Report Suggests Sports and Culture Projects Have Little Local Economic Effect
Contrary to what evangelists of the "Bilbao effect" and sports stadium advocates would have you believe, a recent report from a UK government policy initiative cautions that major sports and culture project do not have a strong economic impact on their communities.
Contrary to what evangelists of the “Bilbao effect” and advocates for sports stadiums would have you believe, a recent report from a UK government internal analysis unit cautions that major sports and culture projects do not have a strong economic impact on their communities. “The overall measurable effects of major sport and culture projects on a local economy tend not to be large and are more often zero,” write the authors of the text for the policy-analysis What Works Network. The document goes on to add two other findings: that the income effects of projects “are usually small and limited to the immediate locality or particular types of workers” and that “given the significant cost of most major sport and culture projects they are unlikely to be cost-effective in terms of increasing local economic growth.”
The points cited are drawn from a more in-depth report released earlier this year by the What Works Centre for Local Economic Growth, a collaboration between the London School of Economics, research organization Centre for Cities, and consulting firm Arup, and one of seven independent centers that comprise the What Works Network. Back in July the center released a detailed “Evidence Review” focused on assessing the local economic impact of sports and culture. To do so, the group analyzed existing project evaluations from a range of OECD countries — although they’re quick to note that while they began with 550 documents, only 36 met their minimum criteria for reliability, all related to large-scale events and projects, most to sports (e.g. the Olympics). That makes for a very small and limited sample size, but the center is hoping that their findings can offer some guidance nonetheless.
Beyond positing that large sports and culture projects result in minimal boosting of local economies, the July report drills down to consider specific areas of impact. The center found that the building of new facilities tends to have more of a positive economic effect than the hosting of events, though it goes on to caution:
As the benefits of new facilities tend to be very localised and related to property prices and regeneration, they should be part of a broader strategy rather than seen as stand-alone projects. They should not be relied upon as the major component of a job creation strategy.
In terms of types of impact, the report states that there’s usually little in the way of new employment, a little more in wages and income; the wage bump is “usually small and limited to particular areas or particular types of workers,” however. The area affected most positively by these types of projects, according to the center, is real estate, a value strongly tied to proximity to the given event or facility. Notably, architecture may play a role in this too, as the report states:
The nature of the facility provided also seems to influence the findings. The new Wembley Stadium included a distinctive iconic element visible from a considerable distance, which was found to cause a significant stadium effect at relatively more distant properties.
The authors follow this with an important caveat regarding what increased property prices really mean:
Property prices tend to capture (‘capitalise’) benefits that come from improvements in a locality. So it is possible that these increases in property prices are capturing improvements to the local economy. However, given the findings on employment and wages it seems more likely that these property price changes are capturing improvements to local amenities rather than to the local economy.
Perhaps most importantly, the center makes a point of listing areas where far more information is needed to better determine economic impact. These include studies of “the extent to which projects lead to net increases in visitor numbers for the area as a whole,” of “cultural projects overall,” of smaller projects, and of “the impact of recurring sport and cultural events, such as annual festivals or tournaments.” In other words, there’s much more work to be done. But given the billions of dollars institutions and governments continue to sink into these projects, it’s certainly worth doing to try and see where they’ll come out on the other side.
h/t The Stage
