Winter Olympic in Austria - Essay Example

Introduction

The Olympics is an international sports competition held once in every four years in different states where athletes from different nations gather to showcase their skills. Not only do people compete, but millions turn in to show support for their countrymen and women. Olympics is classified into two; Summer Olympics and the Winter Olympics. This paper focuses on PESTEL analysis as to why Austria should host the Winter Olympics as compared to Sweden. Hosting an Olympic event has a significant effect on the hosting nation and in particular the cities to be used.

Political

The political system in Austria differs from that in Sweden, in that Austria is a federal state while a constitution monarchy runs Sweden. The government of Sweden is engraved in traditions and customs making it a challenge to welcome changes in the way the nation is governed. Due to the systems in place the changes or improvements to be made take time and are slower to effect hence making It a barrier for Sweden to alter its policy and regulations so as to accommodate a massive event as the Winter Olympics. However, Austria’s federal government is united in its decision-making process making it easy for the Austrian Olympic Committee to present its bid to host the Winter Olympics knowing it has adequate political support to host the event. Whereas in the case of Sweden, it is subdivided into county councils in which bulk of its administration is at the local level. Due to this system of administration, several of Sweden’s bids were declared non-finished which the Swedish Olympic Committee claimed to be due to inadequate support from the Swedish government. As cited by Yttergren and Bolling (2012), Swedes struggle with bureaucratic elements which prove to be a challenge when making a decision.

Economic

When hosting the Winter Olympics, the hosting nations need to consider the economic benefits they will realize from the event. These factors greatly influence decision making on how to go about their operations in boosting the economy. Austria is a landlocked country, and when compared to Sweden, it is a small nation in size. As highlighted by the Swedish Trade and Invest Council (2015), Sweden is the epicenter of the Nordic region. This means that it is one of the largest market and business hubs in the area hence making it more economically developed than Austria.

Sweden seems to have the upper hand in hosting the event. Hosting an Olympic event comes with expenses which if not well regulated may be a burden to the economy. The citizens need to be convinced that apart from raising taxes to cover the cost of preparation for the renovation of the infrastructure, the Olympic event will be of great benefit to them and the economy as a whole. The application fee is a bit high and estimated to have been $150,000 as of 2012 (Scholastic, n.d), and the cost can reach cock billions of shillings for hosting the whole event (Clarey, 2014). This is meant to keep away nations that are not able to commit to these efforts. For a country like Sweden to submit its proposal means it is willing to host the event, but willing to host the Winter Olympic and actually hosting the event are two different scenarios. Sweden has on several occasions withdrawn its bid citing concerns of incurring losses if it hosts the event. On the other hand, Austria has hosted the Winter Olympics twice and is well aware of the costs and benefits associated with the event and is still bidding to host another event in which Sweden remains unsure on whether to host or not.

Hosting the Winter Olympics event is a costly affair and can only make sense to developing economies that eye specifics boosts associated with Olympic events. This includes the actual costs of the slated games- operational expenses and the facelift given to the existing facilities- that will be obtained from the transactions but the incurred expense realized from upgrading the infrastructure will not.

It can, therefore, be argued that bidding can be done if a state also needs new transportation network and improved sporting facilities but not to bid if it only needs general infrastructure. For Sweden, it can be noted that it is after the short term goals and despite the associated costs of preparation and the concerns raised by nations in hosting the event, Austria still has the determination to hosting the Olympics again. This determination is not for the short term goals but the long-term goals; it looks an opportunity to position itself on the map, advertising its services and what it can offer to the world thus using the event as an opportunity to increase its networks and at the same time securing its future. If a nation contemplates investing, it should not do so in Olympic events but on other platforms like the oil sector.

Social

Austria being a landlocked is not accessible or known to many, unlike Sweden, which has a port hence can act as a transit point for cargo and cruise ships which carry tourists and business people. Though the social impact of hosting these events may not be comparable to the economic implications, but it can give the inhabitants of Austria an identity; an opportunity for them to be recognized and associate with the most influential cities in the world. It can bring about the pride and the prestige associated with hosting the Winter Olympic event. To Austria, this event instills the great feeling of being host nation which results in a positive thinking of Austria in the eyes of the visitors and participants from other countries.

Labor supply developments are known to be of significance role in determining the patterns of employment and unemployment. Labor supply policy in Austria is of vital importance and a strong reaction in labor force towards employment is among the characteristics of Austria’s job market (Ingrid et al., 2015). Hosting Winter Olympics will be a sure way to increase job opportunities as an obligation of the Austrian government. People will get jobs in readiness to host the event which will also involve the provision of shelters for the homeless in a bid to exercise caution and guarantee security for the visitors. Hosting these even will also improve Austria’s urban development in various ways that will lead to societal development in Austria and improvement of the social life of its inhabitants.

Technology

Technology is an important aspect of the organization and running of Winter Olympics. Countries invest in technology to keep them abreast with other nation. Both Sweden and Austria have invested heavily in research and education aimed at developing their technology. According to the information presented by FindTheData, (n.d), in Austria children go to school at a younger age when compared to those in Sweden, which is a significant step to achieving literacy. Both nations place emphasis on educating and training its citizens as well as creating a conducive environment for entrepreneurship. It is, therefore, impossible to gauge the technological advancement between these two nations since both are innovative and have made some significant breakthrough.

With the help of its legislative process, Austria has been able to adopt the emerging technological change and the automation of transactions in every sector of the economy. This can determine entry barriers to the internal and external market. Hosting the Winter Olympics can be a great opportunity for Austria to showcase the steps it has made in technology for instance lighting, stage design and the audio system which will act as new avenues for newly established ICT (Information Communication and Technology) institutions.

Environmental

When hosting an event of great magnitude like the Winter Olympic, the environmental factors have to be considered. As a requirement by the IOC (International Olympic Committee) that there be ice or snow which will act as the surface for the sports. Both Sweden and Austria meet this requirement, but when assessing the environment, one has to look beyond the climatic condition but also the outcome. Environmental protection is a matter of great concern to Austria. Due to the complexity of the responsibilities and activities of protecting the environment from all sorts of pollution and destruction, Austria distributes these responsibilities among various levels of authorities making it easy to realize its objective. This is a bit challenging for Sweden since the local government make a decision on their own capacity and therefore lack of a universal plan in dealing with environmental issues. The Austrian embassy in Washington refers to Austria as one of the European countries on the forefront in the area of environmental policy.

As the host city for the then 1964 and 1976 Winter games, Innsbruck is strategically positioned in the Austrian Alps thus making it an ideal choice for hosting another Winter Olympics event. The much famed Hahnenkamm mountain located in Kitzbuhel could be used as a downhill track thus being of much benefit to the alpine skiing through the provision of a natural skiing track. This is backed up with an already established ski resort which is positioned a short distance outside Innsbruck. Also, Austria already has ski jump hills in places and Nordic events like the biathlon that will only need some retouch and slight polish as compared to constructing a new track which will be expensive. This is not the case for Sweden which has before hosted Summer Olympics, meaning it has to put in tremendous effort into the preparation of its Winter games venue which would also be costly. Austria’s strategy compliments IOC’s directive that countries wishing to host these events need to at least have the necessary sporting structures in place to avoid environmental degradation (Paramaguru, 2014). This is so as to prevent the scenario as that seen in Sochi 2014 Winter Olympics, where protected lands were invaded so that sporting sites and housing facilities could be constructed (Paramaguru, 2014).

Legal

Austria transformed itself over the years and struggled to free itself from the German rule and declared its neutrality in 1955 after ratifying its treaty. This earned it a full sovereignty. Declaring its neutrality strategically placed Austria as the bridge between the East and the West. Austria became the center for international organizations like the UN and joined the EU in 1995 (Austria, n.d). This event saw Austria changing its law making it systematic and market oriented. The current law adopted by Austria is different from that of the Nordic nation in which Sweden is among them. Their law is primarily based on legislation processes. Not only does hosting the Winter Olympics attracts athletes and spectators but also investors who want to assess the business environment in the hosting state. As long term goals, Austria aims to boost its economy by utilizing the opportunities presented by hosting the Winter games. To attract investors, the Austrian government through its legislation process has enacted laws that make it possible for foreign investors to invest in their country. These policies are put in place to woo investors.

Conclusion

Basing on the elements of the PESTEL analysis, the paper has highlighted far-reaching opportunities for Austria and the aspects that need to be taken into account for successful preparation and hosting of the Winter Olympics. It can be noted that it is expensive to host an Olympics event, but nations present their bids for various reasons. For Austria it can be for pride, being in the spotlight for the two-week duration or the opportunity brought about by the event (employment opportunity and tourism). Closer analysis portrays the complex strategies needed in preparation for hosting a sporting event.