More than 4,000 business leaders and politicians are gathering in London for an Olympics investment conference that the government says could generate £1bn of UK deals.
Lancaster House in central London is to be repositioned as the British Business Embassy during the Games, and play host to a series of events to promote British business to global leaders. There will be 17 held in total including a special business summit for China.
UK Trade and Investment, the government’s department for boosting trade overseas, has identified potentially £4bn of “high value opportunities” for UK firms to work on overseas, plus up to £6bn from direct investment in UK projects from international companies.
UKTI says inward investment by overseas firms created 52,741 new jobs in the year to the end of March, an increase of 26 per cent increase from the previous year.
In total, the government hopes the Olympics and legacy projects will add £13bn to the UK economy over the next ten years.
Economists, however, are not all in agreement that the Games will prove a boost to UK business. Richard Jackman, professor of economics as LSE told economia, "It’s possible to measure financial elements of the Games – the costs, the immediate income and spin-off revenue from restaurants or hotel spend. It becomes less straightforward when measuring the impact afterwards – the change in the character of an area, the sites that London inherits as a result. To what extent their impact is new or a result of displacement is less clear.
"There may be a gross benefit in terms of new facilities, but this was probably not the most efficient way of achieving it."
Raymond Sauer, economics professor at Clemson University, agreed. He said, "Investment in the Olympics is first and foremost an investment in sport. That’s the spirit of the Games. To see it devolve into an excuse or a vehicle for economic development would be unfortunate.
"Claims that it’ll do much for the economy are overstated."
The government is relying on the Games to give the UK economy a much-needed boost after official figures yesterday showed that the UK GDP shrank for the third consecutive quarter, by 0.7 per cent to the end of June.
This story first appeared in economia.