After two weeks of highly exciting competition, the games of the Rio Summer Olympics are now history. More than 10,500 world-class athletes basked in the Olympic glory of Brazil, and many of the 500,000 global visitors enjoyed a trip of a lifetime.
In the weeks ahead, many post mortem analyses will be written about Rio—just as they were for London in 2012, Sydney in 2000, or Atlanta in 1996. Any analysis of the Olympics always will include a summation of economic benefits derived by the host city; digging deeper, the examination will gauge the impact on business, especially small and diverse business enterprises.
For major sporting events such as the Olympics, economic benefits include infrastructure, transportation, and telecommunications investments, along with increased trade and taxation from a temporary surge of foreign visitors who book hotel rooms and patronize local shops and restaurants.
The International Olympic Committee, for instance, requires that the host city for Summer Games have a minimum of 40,000 hotel rooms available for spectators and an Olympic Village capable of housing 15,000 athletes and officials, according to “Going for the Gold: The Economics of the Olympics,” published in the Journal of Economic Perspectives last spring by economics professors Robert A. Baade and Victor A. Matheson.
In addition, many host-city residents benefit from the many jobs that are created leading up to and during the games. The 1996 Summer Games in Atlanta saw an increase in employment of 293,000 jobs, according to Baade and Matheson’s analysis.
As host nations ramp up to the Olympics, political officials and business advocates tout how all the economic benefits will be a boon to small businesses. In some nations that have a focus on promoting business and supply-chain diversity, such as the United States and United Kingdom, benefits extend to minority- and women-owned firms.
The organizers of the 2012 London Games, in fact, placed an emphasis on supplier diversity. Prior to the event, Britain’s Equality and Human Rights Commission explored procurement policies and practices in the London boroughs that were hosting events. They issued a Diversity and Inclusion Business Charter to state its goals of supplier diversity at the games and set up online tools with which diverse firms could register for contracting opportunities.
The commission also noted that some 96 percent of businesses in each of London’s five boroughs were small firms employing fewer than 50 workers, and that it was imperative for them to be offered procurement opportunities.
London’s Minority Supplier Development UK (MSDUK), a corporate advocacy group whose members include U.S.-based global companies such as Cisco, IBM, and Pfizer, pushed to have diverse businesses included in the London Olympics supply chain. MSDUK estimated that there were more than 75,000 opportunities for minority-owned businesses at the games.
Not every host nation will have a focus on supplier diversity because programs are not as entrenched as they are in the United States and United Kingdom. But in spreading around the Olympic largesse, formalizing the process seems to work best to ensure business diversity and inclusion.
The games had a “public duty to ensure that its procurement practices are fair and open to diverse suppliers, such as businesses owned by ethnic minorities, women and disabled people, since all public authorities are now required to build race, gender and disability equality into their procurement processes,” according to Britain’s Equality and Human Rights Commission.
In Atlanta for 1996, the organizers developed a formal minority and women business program for those games that launched four years before the start of the competition.
Another strategy to ensure diversity and inclusion seeks to show firms how they can leverage the excitement of the Olympics.
For Rio, the U.S. Small Business Administrations offered advice to small firms seeking to piggyback off Rio, noting that although not all small businesses are able to take advantage of a large event like the Olympics to push products, promotions, and services, nonetheless, there “are different ways to get creative depending on your industry.”
So whenever large-scale events like the Olympics come along, it makes sense for small and diverse firms to seek to play a part, whether in their own country or the host country.