The commonwealth games: what are the economic benefits and impact?

Birmingham will host this year’s Commonwealth Games – and after two years of restrictions across the UK during the Coronavirus pandemic, the 2022 event will be welcomed with a bang.  

Between 28 July and 8 August, the city of Birmingham will come alive with at least 5,054 athletes from 72 Commonwealth nations.  

Beaten only by the Olympic Games in size, this large-scale international multi-sport event means the host city enjoys a global reputation.  

This year, host Birmingham will reap the rewards of huge economic stimulation and long-term economic and social benefits, even after the Commonwealth Games have finished.  

The 2022 Commonwealth Games will only be the third event England has hosted, and this year marks 92 years since the first Commonwealth Games were held in 1930. This is the first time the West Midlands has held the event, cementing itself at the heart of a continuing global legacy.  

Economic impact on Birmingham   

With a global audience of over 1.5 billion, the Commonwealth Games will promote the city and the people of Birmingham and the UK to citizens across the globe. 

The West Midlands is home to almost six million people, over 450,000 businesses, and has an economy of £126 billion.

In fact, per the Office of National Statistics, the West Midlands is England’s second largest metropolitan county in 2021, with a population of 2,936,000.  

And at the centre of the region is Birmingham – which has been a business hub for many years, and thanks to the Commonwealth Games, the city’s already successful business environment has been given the opportunity to grow – with more than 6,500 businesses signing up with the authority to work on new opportunities to ensure the city’s event is delivered successfully.  

But Birmingham’s businesses aren’t the only areas of the economy that will enjoy a positive impact, the job market also received a boost too.  

4,500 jobs were created annually until 2022 in preparation for the Commonwealth Games, supporting engineering and construction companies alongside the hotel and tourism, transport and sports sectors.  

But how much has it cost Birmingham to host the Games this year? The event was expected to have a total cost of around £778 million, with the council and other partners from the West Midlands providing around £184 million of this. 

And of course, the city’s appearance has received a little extra TLC ahead of the event too. Birmingham has undergone an estimated £1.2 billion economic uplift in preparation for hosting the Commonwealth Games, and the city also received an additional £500 million in a one-off construction benefit. And it goes without saying how much the infrastructure can leave a mark on locals and visitors alike. Take the Shard or Gherkin in London for example.  

But delving into this further, the current Gross Value added (GVA) by the Commonwealth Games in the West Midlands is approximately £126 billion, meaning the region will experience a 1.6 per cent increase to the GVA from hosting this year.  

Not only will the 2022 Commonwealth Games boost the city’s economic standing, and boost UK infrastructure and business, the Commonwealth Games have created an international platform for trade and tourism too.  

Birmingham currently accounts for 10 per cent of the UK’s international exports and the 2022 Commonwealth Games could create further global opportunities between the nation and key global markets, such as China, the USA, Europe, and the Middle East.  

The impact of global sporting events on economies  

International sporting events bring enormous economic benefits to host cities – and the proof is in the data.  

The last event was held on the Gold Coast of Australia, and according to the Commonwealth Games Federation’s report, the 2018 Games had a huge economic impact, with a boost of £1.2 billion.

Before this, Manchester’s Commonwealth Games in 2002 received a boost of £1.1 billion, followed by £1 billion for Melbourne in 2006 and £800 million for Glasgow in 2014.  

And it’s not just the economy that blooms, residents also enjoy the benefits, as all the new sports infrastructure drives the development of related industries and upgrading of the industrial structure.  

Take the Glasgow Games, for example, approximately 690,000 unique tourists attended the event or related festivals, meaning more footfall for local businesses.

Or even the 2010 Games in New Delhi, which created almost 2.47 million employment opportunities and brought an economic benefit of $4.94 billion to the city.   

According to data, the Commonwealth Games has generated between 13,600 and 23,000 full-time equivalent (FTE) years of employment before, during and after the competition.  

But volunteering also sees a boost too, with the Commonwealth Games Value Framework Report, which was conducted for the Commonwealth Games Federation (CGF), revealing that hosting the Games also improves community cohesion.  

For example, during Melbourne’s 2006 event, over 14,000 volunteers were involved in the planning and hosting of the Games, and 50 per cent indicated they wanted to continue volunteering.   

The report also revealed just how much of a boost the tourism industry of the host city receives - up to 25 per cent in the three years after hosting, as well as Commonwealth trade deals and investments of up to £400 million into the host city.  

And let’s not forget about the UK’s last iconic international sporting competition – the 2012 London Olympics. Not only did the overall economic benefits exceed £14 billion, former PM David Cameron also noted how the Olympics meant so much more than that to the country, bringing a continuous economic and sports legacy to the UK for years to come. 

Food for thought  

Birmingham 2022 is predicted to have more prominent benefits for regional economic growth, which will see productivity increase drastically across the nation.  

As the global event often acts as a driving force in national sports and fitness, pride in our sporting abilities is just one of many positives the Games will bring. 

However, it is not just the economic benefits that make hosting the Commonwealth Games a worthwhile endeavour, the 2022 event is a great opportunity to demonstrate Birmingham’s potential as a sporting and business hub to the rest of the world, showcasing the region’s rich industrial heritage and cultural diversity.