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“Economic size matters in medal tally – but David can still beat Goliath,” say PwC economists
The South African Olympic team is predicted to win four medals at this year’s London Olympic Games, three more than in Beijing, according to a study released by Professional Services Firm PwC.
“It is positive to see that South Africa is still highly regarded in terms of estimated winnings of medals since the holding of the last Olympic Games in Beijing,” says James du Preez, PwC Head of Marketing & Communications and Business Development for South Africa. “Performances over the last year indicate that South Africa’s athletes are in good shape and are on track to bring home top awards.”
Dr Roelof Botha, Economic Adviser to PwC South Africa, says that South Africa’s forecast medal tally of 4 calculated by the economic model contained in the study is not far-fetched when considering the fact that the country’s athletes have qualified for a total of 73 Olympic events (including swimming). “A total of four medals would equate to a success rate of about 5%,” says Botha.
However, South Africa did not make the study’s estimated list of top 30 medal winners for this year’s Olympic Games to be held in London. The country was only ranked number 48, compared to ‘number 30’ in 2000 at the Athens Olympic Games, and ‘number 28’ at Beijing. In 2008, South Africa was estimated to bring home six medals at the Beijing Olympics, according to the PwC Olympics economics briefing. South Africa only scored one medal (silver) at the Beijing Olympics.
The survey suggests that emerging superpower India is an underperformer with an estimated target of around five to six medals. The most plausible explanation states the study is that, with the exception of hockey, Indian sport tends to focus on events that are not included in the Olympics, notably cricket. Du Preez says South Africans are similarly acclaimed worldwide for being exceptionally strong in sports such as rugby, cricket and football, which are also not usually included in the Olympic Games.
Kenya is the only African country ranked in the estimated list of top 30 medal winners (number 18) and is predicted to win 13 medals.
Although home advantage could once again play a part in how the Olympic medals are shared, the superpowers of the US, China and Russia are again set to battle it out at the top of the medals table, according to economists at PwC.
This is the fourth time that PwC has published an analysis of how medal performance at the Olympic Games can be linked to factors such as past Olympic performance, economics and state support for sport. The report updates these estimates to allow for actual results in Beijing 2008.
“In general, the number of medals won increases with the population and economic wealth of the country, but less than proportionately,” says the report’s author, PwC’s UK Chief Economist, John Hawksworth. “David can sometimes beat Goliath in the Olympic arena, although superpowers such as the US, China and Russia continue to dominate the top of the medals table.”
"The results become less reliable for countries with small medal totals where a few exceptional good or bad performances can change overall performance by a significant degree," says Du Preez.
The top 30 countries are predicted to lose a total of 31 medals to the rest of the competing nations, states the study.
The following economic and political factors were found to be statistically significant in explaining the number of medals won by each country at previous Olympic Games before allowing for past performance (which subsumes some of these factors as explained in the paper):
For the UK as host nation, the outlook according to the model is much brighter than in Beijing, while China may find it more difficult to stay ahead of the US (as it did in Beijing on gold medals, although not total medals won, states the report. The PwC model suggests that the UK team could win 54 medals this time around, beating an already exceptionally good performance of 47 medals in Beijing due to home advantage, which has proved significant in all other recent Olympic Games except Atlanta in 1996.
Russia is projected by the model to continue to perform strongly relative to the size of its economy in third place (68 medals), but it does continue to drift down the table relative to the heights of its performance in the old USSR era.
The model estimates that larger Western European countries such as Germany, France, Italy, Spain and the Netherlands might be expected to broadly match their Beijing 2008 performances – although they will no doubt hope to do better.
Countries where the model targets for London are below those for Beijing include Australia (still in gentle decline from the heights of Sydney in 2000) and some former Soviet bloc countries where the legacy advantages of strong state support from the pre-1991 era may be gradually fading, such as Ukraine and Belarus.
As well as the UK, countries that the model suggests have the potential not do better than in Beijing include: Japan, Romania and Turkey.
Du Preez says: “It will be interesting to see how actual performance in London compares to the benchmarks represented by the model estimates. PwC economists will revisit this question after the Olympic Games.”