The economics of the 2016 Rio Olympics
Posted 22 Aug 16 by Stefan Galbo
Whether you’re a sport enthusiast or not, we all took interest in tracking the Olympic medal tally. It was with no surprise which countries were the top performers: USA, UK, China, Russia and Germany.
But, apart from the medal tally, what took my interest during the 2016 Rio Olympics was ‘economic perspective’; how countries performed based on their population and gross domestic product converted to international dollars using purchasing power parity rates (GDP-PPP).
And the key observation was that ‘bigger does not always translate to better’. Small guys can perform well too when they have a competitive advantage. The top 15+1 countries by medal performance are set out below with their corresponding economic statistics.
To focus on the observation that ‘bigger does not always translate to better’, I looked at who wasn’t in the top 15+1 performers based on population and GDP-PPP. The standouts were India and Indonesia.
India -2nd for population and 3rd for –GDP-PPP– only managed 2 medals, a silver and a bronze, to finish 67th overall. Indonesia –3rd for population and 8th for GDP-PPP– only managed 3 medals, 1 gold and 2 silver, to finish 46th overall.
And, there were two small guys amongst the top 15+1 performers: Kenya & Jamaica.
Kenya, with a GDP-PPP of only $141.9m claimed 13 medals; 6 gold, 6 silver & 1 bronze. Jamaica, with a GDP-PPP of only $24.6m claimed 11 medals; 6 gold, 3 silver & 2 bronze. It is no surprise that the medals won by Kenya and Jamaica were all within the athletics discipline.
What we can learn from Kenya and Jamaica is that to be competitive, it is important to identify your niche and focus on establishing a competitive advantage. Whether it is a product or service niche, you too can be competitive in business.