My essential reads: the economic impacts of major events
Background
Researchers, policymakers and public bodies are interested in how major sporting or cultural events can contribute to the regeneration and economic development of a particular town or city. That’s why the economic impacts of events feature prominently in funding applications as much as in event evaluations, as our recent resource on UK-based Cities and Capitals of Culture explored.
Of course, while this is a common focus for much evaluation activity, looking only at an event’s economic impacts cannot provide the whole story.
Economic impact assessments pose many methodological challenges. For example, it is difficult to clearly show the link between an event and a particular impact as there are often broader socio-economic factors at play (for example, a global financial crisis or pandemic). Attributing causality becomes even more difficult across extended timeframes. Many cultural practitioners and researchers argue that the actual (long-term) economic impact of these programmes is secondary to the broader social and cultural impacts.
Despite the challenges they present, the pressure on the cultural sector to attract greater levels of public and private investment has led to economic impact assessments playing a significant role in articulating the value of major events to society.
The suggested resources listed below include those developed by organisations such as Spirit of 2012, the Institute of Public Policy Research, and the Creative Industries Policy and Evidence Centre. One of the resources is a series of articles from the academic journal Arts & the Market, which takes a more critical but balanced approach to evaluating particular City of Culture programmes.
Overall, these resources provide a valuable introduction for anyone interested in learning more about the economic impact of events and how practitioners and researchers might most effectively capture this. In addition, some of the key terms you might find in these resources are also explained in our economic impact glossary.
1. How Can Events Help Build Connected, Happy and Thriving Communities?
Finch, A., Iannetta, G., & Rutter, J. (2022), Final Report 4, A Spirit of 2012 Inquiry chaired by Sir Thomas Hughes-Hallett.
Spirit of 2012 was established to build on the pride and positivity that many people felt following the London 2012 Olympic and Paralympic Games. It aims to make sure that the UK can use major events to build sustainable social legacies.
The final report of the Spirit of 2012 Inquiry cites the lack of evidence for the economic benefits of major events. The report concludes that studies into the economic impact of events conducted prior to the events themselves are “often promotional in nature, over-estimating the tangible economic benefits and under-estimating the costs” while studies conducted after the event “often fail to pick up long-term impacts” (p.23).
Economic impacts are not just missed because of the methodological challenges of measurement and attribution over a longer-time frame; evaluations also fail to account for how events can have economic impacts “through their social value, including benefits for health, wellbeing and levels of physical activity” or for boosting “civic pride” and “levels of social connection” (p.23).
2. European Capitals of Culture: Success and Long-term Effects Study
Garcia, B., & Cox, T. (2013), Directorate General for Internal Policies, Policy Debt B: Structural and Cohesion Policies
This report, which features as one of our other essential reads on the role of culture in place-based development, documents the strongest claims of long-term cultural, social and economic impacts of the European Capital of Culture programme. It recommends the establishment of a standardised evaluation framework. In particular, it emphasises the importance of comparative research and a formal knowledge transfer programme “so that future hosts can better benefit from the wealth of experience developed in the last three decades“ (p.1).
3.Innovations in Economic Impact Assessment and Future Directions
Henry, N., Russell, G., & Patrycja Kaszynka (2022)
This paper, published as part of the Future Trends series from the UK City of Culture project, explores the background of economic impact assessment (EIA). It also considers recent developments in the methodology and provides more detail to the framework used to evaluate the economic impact of Coventry UK City of Culture 2021.
In particular, it advocates for “greater convergence“ between social value measurement and economic valuation, and for “greater discussion of the issue of additionality…fundamental to any evaluation or appraisal“.
4. The Economic Impact of Sporting, Cultural, Commemorative and Community Events
Nanda, S. (2022), A report by the Institute of Public Policy Research (IPPR) for the Spirit of 2012 Events Inquiry
This report considers some valuable academic and policy literature on economic impact. It then reviews seven economic impact assessment case studies, involving cultural and sporting events in the UK.
The review found that “the most common methods of economic impact assessment used fail to rigorously assess the true impact of an event on the local economy”, and called for “more sophisticated methodologies” for larger events “that make a greater effort to establish additionality and causality” (p.33).
5. Creating the golden thread: an ambition for major events in the UK
Neelands, J., Beer, H., Dixon, A., & Smith, E. (2024), Warwick Business School and Spirit of 2012
This report advocates for an “ecosystem approach”, which depends on the “collective work of multiple stakeholders at destination, regional and national levels across a dynamic ecosystem” to develop an “interconnected learning environment” for major events (p.11-17).
Among other recommendations, the report proposes the development of a national evaluation framework across five outcomes, of which economic value is one, “utilising standardised metrics and methods, and prioritising open data and knowledge exchange” as well as the establishment of a “major events data observatory” (p.26). The report also lists outcome indicators that major UK events commonly used in their economic impact evaluations (p.35 onwards).
6. The European Capital of Culture: A review of the academic evidence
Nimrod, O., Lee, N., & O’Brien, D. (2021), Creative Industries Policy and Evidence Centre, London School of Economics and University of Edinburgh.
This report reviews the body of evidence that now exists on the impact of the European Capital of Culture programme on local economies. It argues that while festivals have “significant merit as cultural events, there is little justification for claims of economic transformation“ according to the current evidence (p.3).
7. Evaluating Cities of Culture: Arts & the Market
Oancă, A., Bianchini, F., Simpson, J., Tommarchi, E. & Wright, D. (2014) Arts and the Market, Special Issue Part 1 2023, Part 2 2024.
The editorial article titled ‘The uses and misuses of the evaluation of cities and capitals of culture’ is publicly available, and provides a useful summary of the nine research articles included in the double issue of academic journal Arts & the Market. Key insights from the contributions include a “dissatisfaction with the linear/cyclical understanding of evaluation”, as well as the “overemphasis on the economic outputs of Cities of Culture events at the expense of other types of impacts” (p.10).
Articles exploring the “galvanising” impacts of the process of bidding for City of Culture designation complement others that highlight the complex narratives of failure and success, and in particular “the discrepancies between the apparently positive framing of evaluation and the more ambivalent realities on the ground” (p.10).
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