LONDON 2012 - HEROISM OR HUBRIS
Image: London 2012
Route Network (ORN). Costing £70m to implement, the ORN closes major roads to all non-Olympic traffic between 6am and midnight throughout the Games. Two thousand people are involved in marking the changes to the road network, and a team of enforcement personnel will be responsible for keeping the network clear during the games. “Our strong advice is to avoid driving in central London, around the ORN, and around venues,” said Garrett Emmerson, TfL’s head of surface transport.
The Impact on Business For the sponsors of the Olympics, the benefits are already apparent as they capitalise on their exclusive rights to publicly promote their involvement with the Games. Atkins, the engineering consultancy that helped to design the London games, is using its status as a “London Olympics Official Supplier or Provider” to win business from Asia and the Middle East. It has just won a contract to advise the Qatari Government on its plans for the 2022 World Cup. Atkins chief executive, Uwe Kruger, told the Financial Times, “We delivered the Olympics under budget and ahead of time; we are seeking to utilise the experience from that terrific opportunity in Asia and elsewhere in the world.” The company plans to increase the value its overseas operations from 55 to 75% of its total sales revenue in the next three years on the back of its Olympic involvement. Procter and Gamble (P&G) are using their sponsorship to build international recognition for its corporate brand, as well as the many individual personal care brands that it holds. Nathan Homer, P&G's UK and Ireland Olympic Projects Director, told the BBC that the main driver behind their sponsorship deal, “is to build the business. Anyone who does a partnership deal and says it is not to build their business, then you wonder what they are doing it for." P&G expect to make $500m in additional sales worldwide revenue this year on the back of its Olympic involvement. P&G is also using the opportunity to build 6 • Global Business Magazine • July 2012
its reputation for corporate and social responsibility by sponsoring the Mayor of London's “Capital Clean Up” campaign and running a sports coaching programme under the Gillette brand. Payment partner Visa is pursuing an aggressive policy of exclusivity. Visa came under fire for insisting that all online purchases of Games tickets be made using Visa cards. It has also removed 27 ATMs from the Olympics venues and replaced them with just eight Visa-only cash machines. Visa insists that the exclusivity clauses in its sponsorship agreement allow them to ban the use of other cards in the Olympic areas. The stringent rules drawn up by the IOC to protect sponsors are drawing criticism from the many other businesses that are involved with the games. All non-sponsor businesses that won contracts to work on the 2012 Olympics were compelled to sign a “no marketing rights” protocol which prevents them from even mentioning their links to the events in advertising and press releases. Tom Foulkes, head of marketing for the London-based engineering and construction group, Arup, said they were prevented from disclosing the projects that they had delivered at the Olympic Park because of the protocol. Adam Marshall, director of policy at the British Chambers of Commerce, said that that suppliers have been unable to create games-related job titles and are restricted to mentioning Olympic bodies only in materials that list at least nine other clients. He went on to point out that some of the protocol’s restrictions would remain in place even after the games. Pierre Williams, spokesman for the Federation of Small Businesses, said, “In its almost paranoid attempts to protect the Olympic brand and its corporate sponsors, it has largely destroyed the goodwill that was there for the taking from (non-sponsor) businesses supplying the games.” While sponsors are happy with their involvement in the games, there are few signs that the “Games Dividend” is trickling down to local businesses and communities.
East London has one of the highest rates of deprivation not only in London but in the country as a whole. While the Games have created some jobs for Londoners, there is much local bitterness that the jobs created have not been as numerous, nor as high quality, as many had hoped. Meg Hiller, the Member of Parliament for east-London borough Hackney, said that the Games hadn’t delivered sustainable employment and skills. “It’s not just one-off little jobs that people want and need, it’s the long term jobs that are important,” she said. The organiser of the Games, LOCOG announced that in total some 12,000 temporary jobs in security, retail, catering and cleaning had been created, but many more roles are being filled by 70,000 unpaid volunteers. The positions advertised by security firm G4S were oversubscribed ten times within days of the adverts being posted. Meanwhile the latest unemployment figures show that over 426,000 Londoners are unemployed and the host borough, Newham, has a 15 % unemployment rate – the second highest in Britain.
The Olympic Legacy “The best Olympics regenerate neglected districts, inspire children to take up sport and leave a city furnished with world-class venues and rolling in Olympic dollars – Barcelona is a good example of this. The worst are poisoned chalices that leave a nation in debt and a city overrun by white elephants – look no further than Athens,” wrote Simon Usborne in the Independent as the Beijing Olympics drew to a close. The districts where the Olympics are being hosted are among some of the most neglected districts in Britain, with childhood poverty and unemployment endemic throughout east London. But so far the number of jobs created has been small, the impact on tourism has been disappointing, and local and national businesses have been hampered in their efforts to build international trade based on their Olympic involvement. The sporting legacy has also been called into question: sports facilities across London are closing as councils bear the costs of the Olympics, and the organisers have insisted
that the walking and cycling routes that link the centre of the city to the Olympic districts must be closed for the duration of the games. Local resident Gerhard Weiss told the London Cycling Campaign, "It makes absolutely no sense to invest in a walking and cycling route to the Olympic Park and then ban walkers and cyclists at the time when it’s likely to be most popular." Whilst the Games themselves have not delivered demonstrable benefits to the people and businesses of east London, perhaps the infrastructure, quality housing, and skills and experience that will remain after the games will deliver a lasting improvement to the prospects of this deprived corner of London. That will require a commitment on the part of the organisers, to tend to the legacy of the games in the months and years to come. Poor legacy planning can lead to a disastrous aftermath to the games, as the experience of recent hosts has shown. “While many factors are behind the crippling debt crisis, the 2004 Summer Olympics in Athens has drawn particular attention,” Greek journalist Derek Gatopoulos told the Huffington Post in June. “If not the sole reason for this nation's financial mess, some point to the games as at least an illustration of what's gone wrong in Greece.” Sydney also struggled for ten years to turn its Olympic park into a thriving suburb. Barry O'Farrell, the Premier of New South Wales and former Minister for Western Sydney , said, "Because of a failure to capitalise on the legacy you don't have to go very far to get an argument from people that…whilst it was a great two weeks in Sydney's life it hasn't actually delivered much extra to the city." Michael Knight, who chaired the Sydney Organising Committee, warns: "The team I led, we were so obsessed with getting the Games right we didn't have a lot of time to think about the afterwards. If we had our time over again we'd probably have a second team on that from the beginning." While they have successfully delivered the summer Games, when it comes to creating a positive legacy for the people and businesses of east London the organising committee still has plenty to do. July 2012 • Global Business Magazine • 7
