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Two French athletes hug during the athletes’ parade at the closing ceremony of the 2012 London Olympic Games in London on Aug. 12. (Leon Neal/AFP/Getty Images)
LONDON—It’s over. The 2012 London Olympics has been a huge sporting event and, in the hearts of many a British citizen, a huge success as a spectacle and advertisement for the country. Heck, even the sun shone.
All around the country the feel good factor had been growing since the first of the 8,000 Olympic torchbearers took the flame across Great Britain, and will no doubt continue for days now that the games have closed. The question remains though, what will happen when the flame dims?
The games were here to “inspire a generation” and inspiration is much needed, for behind the sense of camaraderie and the success of Team GB, the woes that have cast a shadow over the economy for some time now remain: any short-term benefit business felt because of the games may not provide anything more than short-term stimulus.
While it is true that 40 percent of London companies reported increased demand, outweighing the 27 percent who reported a negative impact (The Financial Times after a cross-sector survey conducted by Deloitte), we have yet to see how that translates financially in the capital or throughout the country.
The news stories underlying the health of the U.K. economy that have taken second place during the Olympics remain:
First, the eurozone crisis: It continues, with the European Central Bank announcing last week a more precise definition of what “doing whatever it takes” to save the euro actually means. Things have become progressively more serious: the 500billion euros (US$614 billion) or so that Spain may need in a bailout is more than four times Greece’s initial rescue needs in 2010. While firmly and resolutely outside the euro itself, the U.K. suffers from the same ails from over-borrowing and the same impact of financial unease.
Second, U.K. banking crisis: Just over five years ago the U.K. woke to the news that the banking industry was about to go into cardiac arrest. The bad news continued last week with the announcement that Barclays is subject to another Financial Services Authority (FSA) investigation. Of course, Barclays has taken the brunt of the storm over the LIBOR (London Interbank Offered Rate) scandal, but many others are implicated.
Third, growth forecasts: The short- and long-term growth forecasts have recently been downgraded again and, if there is no short-term positive change, the common belief is it may have further to go later in the year. Does the U.K. government borrow money it cannot afford, or can the Bank of England help release the liquidity the banks now have after the substantial quantitative easing released into the economy?
So what has this got to do with the Olympic flame I hear you cry? Well, as I see it, there is a real opportunity, beyond any challenge the London Organizing Committee for the Olympic Games (LOCOG) Legacy team has to make to balance the books; how do the British rally to maintain the momentum and spirit of communal winning?
Can we as individuals, businesses, and society use the emotional legacy as a spark to create the faintest flicker of confidence, or should we simply revel in the afterglow of London 2012 while dealing with the return of the economic reality? The question is perhaps more social than economic, albeit the two, in my opinion, are impossibly inseparable influences.
The recent banking scandals and the Mille Dowler phone hacking scandal (Millie was a 13-year-old English girl who was abducted on her way home from school in 2002 and subsequently murdered) with their implications of corruption (financial and moral) could spark positive social outrage, but nothing akin to the outrage of the riots that raged through some of Britain’s cities not so long ago. …
Nothing can help transform today’s youth and, as a consequence, the economy, like sports. It falls to us all to keep the Olympic legacy alive, to keep the flame burning, and to inspire a generation.
Geoff Major founded BlueDucks Limited (www.blueducks.com) in 2001 to help business change by looking at the customer experience “a little differently.” Copyright Troy Media Corporation (www.troymedia.com)
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