The Economic Dimension Of Sport
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1 The Economic Dimension Of Sport Dr. Anna Kleissner SportsEconAustria 14/09/2015 Presentation for the Committee on Culture and Education 1
2 Structure of the Presentation 1. Economic Definition of Sport 2. National and Multiregional Input- Output Tables: Sport 3. Macroeconomic Effects of Sport 4. National Strength and Weaknesses 5. Growth Potentials 6. Similarities and Differences 14/09/2015 Presentation for the Committee on Culture and Education 2
3 1. Economic Definition of Sport The sport economy as a whole is part of various industries and economic sectors. National statistical offices measure sport by the category operation of sports facilities. This ignores other categories like: production of sport articles, sport retail, sport tourism. Vilnius Definition of Sport Relates sport activities to specific registered industries in the national accounts. 14/09/2015 Presentation for the Committee on Culture and Education 3
4 Sport Industries Upstream and Downstream Consumer Expenditure Goods and Services Conditional on Doing Sport Veterinarian Dietary Supplements Sport Bets Health Services Hotels, Restaurants (sport tourism) TV Broadcasts Doing Sport (According to the Statistical Definition) Professional Stadiums Swimming Pools sports Goods and Services Necessary to Do Sport Racing Horses Sport Shoes and Sport Clothes Weapons School Education Sport Cars, Motorbikes Fitness Centres TV, sport betting, sport tourism etc. need sport; however, sport does not need these businesses. Sport needs clothes, shoes, gear, education, clocks etc. Watches, Clocks Sailing Equipment Dancing Schools 14/09/2015 Presentation for the Committee on Culture and Education 4
5 1. Economic Definition of Sport Vilnius Definition of Sport: Statistical Definition: Includes NACE category 92.6 "Sporting Activities E.g. sport facilities such as stadiums, swimming pools, sports clubs and professional sport organizations. Narrow Definition: Enlarges the statistical definition of sport by all industries which produce goods that are necessary to perform sport. E.g. manufacturing of sport shoes and tennis rackets. Broad Definition: Includes also those industries for which sport is an important input for their production processes. E.g. television broadcasting or hotels accommodating guests doing sports 14/09/2015 Presentation for the Committee on Culture and Education 5
6 2. National and Multiregional Input- Output Tables: Sport National Input-Output Table (IOT): Displays which sectors receive (columns) and sell (rows) how many products. National Input-Output Table for Sport (IOT-S): Contains additional rows and columns for sport-related products. Multiregional Input-Output Table Sport (MRIOT-S): Combines several national IOT-S into one table by adding foreign trade in between the nations. 14/09/2015 Presentation for the Committee on Culture and Education 6
7 Dimensions of Tables National IOT(S): The 27 national IOTs serve as the basis for the 27 IOT-S Transform IOTs into IOT-S by splitting those sectors which contain sport-related data. MRIOT-S: The 27 national IOT-S are the basis for the MRIOT-S Harmonised they add up to a 27-regions and 94-sectors model. The centre of the table thus has 2,538 rows and columns. 14/09/2015 Presentation for the Committee on Culture and Education 7
8 Simple Input-Output Table 14/09/2015 Presentation for the Committee on Culture and Education 8
9 Input-Output Table for Sport 14/09/2015 Presentation for the Committee on Culture and Education 9
10 1 2 3 Sport Σ Gross Value Added Import Supply Good 2. National and Multiregional Input- Output Tables: Sport Good Sport Σ Sport Σ Gross Value Added Import Supply Good Final Demand Export Total Demand Good Sport Σ Sport Σ Gross Value Added Import Supply Good Final Total Demand Export Demand Good Sport Σ Final Demand Export Total Demand Region 1 Region 2 Region Sport Sport Sport Σ Gross Value Added Import Supply Good Good Good Region 1 Region 2 Region 3 Good Good Good Sport Sport Sport Final Demand Export Total Demand 14/09/2015 Presentation for the Committee on Culture and Education 10
11 3. Macroeconomic Effects of Sport Gross Value Added: Sport-related value added for EU: 1.76% (broad def.) For comparison: value added in statistical def. = 0.28% Gross value added in EU direct effects + multiplier effects = 2.98% Share of sport in European value added comparable to: Share of agriculture, forestry, and fishing combined, almost two and a half times as large as mining and quarrying at least more than one fifth of financial service activities (including insurance and pension funds). Every 60. generated and earned in the EU is sportrelated. 14/09/2015 Presentation for the Committee on Culture and Education 11
12 3. Macroeconomic Effects of Sport Gross Value Added: 1.76% (broad definition) of total EU Gross Value Added Top-5 value added sectors in the EU; broad definition, direct effects, in m 14/09/2015 Presentation for the Committee on Culture and Education 12
13 3. Macroeconomic Effects of Sport Employment: 2.12% (broad definition) of total EU employment. 1.48% (narrow definition) 0.31% (statistical definition) 14/09/2015 Presentation for the Committee on Culture and Education 13
14 3. Macroeconomic Effects of Sport Employment; broad def.; direct effects: 14/09/2015 Presentation for the Committee on Culture and Education 14
15 4. National Strength and Weaknesses Strength and Weakness Analysis is a situation assessment of internal factors. Provides insight into a country s resources and capabilities within its competitive environment. Low numbers mean a high ranking ranging from 1 to 27. Ranking according to country s share of sport-related production in the corresponding product markets. 14/09/2015 Presentation for the Committee on Culture and Education 15
16 4. National Strength and Weaknesses Given the economic strength of the states, one can say that: the UK, Ireland, Austria and Poland have a high ranking in the services sectors; Germany has a very strong position in both the goods and services sectors; Slovenia and Estonia compare to Germany in the goods sectors but have a slightly lower ranking in the services sectors. 14/09/2015 Presentation for the Committee on Culture and Education 16
17 5. Growth Potentials The most promising sectors for many Member States are: Sports nutrition, Sports insurance and Economic and legal consultancy for sport. 14/09/2015 Presentation for the Committee on Culture and Education 17
18 6. Similarities and Differences Similarities: The more GDP per capita can be found in a country, the higher the share of sport-related industry. Promising: sports nutrition, sports insurance, and economic and legal consultancy for sport. Services auxiliary to transport (e.g. travel agencies) and the construction sector show high multipliers. 14/09/2015 Presentation for the Committee on Culture and Education 18
19 6. Similarities and Differences Differences: Austria: Tourism industry dependent on sport tourism. Especially true for winter seasons. Cyprus: Focus on a services based industry. Betting, radio- and TV, sport events, trade and construction. Germany: High private consumption. Sport-economy is service focused, in contrast rest of economy. 14/09/2015 Presentation for the Committee on Culture and Education 19
20 6. Similarities and Differences Differences: Netherlands: Private consumption for practicing sports, visiting sport events, betting on sport events and interest for sport on TV and radio. Contribution of the non-commercial services industry: 24% to overall GDP; 60% to the sport-related GDP. Poland: Sport-related GDP mainly generated by: sport and recreation services, education, trade, transport services, manufacturing. Manufacture: metal industry, sport equipment, clothes. United Kingdom: Sport-related consumer spending affected by crisis. London Olympics pushed sport industry. 14/09/2015 Presentation for the Committee on Culture and Education 20
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