The socio-economic impact of Sochi 2014 partners` activities on the city hosting the games, the Krasnodar region, and the Russian Federation

Enterprises are an essential part of contemporary economy. They create demand and supply, participate in economic activity though they influence not only the economy but also ecological, political and social spheres.

Recently the Olympic Winter Games “Sochi 2014” have finished. It was a mega-scale project, due to which Sochi was undergone socio-cultural alterations. What role did enterprises play in these changes?

Russian company EXECT Business Training worked with the Olympic staff, including the volunteers, and this work has raised their qualification.

The Engtransstroy corporation as a contractor reconstructed the Sochi airport, built the port in the mouth of the Mzytma river, the road from the ski resort “Alpica-Service” to the finish area “Rosa Khutor”, the main Olympic mediacentre, organized electric power supply, laid the plumbing. The

Ingtransstroy corporation was established in 2007 and the goal of its activity was to develop the infrastructure of the Krasnodar region.

The firm “Mostovik” won the tender for building the first sliding track in Russia, constructed the railway station, built the “Bolsoy” Ice Dome, curling centre, the Bridge Resort hotel. In contrast with the Ingtransstroy corporation, the “Mostovik” company exists more than 20 years and does not concentrate only on the Krasnodar region. It realizes a great amount of projects throughout the whole Russia.

Foreign enterprises also made a lot to help the Olympic project succeed. For example, the activities of the French company Poma, which has a great experience in the ski industry, are not limited to Sochi. Poma also built cableway in Nizhny Novgorod and now is going to invest in building of three more cableways in Nizhny Novgorod by FIFA World Cup 2018. Furthermore, it has realized projects outside Russia in France, Norway, the USA, and former Yugoslavia promoting the development of these countries.

For instance, due to the Visa company, the Olympic Partner, Sochi has received card acceptance infrastructure. As a result, the number of retailers and service outlets that accept cards increased in 2,2 times from the beginning of 2012 to September 2012[4]. The non-cash payment infrastructure doubtlessly raises Sochi on a new level as Visa cards are accepted at millions of locations in more than 200 countries.

The Swedish company «EF» provided the Games with language services working with sportsmen, staff and volunteers. For the reason that knowledge of foreign languages is an advantage at job placement nowadays, obtained by young volunteers and other employees skills will be useful for them and the national labour market will receive qualitative labour resources. “EF” subsidiaries are located not only in different regions of our country but also abroad – from Berlin to Beijing, from Mexico to Dubai.

Due to all these enterprises during the process of preparation to the Games the city of Sochi has received a developed infrastructure which allows Sochi to become not only summer but all-season international resort.

So the economic and social impact of these enterprises is evident.

The gross regional product of the Krasnodar region has increased (chart 1). Now the Krasnodar region has the biggest gross regional product (GRP) per capita in the Southern Federal District of Russia.

The Olympic Partners` activity fostered the business activity in the region. The number of enterprises in Sochi has increased by 78,8% in the period 2005– 2010 (chart 2) in comparison with the average national growth of 101,2%[5].

A huge amount of jobs was created. In 2012 the average monthly salary in the city was 30,800 rubbles (in 2011, it was 26,600 rubbles) whereas it was 23,100 rubbles at the regional level[3]. In 2012 the unemployment rate in the city of Sochi was 0.2% while it was 0.8% at the regional level[4].

Chart rubbles)

1[3]. The Growth of the GRP. The Krasnodar Region. (million

2  800000

с о

Е

—•— GRP

2006    2007    2008    2009    2010    2011    2012

year

Chart 2[5]. Number of Enterprises in Sochi, thousand enterprises

The changes in Sochi have led to the growth of the birth rate (chart 3). Moreover, the birth rate in the Krasnodar region grew at a greater pace than in Russia as a whole. Since 2010, the birth rate in Sochi has been higher than the mortality rate.

The region`s investment attractiveness has grown. The National Rating Agency refers the Krasnodar region to the IC3 group of investment attractiveness – the third level of high investment attractiveness. The IC3 regions got 17% of total amount of foreign direct investment to Russia in 2012[2].

year

Chart 3[3].The Birth Rate per 1000 people in the Krasnodar Region

In 2011 the Krasnodar Region was listed as one of the top 15 Russian regions according to total direct foreign investment. The direct foreign investment showed the growth of 161,5% in 2012 in comparison with 2011. Besides, nearly 50% of total investment in the Krasnodar region goes to Sochi[5].

A lot was made to promote a healthy lifestyle, to make sport more accessible - new sport schools were built, gym equipment in parks and courtyards was installed. New medical institutions were built. Anti-smoking programs were held. Lots of people took part in volunteer movement. The first in Russia barrier-free world was created. A lot was made to change attitudes towards disabled people. As a result, the quality of life has improved.

To sum up, the impact of the enterprises on the economic and social spheres is invaluable. Due to them the Olympic Winter Games “Sochi 2014” have left a great Legacy. It would be impossible to prepare such a great sporting competition without the activity of these enterprises. The building companies stand out as they have created a developed infrastructure from scratch.

The quality of life in Sochi has grown, and the hosting city has been transformed into an all-season multifunctional resort with a developed infrastructure.

Sochi, a city for tourism, is waiting for guests, both from Russia and from abroad. It is not clear how intensive tourism in Sochi will evolve, especially after events in Ukraine. The foreigners` attitudes towards Russia may change not for better and political factor can play its role. As for visitors from Russia, their interest to Sochi has increased and Sochi is waiting for them all year round.

It is very important not to forget the practice used in Sochi and to spread it across the entire country. In this case, the enterprises taking part in the Olimpics would also foster the economic and social development of other cities, regions and the whole country.