The 2010 games is big business

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Sports events have become big business in recent years. Mega events such as the Olympics and the Commonwealth Games generate huge opportunities in terms of requirements for infrastructure, services, manufacturing, human-skill development and related areas. For small and medium companies, the chance to leverage these business opportunities is a way to scale up and expand their horizons.

Sports are no longer limited to the people who take part in them. It is estimated that the sports industry in the US for example runs in excess of $200 billion annually, more than the auto or film industries. The London Olympics 2012 are expected to hand out 7,000 contracts, creating business down the supply chain for 75,000 enterprises. The Delhi Commonwealth Games (DCG) will require spending several thousand crores on sports infrastructure as well as upgradation of city facilities. Besides, tourism and hospitality industries get a big boost through these events.

SMEs have a special role to play as they are adaptable, flexible, and can fill in niche gaps in supply of goods and services. For example, the FIFA World Cup boosted orders for footballs in Jalandhar, raising the wages of 40,000 workers, mostly women, employed in small enterprises. Australia, which has recently hosted large events including the Sydney Olympics, has set up a special business club for participation of Australian companies in the Beijing Olympics. The London Olympics organisers are also actively courting businesses, especially SMEs, to participate in tenders.

There are several sectors where SMEs can play an important role. A major area will be that of skill development. The DCG 2010 will require thousands of volunteers, not just during the games, but also in their preparation. Providing them with the requisite communication, language and presentation skills will need the participation of many small enterprises. Secondly, tourism is expected to receive a big boost through the games, and an estimated 10,000 additional hotel rooms are required. The Delhi government has started bed-and-breakfast schemes as well. Training hospitality workers for these sectors must begin now to have a ready and willing cohort two years later.

Other services of note are event management, sports fitness and medicine centres, advertising, design and planning activities, management of sportspersons, catering and transport sectors are also expected to grow. While tenders will invariably go to large players, the spin-offs for outsourcing and vending by SMEs increase proportionately.