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European Commission

MEMO

Brussels, 21 January 2014

Sport keeps not only you, but also industry fit

Sport is not only a leisure activity and good for your personal health, but it has a big industrial impact. With its € 294bn contribution to EU gross value added and 4.5 million people employed, the sector is considered a significant driver of growth. The sport industry, in its broad definition, is a real industry, which can be seen as a growth engine for the wider economy as it generates value added and jobs across a range of sectors, in manufacturing as well as in services, stimulating development and innovation. To underpin the role of the sport-related economy as an economic driver to help European industry recover, Antonio Tajani, Vice President of the European Commission responsible for Industry and Entrepreneurship, and Androulla Vassiliou, the European Commissioner responsible for sport, will co-chaired today a meeting of stakeholders on the economic importance of sport industry. The meeting represents a platform bringing together representatives of all sport-related economic sectors, clusters, academia and sport associations.

Besides its enormous industrial impact tourism profits benefits from sport, as average, 12 to 15 million international trips are made worldwide each year for the main purpose of watching sport events.

The sport industry is also characterized by constant and rapid waves of innovation, often in close collaboration with other industries. As a result new innovative products are progressively spread in different markets and used for different purposes.

1. Gross value added and employment generated by sport activities

The Vilnius Definition of Sport includes all upstream industries producing goods and services needed for sport, and downstream industries for which sport is an important input – media, tourism, advertising, and so on. The following supply chain is based on this broad definition of sport:

Using the broad definition of sport, including the multiplier effects between the upstream/sport/downstream industries and other industries not part of this supply chain, the contribution of sport to EU gross value added is € 294 bn. The latter figure is close to 3 % of total EU gross value added.

More value added is generated in upstream industries (€ 137 bn) than in downstream industries (€ 108 bn). Practising sport generates less value added by comparison (€ 49 bn):

Direct employment in sport or in upstream or down­stream industries is 4.5 million people, representing 2.1 % of the EU workforce:

The total employment generated by sports activities is 7.3 million – equivalent to 3.5 % of total EU employment.

As this is higher than the 3 % contribution of sport to EU gross value added, sport-related businesses are more labour intensive than other businesses. As a consequence, growth in the wider sport-related economy generates more employment than growth in the economy as a whole. Moreover, every new job in the sport supply chain generates 0.65 new jobs in related industries outside the supply chain.

2. Retail and manufacturing are benefitting too

The retail market for sport articles is an important upstream activity. According to the 2012 study, retail sales of sport articles in the EU amounted to more than € 61 bn in 2005, ranging from less than € 20 per capita in Bulgaria, Poland and Romania, to more than € 300 per capita in Luxembourg.

The largest markets for sport articles are the UK, France, Italy, Germany and Spain.

These days, most sport articles are manufactured in Asia, but some of the design takes place in the EU and there are positive effects for suppliers in the EU.

The EU has an important role to play as enforcer of intellectual property rights: last year alone, customs officials in the EU seized counterfeit sport shoes worth more than € 36.5 million.

The manufacture of sport goods remains an important upstream activity, with major positive impact on the EU textile, clothing, leather, and footwear industries. In fact, the subsector of technical textiles has become an increasingly vital and dynamic part of the EU textile industry, accounting for an increasing share of production.

3. Stadiums and other sport facilities – a boon for construction

Sport generates more than € 3 bn value added in the construction sector (cf. Annex). Sport activities require significant investments in stadiums, arenas, buildings and infrastructure. Some of the investments go into new construction projects, others into reno­vation work or maintenance. The renovation of a number of football stadiums ahead of UEFA Euro 2016 in France will require investments of € 2 bn, while investments in building projects for the 2012 Olympic Games amounted to € 2.9 bn. Many of the facilities constructed for sport events can subsequently be used by the general public and for physical education, creating additional benefits which are difficult to quantify (healthier and more productive lives, longer life expectancies).

Sport events can also have an impact on the regeneration of urban areas.

4. Tourism: 12 to 15 million international trips every year

Sport tourism’ is a special form of tourism: to travel outside of one’s usual environment for passive or active involvement in competitive sport, where sport is the prime motivational reason for travelling and the touristic or leisure element may act to reinforce the overall experience. It is estimated that on average, 12 to 15 million international trips are made worldwide each year for the main purpose of watching sport events. The growth rate of this niche market in tourism is expected to be around 6 % per year for the next couple of years. In the EU, the main countries of origin of sport tourists are the UK, Germany, Italy, Spain, Denmark, Sweden and Finland. Moreover, an indirect effect of sport events is that major tourist destinations are developing products around pleasure sports to attract more tourists.

Sport events, and in particular competitions and tournaments, generate not only flows of visitors and income, but also interest in destinations.

5. Sport is a driver of innovation

The sport industry is characterised by constant and rapid waves of innovation, often in close collaboration with other industries (textiles, electronics, aerospace, etc.). Innovations flow in both directions: sport benefits from breakthroughs in other sectors, while at the same time giving rise to innovations that are subsequently taken up in other sectors.

Innovations can be categorised in three groups, depending on whether they target the competitive element, rule enforcement, or spectators. The most obvious driver of innovation in sport is the need to enable athletes to produce better results. Examples of such innovations include new materials (carbon nanotubes, nano­composites, shape memory alloys, self-healing polymers, technical textiles, etc.), new and improved sport products (shoes, clothes, skis, bikes, boats, rackets, poles, etc.) but also new sport nutrition and drinks.

A perhaps less obvious category of innovations concerns the need to ensure that rules are properly and fairly applied, not just during sport events (e.g. refereeing), but also in the run-up and following events (e.g. doping controls).

The third group of innovations is driven by the desire to improve the spectator experience, not only for those attending sport events but also for spectators enjoying the same events elsewhere (typically on TV). These two groups of spectators have some challenges and needs in common, such as the need for information and customisation. The two needs can often be satisfied simultaneously by new technological tools, giving each spectator a unique experience of an event: replays on command; views from different angles; historical and statistical information. Other needs, such as comfort, safety and security, are not shared by the two groups of spectators and need to be addressed separately. Innovations in ergonomics, wireless networks, microclimate environments, and closed-circuit security cameras have contributed to making the spectator experience safer, more comfortable and more secure.

These three groups of innovations have made sport technology a leader in several fields of applied science: textile technology, mechanics of human motion, new materials, sensors, actuators, human-oriented design, and others. More often than not, innovations in the sport industry spill over to other sectors, thereby benefiting the entire EU economy directly and indirectly.

Overview - The direct economic effect of sport activities

When looking only at the direct effect of sport on EU gross value added, using the broad definition, the amounts are smaller, reaching € 174 bn. Most of this value is generated in services sectors (€127 bn) representing 73 % of the value added.

The table hereafter shows the top five sectors in terms of value added. They are all services.

Service

Value added

Recreational, cultural and sporting services

€ 53bn

Education

€ 22bn

Hotels and restaurants

€ 17bn

Health and social work services

€ 9bn

Retail trade, except of motor vehicles and motorcycles; repair services

€ 8bn

Taken together, Construction (€ 3.2 bn) and manufacturing (€ 20.6 bn) account for around € 24 bn (15 %) of the total value added generated by sport, while tourism (hotels and restaurants) accounts for around € 21 bn (12 %).

In manufacturing, the sectors with the highest sport-related value added are:

Manufacturing sectors

Value added

Printed matter and recorded media

€ 3.4 bn

Manufacture of skis, bindings and poles; ice skates and roller skates; water-sport equipment; billiard tables; bowling alleys, etc.

€ 3.4 bn

Manufacture of sporting boats, canoes, gliders, sport airplanes, balloons

€ 2.9 bn

Wearing apparel and furs

€ 1.5 bn

Motor vehicles, trailers and semi-trailers

€ 1.4 bn

Leather and leather products

€ 1.3 bn

Machinery and equipment

€ 1.3 bn

Textiles

€ 1.2 bn

Fabricated metal products, except machinery and equipment

€ 1.2 bn

Chemicals, chemical products and man-made fibres

€ 1.1 bn

Rubber and plastic products

€ 0.9 bn

Food products and beverages

€ 0.6 bn

Medical, precision and optical instruments, watches and clocks

€ 0.4 bn

Based on the broad definition of sport and including only direct effects, most of the value added is generated in Germany, followed by UK, France, Italy and Austria.


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