How will the 2020 Tokyo Olympics have a positive impact on Tokyo's economy?

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 Name: Yuze Liu

Student number: 40308986


As a worldwide sports event, the Olympic Games' influence is not limited to the sports competition among countries. The national cohesion stimulated by hosting the Olympic Games can promote economic development. For example, The Tokyo Olympic Games in 1964 showed the revival of Japan to the world, kicked off the rapid economic growth, and became an important milestone in Japan's economic development. Whether in construction, transportation, or tourism, the construction of these infrastructures still plays a vital role in Japan's social economy. I will introduce the expected economic impact of the Olympic Games on Japan in two aspects. The first is the expected economic impact of tourism. The second is the expected economic impact of construction investment.

Tokyo 2020 unveiled updated V4 (version four) budgets for the Olympic and Paralympic Games Tokyo 2020 with the Tokyo Metropolitan Government and the Government of Japan.  Including donations, sponsors, and IOC tickets, these are expected to provide Tokyo with 630 billion yen in 2020 (4.5 billion pounds / 5.9 billion US dollars / 5.3 billion euros). It is estimated that after the Olympics, Tokyo will reuse Olympic-related cultural activities, barrier-free facilities, facilities, and the Olympic Village. It is expected to have a driving effect for 13-30 years and will create an economic impact of 271.017 billion yen (1.73 trillion yuan ). At the same time, it can create 1.94 million job opportunities for Japan.


Sources：2020 – The Tokyo Organising Committee of the Olympic and Paralympic Games  https://tokyo2020.org/en/games/budgets/


Tourism


First of all, we analyze in two ways: first, the increase in the number of foreign tourists, and second, the increase in each foreign tourist's expenditure. These two ways are the main growth drivers of Japanese tourism, which can have a lasting influence. Japan has taken many measures to improve the experience of foreign tourists. For example, the Tokyo Metropolitan Government decided to waive the accommodation tax during the Tokyo Olympic and Paralympic Games from July 1 to September 30, 2020. The Tokyo Metropolitan Government plans to equip the Olympic Village with at least 100 buses powered by hydrogen fuel cells, build a "robot village," and introduce "instant language translation" to attract more tourists to Japan. By promoting relevant measures, the number of foreign tourists in Japan may exceed 20 million by 2020 and even 30 million by 2030. At the same time, visitors to Japan can create an added value of 3 trillion yen.


Source: Savills Japan Beyond Tokyo 2020: Prospects for the Japanese real estate market

Source: Savills Japan Beyond Tokyo 2020: Prospects for the Japanese real estate market


Construction


In 2013, Tokyo was selected as the city to host the 2020 Olympic Games. Its construction volume surged, such as the Olympic Village, the renovation of competition venues, the expansion of hotels and shopping malls, etc. History has verified time and time again that the housing price of the host cities and countries of previous Olympic Games has increased to a great extent. For example, the 2008 Beijing Olympic Games gained 960 billion RMB in economic benefits, and the British government announced that the 2012 London Olympic Games brought 9.9 billion pounds in economic benefits. By 2020, Tokyo and significant Japanese cities' real estate market is expected to be very optimistic.


Source: Savills Japan Beyond Tokyo 2020: Prospects for the Japanese real estate market

Conclusion


From my point of view, In the long run, the Olympic Games will play a positive role in diversifying Japan's economic structure, promoting domestic demand to drive consumption, and maintaining sustainable economic growth. Japan should take advantage of the Olympic Games' opportunity to give full play to the Olympic Games' positive role in economic development to revitalize Japan's economy.

Additional references

Toshihide Yorozu & Ayana Shibasaki & Mitsuhiro Osada & Masato Higashi, 2017. "Real Exports and Real Imports: Methodology and Tips for Analysis," Bank of Japan Research Papers 17-04-20, Bank of Japan





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