By Daniel Hunter
New research by UPS and the Centre for Economics and Business Research (Cebr) reveals that The London 2012 Olympic and Paralympic Games has given the UK a major reputation boost among multinational business leaders.
It predicts this boost could drive up to £21 billion in additional demand for British goods and services over the next 5 years.
The joint study identifies an ‘Olympics effect’ among senior executives at multinational corporations (MNCs) across the globe, who believe London 2012 provided an excellent showcase for UK business, leading to an increased trend to source British exports as a result.
The research also shows that UK exporters expect an increase in international sales as a result of London 2012, whilst surprisingly, more companies in northern England and Scotland expect to benefit from this halo effect than those in the host city of London.
“The legacy of the London 2012 Olympic and Paralympic Games will run much deeper than simply sport as we witness a positive impact on the overseas reputation of UK commerce and industry,” said Cindy Miller, managing director at UPS UK, Ireland & Nordics. “In a difficult global marketplace, a projected uplift in international sales would represent a welcome boost for UK exporters.”
The study is based on opinion research among senior business leaders at 500 MNCs across the globe and is supported by economic modelling and further opinion research among 962 UK exporters.
Window to the world: London 2012 drives UK export demand among multinationals
Four-fifths (80%) of multinational companies included in the survey currently buy goods and services from UK businesses. Three-quarters (70%) of these report that London 2012 has made them more inclined to source UK exports.
This rises to 90% of European multinationals, and 80% of Asian firms included in the study.
UPS and Cebr mapped this inclination against forecasted UK export demand by these companies to isolate an ‘Olympics effect’ — the increase in demand attributable to London 2012.
If MNCs currently trading with UK businesses follow through with these intentions, the study forecasts that London 2012 will drive an increase in UK exports worth £15 billion between 2013 and 2017.
In addition, 10% of MNCs included in the study do not currently source goods or services from the UK, but report they are now more inclined to do so. If UK exporters are able to capitalise on this interest, this would unlock a further £6 billion in export revenues.
The study also reveals that the timing of this Olympics-driven demand differs around the world. The ‘Olympics effect’ is strongest in 2013 in Europe and the Americas, whilst 2017 is when London 2012-driven demand is expected to peak in Asia.
Hearts and minds: London 2012 boosts UK’s export reputation
The UPS and Cebr research shows that London 2012 has had a clear positive impact on the international reputation of the UK as a place to do business.
More than four-fifths of international business leaders believe that London 2012 provided an excellent showcase for the UK’s contribution to the world (83%), and for its business capabilities (82%). Indeed, more than three-quarters (78%) admit that it has changed their perception of the UK as a place to do business.
Nearly three-quarters (72%) believe that London 2012 has improved the reputation of British businesses abroad, and has boosted Britain’s credibility as a supplier (72%).
Halo effect: More northern and Scottish businesses expect export uplift than London firms, post-Games
UK exporters are equally upbeat about the potential effect of London 2012 on their international sales. More than two thirds (68%) expect the Games to have a positive impact on export opportunities for their company in the long term.
By tracking this sentiment nationally, the research maps the anticipated halo effect of London 2012 on firms’ exports across mainland UK.
Around two-thirds of companies in London (65%) and southern England (68%) expect an increase in export opportunities as a result of London 2012.
Moving further away from London, this dips to just 38% of firms across the central band of the Midlands, East Anglia and Wales, but surprisingly jumps to 86% of companies in northern England and 78% of firms in Scotland.
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