The economic success of the 2018 PyeongChang Olympics in South Korea will require sustainable strategies that recognise both the temporary and sustained benefits of the games. The 2014 Sochi and 2012 London Games involved cost overruns that illustrated the burdensome legacies that accompany hosting the Olympics, including massive taxpayer bills, security costs, and abandoned infrastructure. Conversely the legacy of the 1988 Seoul Olympics illustrates the potential of these events to promote economic growth, establish partnerships, effect infrastructure and developmental plans, and advance political development within host countries.
A renewed insight into the IOC and host nation’s longstanding approach of implementing ‘legacy plans’ is required in order to develop economically viable and prosperous strategies for PyeongChang, strategies that will deliver lasting local, regional and national benefits in the ensuing decades. This requires determining, based on existing circumstances, the strategies that will maximise the economic prospects of the Games.
Capitalising on the event
The Games can facilitate economic revitalisation through several avenues. Domestically, economic revitalisation is achievable through governmental support and the reduction of restrictive legal regulations. Indeed, the relaxed control over Olympic-associated intellectual property (i.e. merchandise, broadcasting rights) for domestic entities should be sufficient to facilitate small- to medium-scale entrepreneurship and innovation. This should be paired with financial subsidies for Olympics-based/associated venture capital start-ups, which will sustain and improve post-Games employment numbers in a country rife with socio-economic inequality. A concentration of entrepreneurship around PyeongChang will serve to balance regional development within an often-neglected region with national development by upgrading the region’s brand value and furthering the expansion of social overhead capital, thus pre-empting socio-economic stratification.
Utilising diplomatic and economic ties formed during the Games is encouraged. The Olympics have often been an instrument and facilitator for outward orientation within host countries; its promotion of foreign direct investment and international trade acquaints investors and businesses with an unfamiliar country or region. Indeed, an analysis of 196 countries between 1950 and 2006 illustrates how Olympic host countries typically experience an increase in exports in excess of 20%. Accordingly, showcasing high-tech industries during the Games is advised. Furthermore, PyeongChang and South Korea as a whole should be promoted as attractive destinations capable of supporting any form of meeting, incentive, convention and exhibition (MICE) event. While international attention remains focused on the region, the hosting of MICE industry events immediately following the Games is strongly encouraged; this can help to maintain international industry engagement in South Korea. The ultimate objective thereafter is to promote the signing of memorandums of understanding between domestic and international businesses, and to pursue the signing of free trade agreements with foreign governments.
South Korea’s national and economic standing should be advanced through the pursuit of political initiatives associated with the games. The PyeongChang Olympics is a symbolic opportunity to showcase, for the second time within a span of thirty years, the progression of South Korea’s economic success and soft power prowess, ideally mirroring the legacy of the 1988 Seoul Olympics. Generally, the economic success of a state can be measured through its socio-political achievements.
PyeongChang should aim to propel national development through enhanced integration and pride, exploiting the convergent nation-wide energy and enthusiasm which has emerged in the lead-up to the Games. The Olympics can be viewed as a catalyst for facilitating socio-political changes within governments and breaking long-standing political deadlocks upon controversial social and infrastructural projects, and as a means of highlighting the international attention focused on their country. President Moon Jae-In’s left-leaning, socially conscious Minjoo Party seeks to exploit the international attention afforded by PyeongChang to enact and justify additional and much needed reforms to the welfare system.
Moreover, PyeongChang is a potential for South Korea to demonstrate its soft-power capabilities. The attractiveness of South Korean culture and diplomacy internationally throughout the Games should be leveraged to promote national strength and standing, as well as to further political, economic, social and cultural progress. Such efforts would overcome the shame and reputational damage incurred by the 2016 corruption scandals, and represent South Korea as a stable and attractive destination for tourism and business. Henceforth, it is paramount that South Korea maintain its institutional transparency, uphold its governmental integrity, and bolster anti-corruption monitoring and enforcement during and after the PyeongChang Games.
PyeongChang’s economic success is also determinable within the context of improved inter-Korea relations. Already, North Korean leader Kim Jong Un has indicated that his government would consider sending a delegation to participate in the Games as part of a strategy to reduce tensions surrounding North Korea’s growing missile and nuclear capabilities.
The prospect of improving relations through the traditional Olympic values of reconciliation, peace and cooperation compels the South Korean government to extend an open invitation to North Korean athletes and politicians to attend and participate. This act of diplomacy also serves to alleviate security costs and assist in market stability during the Games, while promoting Korea overall as a politically stable location for tourism and business.
PyeongChang should be carefully leveraged for tourism development. Media attention surrounding the games should be exploited as an advertising campaign to promote South Korea as a future tourism destination. This can effectively put PyeongChang ‘on-the-map’, just as the 1992 Olympics propelled Barcelona from the 13th to 5th most popular European tourist destination by 2010. This will require enhanced organisational linkages and alliances (i.e. public-private, sport-tourism), attention to flow-on tourism throughout the Games through friendly and competent customer service and security, effective use of the international media to promote Korean destinations, and strategic use of business-to-business relations.
Responsible post-Games planning for Olympic facilities is crucial. While the public use of Olympic sporting facilities would be ideal, general analysis of the effects of Olympic facilities on host communities determines little to no associated economic benefits. Such ‘specialised sports infrastructure’ has minimal utility post-Games, is costly to maintain, and must subsequently be repurposed and/or privatised to turn a profit. PyeongChang must above all endeavour to successfully transition into a hub for Asian winter sports, mirroring the success of the 1972 Sapporo Olympics.
Investments in local and regional infrastructure will provide long-term returns, and improve PyeongChang’s overall liveability in the resulting decades. This includes fixating on the development of housing, transportation infrastructure, retail outlets, social welfare, and public amenities. As illustrated during the Seoul Summer Olympics, the government’s integration of event spending on the Games into its national planning served to create a competent and robust infrastructural system which has suitably accommodated the city’s population growth, and supported subsequent mass events. This was owed to the then-incorporation of sporting infrastructure, telecommunications and transportation into Seoul’s five-year urban infrastructure development plans.
However, land prices in PyeonChang have already increased in anticipation of the Games, and many poor farmland owners and residents no longer qualify for social assistance. Reducing inequality requires the imposition of adequate welfare and social assistance programs, subsidies, and tax exemptions for existing PyeongChang residents, as an egalitarian society ensures broader economic prosperity and social harmony, and thus a positive image for the government and country as a whole.
Ultimately, PyeongChang’s Olympic legacy will be determined by history and public acclaim, not the short-term ambitions of politicians and opportunistic businessmen. The Olympic legacy and its ideals are most effective and pronounced where they correspond with wider urban policies and long-term development plans for the host city and region. Good governance (through legal compliance, fair and transparent performance, and social integration) is conclusively the key to the success of Olympic Games, and both the government and everyday citizens of South Korea must come together if they are to achieve this objective.