Qatar prepares to host the 2022 FIFA World Cup. O’ Neill added that, “the UK stands ready to support the delivery of a successful World Cup, drawing from experience with the 2012 Olympic and Paralympic Games.”

Assisting Qatar in preparations for 2022 should establish strong trade links to the Gulf State which is, per capita, the second richest country in the world.

Britain delivers
Around one billion people tuned into Danny Boyle’s awe inspiring opening ceremony. The curtain raiser showcased the best of British from its storied historical and literary past, to its industrial and scientific breakthroughs, all played out against a backdrop of Britain’s celebrated musical heritage. It even had the Queen and 007 jumping out of a helicopter! But the opening ceremony was also the first time the world got to see what an incredible logistical project Britain had undertaken. And throughout the Games, a massive global audience witnessed Britain executing this mammoth task flawlessly. Dennis Hone, Chief Executive of the Olympic Delivery Authority believes that Britain’s ability to complete massive infrastructure jobs like the construction of the Olympic park, in a timely, cost-effective manner, will improve the chances of British companies securing international construction contracts. “Building the Olympic Park on time and within budget has proved again that Britain can stand comparison with the very best when it comes to delivering major construction projects.”

Russia
The Russian City of Sochi has been awarded the 2014 Winter Olympic and Paralympic Games. This will be the first time that the Winter Games has taken place in Russia and Dmitry Chernyshenko, organising committee president and CEO, is eager to utilise Britain’s experience in hosting a successful Olympics. “Britain hosted London 2012, so many British companies are the best suppliers to Olympic and Paralympic organising committees,” he believes.

More than 1 trillion roubles (£22bn) will be spent on the preparations for the 2014 Winter Olympic Games with 699.3 billion roubles (£14bn) allocated from the federal budget. The projected budget for construction of 12 custom-built sports venues, located in two clusters (the “Coastal Cluster” for ice events and the “Mountain Cluster” in Krasnaya Polyana) is about 200 billion roubles (£4bn).

Contracts arising from the Games cover a variety of sectors including engineering, construction management, security, training, broadcasting, event management, ticketing, crowd control and branding, hospitality and catering. UK companies have won or are bidding for contracts in each of these fields.

Russia is keen to make these Games the greenest yet. The Russian Green Building Council (RuGBC) has been working with state-corporation, Olympstroy, and the Sochi 2014 Organising Committee to accelerate the use of green standards and certification and, in particular, they are seeking the assistance of British firms. Sochi’s desire to import British expertise is evidenced by their decision to adopt the UK’s BREEAM certification system. BREEAM, an environmental assessment method and rating system for buildings, will be used for ten key venues. “A mind shift is taking place, thanks to the determination to go green,” says Guy Eames, RuGBC CEO. “We are proud to be involved and that British and other EU players are getting engaged as a result.”

Seizing the opportunity
The important job facing the Government and British business is capitalising on the legacy of the Games. During the Olympics, UKTI transformed Lancaster House in London into the British Business Embassy hosting events designed to ‘sell’ Britain with high profile speakers and overseas guests in attendance. A number of success stories, including UKTI securing a Memorandum of Understanding (MOU) to develop deeper relations between the UK and Taipei City as it prepares to deliver the 2017 Universiade, came about from the meetings. The MOU will also help UK companies to capitalise on business opportunities associated with future global sporting events in the Taiwanese capital, for which contracts are expected to total £750m.

In fact, the Government has implemented a number of programmes to ensure that the positive impact of the Olympics is felt by exporters and investors for decades to come. ‘Great Britain Delivers’ is a multi-media showcase that has taken the message to the world that the UK can deliver major global projects on time and on budget. A number of British Business Embassy programmes will be present at major international events like the Sochi Winter Olympics in 2014 and the Asian Games in Korea in 2014.

Trade missions will be also be undertaken in countries set to host the Olympics, Winter Olympics and the FIFA World Cup in the coming years, including Brazil, Russia and Qatar, to export the expertise and skills of UK firms.

Sport
It is perhaps these trade mission to future host countries that will prove to be the most important legacy of the Games. Over the next decade there is a plethora of large sporting events in highly attractive BRIC and Gulf markets, and Britain’s ability to deliver the 2012 Games so successfully will stand it in good stead to make the most of these opportunities. UKTI hopes to help firms emulate the success of Australian companies, which, following the Sydney Olympics in 2000, were successful in winning business across the world supplying other major international sports events. For this reason Host2Host was established – a programme which “maximises the economic benefits of hosting the London 2012 Olympic and Paralympics Games by creating links and sharing best practice with previous and future host cities of Olympic Games and other major sporting events.”

Host2Host will provide a springboard for British exporters and investors to develop further trading links and investment opportunities. In fact, agreements have already been signed with Sochi in Russia (2014 Olympic and Paralympics Games), Rio de Janeiro (2016 Olympic and Paralympics Games), and Taipei (2017 Universiade).

Host2Host encourages a series of activities including trade missions and networking events to enable the UK to share knowledge of how staging major international sporting events can be converted into long-lasting business partnerships and success.

Legacy planning
Britain’s ability to ensure a lasting legacy from the Games through long-term planning is one of the reasons its expertise in the sporting event field is now so sought after. The development of the London Legacy Development Corporation (LLDC) is just one example of the foresight of the Olympic organisers. The LLDC is charged with managing the long-term planning, development, management and maintenance of the Queen Elizabeth Olympic Park and its facilities after the London 2012 Games. The Corporation is already planning the removal of temporary venues and walkways and the conversion of permanent venues into ‘legacy mode’, while bids to run the permanent venues remaining on the Olympic Park are already being invited. In past Olympics, the facilities that were built for the Games have often been largely unfit for use beyond the event itself, and subsequently have been underused and poorly maintained. London has bucked that trend ensuring that facilities built for 2012 serve an important function beyond the Olympics.

Security
Security is expected to become a growth export market for UK firms in the aftermath of the Games. The global security export market is currently valued at roughly £62bn while overall global security spend is expected to reach £330bn by 2015. The UK enjoys a substantial 20 per cent market share on global defence exports but security sales overseas have, up until now, failed to reach their full potential. “So far the UK has a pretty small share (of the global market), which is why we think there is huge scope to do more,” says Simon Everest, Head of the UKTI’s Defence & Security division.

Britain’s security industry employs around 165,000 workers and exports reached £2.6bn last year. But with the London Games showcasing the successful implementation of security logistics such as event security, border check equipment and secure venue design, these figures are set to grow exponentially. As a result, UK firms are strongly positioned to obtain security contracts worth around £1.5bn between the Sochi Winter Games in Russia in 2014 and the Rio Olympics in 2016.

Brazil, one of the world’s fastest growing major economies, is the UK Government’s main target for security export growth, with both the World Cup and the Olympics taking place in the vast South American country. Meeting the UK’s target for growth in security will also require sustained increases in cyber-security related exports, which represented about a third of the UK’s security exports last year. Simon Everest has described cyber security as “absolutely the biggest growth area.”

It will be at least a decade until we really see the overall effect of the 2012 Olympics, but there is no doubt that Britain is making great efforts to ensure that it capitalises from hosting the Games. Though the short term opportunities may be primarily related to assisting host countries in the running of major sporting events, the links established with these nations should result in wide ranging export opportunities for Britain.