Want to Win Olympic Medals? Fix Your Economy First

Steven Perlberg of Business Insider quotes a private research note by ConvergEx’s Nick Colas on the correlation between Olympic success and economic strength. “The Winter Olympics are a useful backdrop for case studies on the relationship between athletic performance and economic progress in emerging markets around the world,” writes Colas. “We’ve analyzed the medal count by country since the inaugural Winter Games in 1924, and indeed the results show that athletes rarely make it to the podium until their respective countries experience economic progress and stability.”  A few case studies from Colas’s note:

  • Japan’s Winter Olympic performance history tells a post-WWII recovery story.  The country competed in three Winter Games (1928, 1932 and 1936) before it won its first medal – silver – in 1956.  Japanese athletes didn’t earn any additional medals until the 1972 games, which the country hosted, and have been consistently making an appearance on the podium since 1980.  Japan won its first medal when it was taking off as an emerging economy and getting its economic act together following WWII.  Industrialism in the country picked up rapidly following the war, and the Olympic medal consistency coincided with the consumption boom in the 1980s. 

  • South Korea’s Winter Games story is similar to Japan’s, just two to three decades later.  However, it did take South Koreans a bit longer to arrive on the podium – the country competed in 10 Winter Games before winning four medals in 1992 (two gold, one silver and one bronze).  Since then, South Korea has performed consistently well, earning a peak of 14 medals at the 2010 Games in Vancouver.  Just as the country fully emerged from the shadow of the Korean War, its athletes were solid performers on the global stage.

  • China’s performance history is also emblematic of a developing economy gaining critical mass in sport and economic growth.  Like South Korea, China won its first Winter Olympic medals in 1992 (three silvers).  Chinese athletes had competed in three prior games dating back to 1980 before the emerged on the podium in Albertville, France.  Also similar to South Korea, China consistently earned medals in subsequent Games, recording a high of 11 at the 2010 Olympics.  China underwent a host of economic reform initiatives in the 1970s and 1980s; by the 1990s the country experienced rapid economic growth (10.4% GDP) even with skyrocketing inflation that topped 20% in 1994.  Again, consistent trips to the Winter Olympics podium went hand-in-hand with an emerging economy.

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  1. Srinidhi Kanuri says:

    I guess this contains some important lessons for India.

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  2. Andrew B says:

    What about countries such as the Soviet Union- does that disprove the theory?

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    • Voice of Reason says:

      Yeah, this theory is bogus. It’s partially right, but it’s not about how healthy the economy is, it’s about how wealthy the country is and/or the country’s ego. The Soviet Union and Hitler’s Germany had egos bigger than anybody could imagine, so despite a modest amount of wealth, they would put a lot of resources into developing athletes. In America and China now, we both have ridiculous amounts of wealth, and ridiculous egos, so we win most of the medals for the summer and winter. To put things in perspective, over half of the countries in the world have not won a medal in either games.

      Getting somebody on the podium requires youth leagues in population centers for that sport (or accessibility of the sport and coaches to children), parents who are able to support their child to work hard on something that isn’t tangible or productive, and a government that is willing to spend insane amounts of money on coaches, trainers, housing, stipends, equipment, and medical care for the Olympic hopefuls.

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  3. Pallos Levente says:

    In case of Korea the reasons are somewhere else. They are outstanding in short track skating, very good in speed skating and have a fantastic athlete in figure skating, but practically non-competitive in all other events.
    In fact, 37 of the 45 medals for Korea come from short track skating.

    The major factor that influenced their total medal tally is that short track skating was added to the program in …. 1992. Quite a coincidence that the study marked that year when Korean medals started to pour in. While no question the athletes are doing their best, had sport diplomacy decided that they did not include this sport into the olympics, South Korea would be an also ran among participating countries regardless of the development of their economy.

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  4. Dave Giles says:

    You might also be interested in this recent, related, post: http://davegiles.blogspot.ca/2014/02/modelling-olympic-medal-wins.html

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