Original publication: September 2015
Authors: SportsEconAustria: Anna Kleissner, Günther Grohall
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In 2012 the “Study on the Contribution of Sport to Economic Growth and Employment in the European Union” was carried based on the back-then 27 EU Member States focussing on sport as an economic activity. Due to data constraints, the base year for calculations was 2005. The methodology utilised a Multi-Regional Input-Output Table Sport (MRIOT-S) of the Member States based on the 27 national Input-Output Tables Sport (IOT-S). Most of these Input-Output Tables Sport are proxy tables and should therefore be used with caution. They were designed for EU-wide analysis and cannot replace Input-Output Tables Sport produced at national level. The chosen approach is consistent with the National Accounts on the one hand and intra-EU trade on the other.
A satellite account is an extension of the standard national account system. A Sport Satellite Account (SSA) – being the core of an Input-Output Table Sport – filters the National Accounts for sport-relevant activities to extract all sport-related figures while maintaining the structure of the National Accounts. The instrument of SSAs permits all sport-related economic activities to show up explicitly, rather than keeping them concealed, in deeply disaggregated (low-level) classifications of the National Accounts.
Sport’s share in total Gross Value Added
The Vilnius Definition of Sport – an economic definition of sport agreed by the EU Working Group on Sport and Economics in 2007 – distinguishes between a statistical, a narrow and a broad definition of sport as follows:
- Statistical Definition: comprised of NACE 92.6 Rev. 1.1 (“Sporting activities”, the only part of the sport sector having its own NACE category).
- Narrow Definition: all activities which are inputs to sport (i.e. all goods and services which are necessary for doing sport) plus the Statistical Definition.
- Broad Definition: all activities which require sport as an input (i.e. all goods and services which are related to a sport activity but without being necessary for doing sport) plus the Narrow Definition.
The results show that the share of sport-related Gross value added (GVA) of total EU Gross value added is 1.13% for the narrow definition and 1.76% for the broad definition of sport. The share of what is generally known as the organised sport sector (sport clubs, public sport venues, sport event organisers) is reflected in the statistical definition. The share of Gross value added according to the statistical definition is 0.28%. Therefore the real share of sport in terms of production and income is about six times as high as reported in official statistics.
In 2005, sport-related Gross value added (direct effects) amounted to 112.18 bn Euro according to the narrow definition and 173.86 bn Euro with respect to the broad definition. For the statistical definition of sport it was 28.16 bn Euro.
The direct effects of sport, combined with its multiplier (indirect and induced) effects, added up to 2.98% (294.36 bn Euro) of overall Gross value added in the EU.
The highest sport-related value added was found in the sector Recreational, cultural and sporting services, followed by Education services (second), and Hotel and restaurant services (third).
The average Gross value added of the statistical definition shows a broad division between high income Western European Member States and lower income Eastern states. In absolute terms, the Gross value added per capita in the Eastern Member States is around 5 Euro to 10 Euro per capita for this part of the sport industry, while in the higher income states, this amount is around 50 Euro to 100 Euro per capita. Of course it could be expected that richer countries spend more on sport than poorer countries, but this is true not only in an absolute sense but also in a relative sense: the share of Gross value added of sport is lower in low income EU Member States compared to high income states. On a cross-section basis, the national income elasticity of sports is 1.14, which means that if national income rises by 1%, the Gross value added related to sport rises by 1.14%. Both results indicate that the richer the country the higher the share of sport-relevant companies.
For the EU as a whole, the contribution of sport-related employment to total employment is 2.12%. In absolute terms this is equal to 4.46 m employees. This is above the sportrelated share in Gross value added (1.76%), which indicates that sport is labour-intensive.
The largest number of sport-related jobs can be found in Germany, which has 1.15 m sport-related jobs or nearly 27% of all sport-related jobs in the EU. The runner-up is the UK, with more than 610,000, followed by France with more than 410,000 jobs in sport.
Sectoral growth potentials
A general pattern of sport production can be observed in the sense that sport services are predominantly produced for the domestic market while sportswear is predominantly imported. For sports durables internal EU specialisation can be found.
There are three sectors that play a special role in almost all countries: food products and beverages; construction; and supporting and auxiliary transport services including travel agency services. These sectors have strong linkages to the rest of the economy and are therefore strategically important.
Strengths and Weaknesses
Germany has a high ranking in the goods as well as the services sector, with a slightly higher ranking in the goods sector. These high rankings in the goods sector result from, for example, the sports nutrition market and the manufacturing of sports suits. The UK, Ireland, Austria, and Poland have a high ranking in the services sector, but lower rankings in the goods sector (with the exception of the UK). Slovenia and Estonia are similar to Germany in the goods sector, but have a slightly lower ranking in the services sector. Both countries have high rankings for example in manufacturing of sporting equipment.
National Similarities and Differences
Although there are some similarities between the countries, there are also some striking differences. Austria, with its geographical location, is highly tourism oriented, which is especially the case for winter tourism. Cyprus focuses on particular services, like betting, radio, TV, trade and construction, and on education. German consumers show very high private sports-related consumption. In the Netherlands, the consumers focus on practicing sport, visiting sport events, betting on sport events and watching them on TV. Poland has strong services in the area of sport and recreation as well as strong areas like education, trade, transport, manufacturing and construction. In the UK the sport market increased strongly from 2004 to 2008, mainly caused by spending for the London Olympics of 2012, but it was negatively affected by the economic crisis.
Link to the full study: http://bit.ly/563.392
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