Contribution of Sport in Economy Development

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Sport and physical activity can have very some important economic impacts, especially at a local or regional level. The ‘European Commission’s “White Paper on Sport’ is the EU’s fundamental document regarding the policy of the sport in the EU. According to this document, the sport is a dynamic and rapidly increasing sector of the economy, and its macroeconomic implication has not been sufficiently assessed.

According to the context of the EU’s Lisbon objectives, the sports sector can definitely encourage economic and employment growth, as well as local and regional development. It is believed that sports and tourism have a synergy which could stimulate the modernization of the infrastructure and the advancement of new partnerships for financing in the field of sports and recreation. For example, the share of sport-related employment for the United Kingdom is 1.46% for the narrow definition and 2.16% for the broad definition of sport. This is below the EU average for the narrow definition (1.49%) respectively above the EU average for the broad definition (2.12%). The share of what is generally known as the organized sports sector is reflected in the statistical definition. The employment rate according to the statistical definition is 0.61%. Sport-related employment (direct effects) amounts to 417,072 persons according to the narrow definition and 618,770 persons with respect to the broad definition. For the statistical definition, sport-related employment is 175,325.

Besides that, the proportion of sports economy as a part of the GDP has increased substantially. For example, France publishes a macroeconomic indicator called “gross domestic sports expenditure”. It constitutes of national household and resident expenditures for sports materials and services, which also comprises the national sports budget, local municipal sports budgets, sports sponsorship expenses and television broadcast fees set by sports event organizers. In the year 2005, gross domestic sports expenditure made up 1.77% of France GDP which was equivalent to 30.4 billion Euros (similar values of between 1% and 2% of GDP are found in all developed countries) (Andreff, 2008). At the year 2006, the study which was made during the Austrian Presidency of the EU established that the impact of sports on the economy of the EU in 2004 was determined at the amount of 407 billion Euros, which was equivalent to 3.7% of the EU GDP and that the sports sector employed 15 million people, which was equivalent to 5.4% of the EU’s employees.

In addition, the sport will also have contributed to the increase of the gross value added (GVA) for a country. According to the share of sport-related value added for the United Kingdom, the GVA is 1.52% for the narrow definition and 2.33% for the broad definition of sport. This is above the EU average which 1.13% narrow definition and 1.76% broad definition. The share of what is generally known as the organized sports sector which include sports clubs, public sports venues, and sports event organizers is reflected in the statistical definition. The share of value added according to the statistical definition is 0.71%. Sport-related value added (direct effects) amounts to 24.84 bn Euro according to the narrow definition and 37.99 bn Euro with respect to the broad definition. For the statistical definition of sport, it is 11.66 bn Euro.

Last but not least, the sport also will bring the effect to the sector-specific multipliers of a country. The multipliers can be described as the inter-connectedness of a sector with the rest of the economy. If the multiplier equals 1.0 the sector is not connected to any other sector. The higher the multiplier, the more the rest of the economy benefits from an expansion of the sector. The highest sport-related multiplier in the United Kingdom can be found in the sector Insurance and pension funding services, followed by Construction work. The sector Supporting and auxiliary transport services; travel agency is ranked third. Leather and leather products, wearing apparel; furs and education services have the lowest sport-related multipliers.

As a conclusion, the sports economy is a rapidly-growing and developing the sector of the economy. It is closely connected to more traditional sectors, comprising tourism and recreation. The value of sports should not be evaluated as merely a part of the GDP but should also include the benefit of sports as related to health care and government expenditure reduction not only in this particular budget position but also social one – the more active people are, the greater the health benefits they obtain. Global sporting events secure the greater portion and gains of the sports economy sector but their positive and negative influences have yet to be fully evaluated.

Cite this paper

Contribution of Sport in Economy Development. (2021, Jul 17). Retrieved from https://samploon.com/contribution-of-sport-in-economy-development/



How much does sport contribute to the economy?
The economic value of sport in the United States is estimated to be $73.5 billion. The industry employs over 500,000 people.
What is the contribution of sports?
The contribution of sports is twofold. First, sports provide a way for people to stay physically active, which is important for maintaining good health. Second, sports also provide a way for people to come together and compete in a healthy and fun way.
What is the relation between sport and economy?
The relation between sport and economy is one of cause and effect. Sport has the ability to create jobs and generate revenue for a country's economy.
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