What the Olympics really mean
On any project I like to put in the numbers; everything comes down to money. And now the shouting's over in Trafalgar Square, I'd like to see what the £3.8bn cost of the Olympics will really do for the UK economy. A few back-of-envelope calculations...
Two million people live within 5km of the Games' ground zero. Let's say 300,000 of them use public transport. Several new Tube stations and a lot of roadwork will knock some minutes off their journey. The average journey from Stratford into town is around an hour all in, so let's take a guess that it'll take those people six minutes less to get to work.
At minimum wage (a conservative way to crunch these numbers) that results in 51p per person per journey going into the economy instead of reading 'Metro'. And they do it twice each day. That's £306,000 a day. Five working days in a week, 48 working weeks in a year. So each year our smiling straphangers add £73,440,000 to Britain's GDP. Over the 25-year lifespan of the infrastructural improvements, that's over £1.8bn saved right there.
And that's just the start. Today, Stratford suffers from the Canary Wharf effect: it's a long way from town and hard to get to. But just as Canada Place is now buzzing even on Saturdays, a lot of businesses now have an incentive to start up in Stratford - the shiny new station's already there, and European services start in a few years. Let's say 2000 new businesses that wouldn't otherwise exist start up around the new 'city in the east' by 2015. At an average £350,000 turnover, that's adding £0.7bn a year - £17.5bn over our 25-year arbitrary amortisation.
Just two scribbles have added £19.4bn to the British economy - against a projected cost of £3.8bn (let's say this is amortised too, costing a total of £9bn with interest over the 25 years.) So our Games put £10.4bn into the UK economy with two partial guesstimates.
On balance, these games are going to be worthwhile. We just won't notice it.
Two million people live within 5km of the Games' ground zero. Let's say 300,000 of them use public transport. Several new Tube stations and a lot of roadwork will knock some minutes off their journey. The average journey from Stratford into town is around an hour all in, so let's take a guess that it'll take those people six minutes less to get to work.
At minimum wage (a conservative way to crunch these numbers) that results in 51p per person per journey going into the economy instead of reading 'Metro'. And they do it twice each day. That's £306,000 a day. Five working days in a week, 48 working weeks in a year. So each year our smiling straphangers add £73,440,000 to Britain's GDP. Over the 25-year lifespan of the infrastructural improvements, that's over £1.8bn saved right there.
And that's just the start. Today, Stratford suffers from the Canary Wharf effect: it's a long way from town and hard to get to. But just as Canada Place is now buzzing even on Saturdays, a lot of businesses now have an incentive to start up in Stratford - the shiny new station's already there, and European services start in a few years. Let's say 2000 new businesses that wouldn't otherwise exist start up around the new 'city in the east' by 2015. At an average £350,000 turnover, that's adding £0.7bn a year - £17.5bn over our 25-year arbitrary amortisation.
Just two scribbles have added £19.4bn to the British economy - against a projected cost of £3.8bn (let's say this is amortised too, costing a total of £9bn with interest over the 25 years.) So our Games put £10.4bn into the UK economy with two partial guesstimates.
On balance, these games are going to be worthwhile. We just won't notice it.
posted by chrisworth at 8:56 AM
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