As the Tour de France leaves the UK, have the economic benefits been over-hyped?
Henry Overman, professor of economic geography at the London School of Economics, says Yes.
When a major sporting event is announced, it’s common to see politicians use economic arguments to justify public investment.
But there’s a danger these impacts may be over-inflated, in part because they’re often difficult to measure.
Our recent evidence review of 36 studies, looking at the impact of such events, suggested that there’s a limited empirical basis for the economic claims so often used by governments or tourism bodies.
Where benefits did accrue, they tended to be very local to the project and primarily property-based, such as boosting local house prices.
Focusing on the economic benefits also means the many other intrinsic benefits these events offer – increasing sporting participation, health outcomes, or fostering community spirit – may be downplayed. Looking at these benefits instead not only presents the most compelling argument for hosting such events – but also a more accurate one.
Stephanie Hyde, head of regions at PwC, says No.
The Tour de France has been a golden opportunity to showcase the energy, dynamism and spirit of the UK beyond London.
The race has put Yorkshire on the global map, providing a fantastic shop window for the county, injecting millions of pounds into the economy, and attracting thousands of visitors. Initial estimates suggest that at least 2.5m people lined the routes for the two Yorkshire stages, significantly surpassing expectations.
Hosting mega sporting events encourages tourism, employment, and urban regeneration. London 2012 is a great example.
As the Tour de France departs the UK, the positive impact and legacy of increased city visitor numbers and business activity will continue to gather momentum.
With the Glasgow Commonwealth Games and Invictus Games in London still to come this year, British business has a hat-trick of opportunities to capitalise on sport’s potential to stimulate growth across the economy.