The economic success of the 2018 PyeongChang Olympics in South Korea requires sustainable strategies which recognize the temporary benefits of the games, and which persisting beyond its conclusion. Prior cost overruns of the 2014 Sochi and 2012 London games illustrated the burdensome legacies which accompany hosting the Olympics; including massive taxpayer bills, security-costs, and abandoned infrastructure. Conversely the legacy of the 1988 Seoul Olympics illustrated the potentials of such mass events in instigating economic growth and partnerships, effecting infrastructure and developmental plans, and advancing overall national political development within host countries.
A renewed insight into the IOC and host nation’s longstanding strategy of implementing “Legacy Plans” is required in order to advance economically viable and prosperous strategies for PyeongChang; strategies which will deliver lasting community, regional and national benefits in the following decades. Such requires determining what strategies, premised on existing circumstances, would best maximize the economic prospects of the games.
The games should facilitate economic-revitalization through multiple avenues. Domestically, economic revitalization is achievable through governmental support and reduction of restrictive legal regulations. Indeed, the relaxed control of Olympic associated intellectual property (i.e. merchandise, broadcasting-rights) for domestic entities would be sufficient in facilitating small and medium scale entrepreneurship and innovation. This must be paired with financial subsidies for Olympic based/associated venture capital start-ups, which would sustain and improve employment numbers post-games in a country dodged with socio-economic inequality; colloquially termed as “Hell Joseon”. A concentration of entrepreneurship around PyeongChang serves to balance regional development by upgrading regional brand-value, and furthering the expansion of social-overhead-capital; thus pre-empting socioeconomic stratification.
Internationally, utilizing diplomatic and economic links formed during the games is preferred and encouraged. The Olympics has often been seen as promoting foreign direct investment and international trade; by familiarizing investors and companies with an unfamiliar country or region. Host countries normally experience an increase in outward orientation; as an analysis of 196 countries between 1950 and 2006 illustrate how Olympic hosting countries typically experience an export increase in-excess of 20%. Accordingly, attention upon the showcasing of high-tech industries (i.e. IT, security, green industry) during the games is prescribed. This must be combined with the positioning of PyeongChang and South Korea as an attractive destination capable of supporting any form of meeting, incentive, convention and exhibition (MICE). While international attention remains focused on the region, the hosting of industry MICE events immediately following the games is highly suggested in order 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 between Korea and foreign governments.
Secondly, 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 a second time within the 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 is measurable through its socio-political achievements.
PyeongChang should propel national development through enhanced integration and pride; utilizing convergent nation-wide energy and enthusiasm. The Olympics is an often-used catalyst and self-induced-shock in breaking political deadlocks, and in leveraging infrastructure projects which would not have otherwise proceeded. President Moon Jae-In’s left-leaning, socially conscious Minjoo Party seek the opportunity to exploit the international attention afforded by PyeongChang to enact and justify additional much needed reforms to the welfare system.
Moreover, PyeongChang should be interpreted as a demonstration of Korea’s soft-power capabilities; as an opportunity to upgrade the national-brand. The attractiveness of South Korean culture and diplomacy internationally throughout the games should be leveraged to promote national strength and standing; to progress in politics, the economy, society and culture. Such efforts would overcome the shame and reputational damage incurred by the 2016 Corruption Scandals, and represents Korea as a stable and attractive destination for tourism and business. Henceforth, the maintenance of institutional transparency, upholding of governmental integrity, and bolstering anti-corruption monitoring and enforcement during and after PyeongChang is paramount.
PyeongChang’s economic success is also determinable within the context of improved inter-Korea relations.
Already, the North Korean leader Kim Jong Un in his 2018 new year speech indicated that his government would consider sending a delegation to participate within the games; as part of a reconciliatory strategy to reduce tensions surrounding North Korea’s growing missile and nuclear capabilities.
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 diplomatic act also serves to alleviate security costs and assists in market stability during the games, while promoting Korea overall as a politically stable location for tourism and business.
Third, PyeongChang should be carefully leveraged for tourism development. Media attention surrounding the games should be opportunistically leveraged as an advertising campaign; promoting Korea as a future tourism destination. This can effectively place PyeongChang as a city “on-the-map”; just as the 1992 Olympics propelled Barcelona from the 13th to 5th most popular European tourist destination by 2010. This requires enhanced organizational 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 position Korean destinations, and strategic use of business-to-business relations.
Fourth, responsible post-game plans for Olympic facilities is crucial. While the post-game public use of Olympic sporting facilities is ideal, general analysis of post-games sports facilities on host-communities determine little to no economic benefits associated with such facilities as stadiums and arenas. Such “specialized sports infrastructure” has minimal general-use utility post-games, are costly to maintain, and must be subsequently repurposed and/or privatized to turn a profit. PyeongChang must above-all endeavor to successfully transition into a hub for Asian winter sports; mirroring the 1972 Sapporo Olympics and Sapporo’s subsequent sports legacy as a winter sports-hub.
Lastly, investments in local and regional infrastructure will provide long-run returns, and improve PyeongChang’s overall-livability in the resulting decades. This includes fixating on the development of housing, transportation infrastructure, retail outlets, social welfare, and public amenities. As illustrated by the Seoul Olympics, national benefits accrued as the government integrated event spending into its national planning. Olympic infrastructure, transport and telecommunications were then incorporated into Seoul’s five-year urban infrastructure development plans.
However, already increased land prices in PyeongChang in anticipation of the games has meant many poor-farmland owners and residents no longer qualify for social-assistance. Reducing real inequality requires considering 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 societal harmony, and thus a positive image for the government and country as a whole.
Ultimately, PyeongChang’s Olympic legacy is determinable by history and public acclaim; not the short-term ambitions of politicians and opportunistic businessmen. The Olympic legacy and its ideals is most effective and pronounced where it accompanies the grain of wider urban policies, and long-term development plans for the host city and region. Good governance is conclusively the key to the success of Olympic games through legal compliance, fair and transparent performance, and social integration; and both the South Korean government and people at large must come together to achieve this national objective.