gE Blog Series: International Business of Sports Part 2 - London 2012

The Olympic games are designed to be the final decider of the best athletes across the globe. Although hosting countries respect the competition, their main goal is completely different – provide as much stimulus as possible to their economy. London is in the midst of a massive advertising and building spree in preparation for the 2012 Olympics. In the process, Prime Minister David Cameron is busy promoting the tourism opportunities available in London and the London Chamber of Commerce and Industry (LCCI) is working to prepare local businesses for the expected influx of economic activity.

The LCCI seems to have its work cut out for themselves as a recent Deloitte research study reports that 55% of Small and Medium Enterprises believe the games will have no impact on their businesses. Only 14% are concerned about transportation issues and less that 10% are worried about staff availability - figures which are in direct contrast to what the LCCI is concerned about. Of specific concern is the “Olympic Route Network – a system designed to get athletes, officials, VIPs, sponsors and media to events on time. “ Businesses will have to plan ahead to make sure they can get their staff, deliveries and services to their premises on time.

One industry that will be a beneficiary of the games is private security companies. Original plans estimated the security staff needed would be 10,000 people at a cost of roughly 282m pounds. However, as the opening ceremony nears and plans are finalized, estimates are now at 23,000 people at a cost of 553m pounds. Personnel is coming from local police stations, the national guard, volunteers and private security companies. London-based G4S was selected as the official provider of security for the Olympic games and signed a contract last year based on previous figures. With these new estimates, the planning committee had to sign a new contract which was likely very favorable to G4S.

Another important industry will be logistics. For each set of games, equipment must be delivered, installed and removed within a tight time frame for each venue. The planning organization has chosen UPS to be the key logistics provider for the games and have already put the company to the test during the London Prepares series. UPS is also responsible for "all customs clearance, freight forwarding and courier services before, during and after" the games, Analytiqa reports. Although the games will have an official provider, local businesses will likely have to get smaller logistic providers to help them navigate the extra complications they will face during the games.

The Olympic Games are undoubtedly a boon for the local economies. Businesses just have to make sure they are prepared to deal with the influx of tourists as well as the increased complications.