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.

In the manufacturing space, it is not just the sports goods industry that benefits from large events. Just the banners and advertising material will add up to millions. In addition, sportswear, shoes and accessories offer good potential, not merely for the events, but also for millions of fans all over the world that are enthused by them. Manufacturing also gains from the offshoot of transport, maintenance and volunteer services expansion. SMEs in India have proved that they match global standards of quality and safety in producing these goods.

Spectator spending has vastly increased over the past few years. There are stories of fans following F-1 racing teams, football teams, and cricket teams to sporting events around the world, adding an element of sports tourism to the local economy. Merchandising of souvenirs for tourists such as flags, mugs and other knick-knacks can generate enough manufacturing to keep several factories busy. Food outlets and catering services need to develop adequate hygiene standards for producing and packaging of special items.

Finally, infrastructure development for the mega-events represents large opportunities for SME vendors, suppliers and contractors. New stadia are built, existing ones are upgraded and modernised, new roads and bridges are constructed, and games villages created.

All these need to be equipped and furnished, with large purchases of furniture, linen and carpets and interior decoration services. Peripheral areas are also beautified and reconstructed, often with new investments in mass transport systems, power, hotels and other infrastructure. SMEs need to be active in exploring emerging business ventures, and in participating in them.

A dedicated portal for SME participation in large events needs to be struct-ured, a one-stop centre that can provide information on upcoming opportunities and link up large and small companies across diverse sectors. For example, the tenders coming up for the DCG 2010 are going to become more frequent as the preparation pace picks up. These should be made available to small business associations as well, in order that timely information can be supplied to members.

Additionally, institutions such as the Sports Goods Export Promotion Council should be revamped for greater focus on the sector, which is rapidly growing with greater TV coverage and health consciousness among consumers.

Sports goods clusters, currently prevalent in Jalandhar and Meerut from where close to 100% of exports originate, need to be established in other areas as well, synergised with input production. The current clusters have demonstrated that small manufacturers can effectively adapt to new technologies and innovate to address new markets and products.

There is need to generate greater awareness of the immense potential for SMEs in large sporting events. The Confederation of Indian Industry has been coordinating with organisations in Australia and UK to promote sports cooperation for businesses. CII has also entered into a Memorandum of Understanding with the Organising Committee of Commonwealth Games 2010.

The objective is to jointly take specific initiatives to promote sports in general and Commonwealth Games in particular. Such dedicated efforts will go a long way in boosting participation of SMEs in the sports industry.