South Korea must capitalize on Olympics opportunity


South Korea must capitalize on Olympics opportunity

The Winter Olympics, which started last Friday with a grand opening ceremony in Pyeongchang, has enjoyed a strong start. At a time of geopolitical turbulence in the peninsula, the games offer a remarkable opportunity for South Korea to present a positive image to the world, enabling a potential brand makeover for the country. 

A key goal of the organizers will be to present a vision to the world of a modern, vibrant, stable democracy that is a prime destination for future investment and tourism. And, with a potential audience of billions, the nation can capitalize on a first-class opportunity to showcase its credentials after a troubled time in 2017, which saw tensions with the North rise — sometimes dramatically.

While the nuclear stand-off on the peninsula remains, the Olympics have already brought about a highly unexpected geopolitical dividend. That is, at least temporarily, relations between North and South have improved and, remarkably, the two sides have even entered a joint ice hockey team.

Two major questions arise going forward. Firstly, can a country’s reputation be enhanced in the same way as a corporate (or other organization) might? And, secondly, can this have a positive, significant and sustainable national impact? On the first issue, competition for the attention of stakeholders such as investors and tourists is intensifying, and national reputation can therefore be a prized asset or a big liability, with a direct effect on future political, economic and social fortunes. Boosting your country’s reputation is therefore a common ambition of nations in what is an overcrowded global information marketplace, and a number of countries have successfully used the Olympics to positively showcase themselves to the world, including Spain after the Barcelona 1992 Olympics and Australia post-Sydney 2000.

Yet the simple fact is that many nations fail to fully capitalize, reputationally, politically, or economically, on hosting the Olympics or other major sporting events like the Commonwealth Games or soccer World Cup. One only has to recall the legacy images of abandoned and underused new-build Athens 2004 Olympic sports stadia, whose inflated cost contributed to Greece’s massive public sector debt, to appreciate that countries do not always get this right. 

Moreover, on the economic front, numerous studies have indicated that “legacy-driven” Olympic growth is often over-hyped. In 2012, for instance, Citigroup found that, in nine of the last 10 summer games, GDP tended to rise in host nations in the run-up to the event but then recede in the next two quarters.

To maximize the prospects of Korea benefiting, it must pursue a concerted reputational, political and economic strategy that aligns all key national stakeholders (across the public, private and third sectors) around a single, coherent vision for the country’s brand. This exercise should not just be the preserve of tourism agencies, let alone government, but must involve the private and third sectors too. 
After a difficult 2017, nation has the chance to use one of the world’s largest sporting events for a positive brand makeover that could produce a lasting political, reputational and economic legacy.
Andrew Hammond
A good example here is the initiative that helped transform global perceptions of New Zealand in the 1980s and 1990s. New Zealand was in the midst of a difficult economic climate during much of the 1970s and 1980s, partly caused by the country’s loss of preferred trading status with the United Kingdom and the Commonwealth, which were then amongst the nation’s major export markets.
In this context, the New Zealand initiative helped transform perceptions of the country by building a destination brand for outdoor sports and tourism, in part by leveraging the hosting of events like the 1987 Rugby World Cup and the 1990 Commonwealth Games. Here, the untapped potential of the country’s natural environment was recognized and indeed subsequently showcased in films like the blockbuster “Lord of the Rings” trilogy.  

And it is no coincidence that the New Zealand tourism sector has enjoyed a long boom. For instance, visitor numbers from the United Kingdom increased by about 60 percent between 2001 and 2006 alone.

Building on the growing international appreciation of the country’s unspoiled natural environment, and in the face of the loss of its preferred trading status with the United Kingdom and the Commonwealth, New Zealand recognized that a strong reputation for quality agriculture and produce would be hugely beneficial if it was to better compete in global markets. The subsequent success of the country’s agricultural sector, which has also become more competitive and efficient, is symbolized by the fact that it now accounts for around one-third of global dairy exports — which is more than double Saudi Arabia’s share of the world’s oil production.

The New Zealand example underlines how even a relatively simple, unified country brand vision can be powerful. To be sure, the country is not unique in having a beautiful, scenic environment, but it has managed to capture the world’s imagination with its consistent branding that has put outdoor pursuits and natural values firmly at its core, as epitomized, for instance, by the “100% Pure” slogan. 

This is a lesson that South Korea would do well to learn fast as it seeks to capitalize on the Olympics. In the midst of the hurly-burly of the next few weeks, the long-term opportunities of the event should not be sidelined. As with New Zealand, a key part of this work must connect Pyeongchang’s hosting of the Winter Olympics to a wider story that showcases South Korea’s strengths as a nation, so as to increase the favorability of international perceptions of the country; politically, economically and socially. 

Taken overall, the medium and long-term impact of previous Olympics has frequently been overstated for host nations. However, after a difficult 2017, South Korea now has a key opportunity to use one of the world’s largest sporting events for a positive brand makeover that could produce a lasting political, reputational and economic legacy.

Andrew Hammond is an Associate at LSE IDEAS at the London School of Economics

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