The Olympic Games as industrial policy

Why I (still) think Cape Town should host the Olympic Games

The camera begins high above the Atlantic, a drone sweeping inland as dusk settles over the Cape. From a distance, the mountain is a dark silhouette against the city; then, a pulse of light appears on its summit. As the lens draws closer, the scene sharpens into what looks like an ancient gathering, a circle of people around a great fire, the echo of hunter-gatherers once assembled on Hoerikwagga, the mountain of the sea.

In the temporary amphitheater, three thousand guests seated in silence. The world-famous Stellenbosch University Choir, scattered through the crowd, begins a slow, resonant chant, voices rising with the wind. In the small arena, dancers move between drumbeats, their steps tracing the story of the games, from the playful contests of early humans to the global spectacle that now defines them. The torch is carried to the center, the flame catching and spreading, a ring of light visible from afar. Celebrities glance upward as the cameras pan across their faces. Around the world, billions watch in awe at this most intimate of ceremonies.

Then the focus shifts. A lone figure lights his torch and walks to the edge of the mountain, cameras following him. Then he jumps. The flame secured in a capsule at their chest, he glides through the thin air above the city, descending rapidly toward the Olympic terrace outside Cape Town Stadium where tens of thousands have gathered. As the wingsuit jumper lands, the flame is transferred to the Olympic cauldron. The crowd erupts; the city below answers with fireworks, ships’ horns, and the sound of vuvuzelas.

Welcome to the Games of the Thirty-Sixth Olympiad.

The Games have always been a stage for human ingenuity. Here I want to make the case that a Cape Town Olympics could extend that spirit beyond the stadiums, becoming the linchpin of a forward-looking industrial policy programme for the country. Rather than burdening public finances for a fleeting sports extravaganza, a carefully designed Cape Town Games could catalyse long-term private investment and spatial transformation.

Industrial policy has evolved from old notions of protectionism into a modern toolkit focused on enabling competitive sectors. South Africa can harness this approach by aligning the Olympics with strategies that boost export-oriented growth and structural change. Tourism, for example, is effectively an export industry: foreign visitors spend money locally, bringing in outside revenue. Hosting the Summer Games has been shown to significantly increase inbound tourism; my own work finds a sizeable 18.2% jump in international tourists for Olympic host countries. Importantly, such gains are largest for developing countries and can even begin before the event as global interest builds. In other words, simply winning the bid signals that South Africa is open for business, attracting investors and visitors in anticipation of the Games.

But tourism is only a small part of the story here. The key is to integrate the Olympic preparations into an overarching industrial policy framework. Well-designed industrial policies do not pick winners arbitrarily or pour money into vanity projects; instead, they focus on unleashing competitive forces by addressing market failures. One classic market failure is a coordination failure – situations where many complementary investments are needed at once for any of them to pay off. Big infrastructure projects often fall into this category: a new transport line, for instance, might not be profitable until there are businesses and housing along it, yet those developments won’t materialise without the transport. Here the state can intervene as a coordinator and catalyst. If the Olympics deadline is used to synchronise such investments – transport, housing, utilities, and commercial development happening together – the Games can act as a ‘big push’ that propels Cape Town’s economy to a higher equilibrium.

Crucially, the goal is to ‘crowd in’ private investment, not crowd it out. The state’s role is not about spending hard-earned taxpayer income. Rather, the state should provide strategic support in areas where it has leverage. One vital contribution is making land available. The government (national, provincial, or city) controls significant land holdings in and around Cape Town that could be freed up for development. For example, disused tracts or underutilised state-owned land can be designated for Olympic villages or temporary venues, then sold or leased to private developers under conditions that serve public goals (such as post-Games conversion to affordable housing or schools). Another lever is building enabling infrastructure, often through public-private partnerships (PPPs). Rather than the government fully funding all infrastructure, PPP models can share costs and expertise with private consortia. South Africa has precedent for this in the Gautrain project – the rapid rail link in Gauteng, built with the 2010 FIFA World Cup as deadline, was a PPP and became operationally successful. Since launching in 2010, the Gautrain has carried over 200 million passengers and spurred significant property development around its stations. A Cape version of this concept – call it ‘CapeTrain’ – is a compelling pillar of the Olympic vision. Western Cape politicians have already voiced enthusiasm for a Gautrain-like regional rail network; in 2023, Premier Alan Winde remarked that he ‘can’t wait for the day that we have a CapeTrain similar to Gautrain. We don’t want congestion. We want proper, reliable public transport’.

The CapeTrain proposal would establish a high-speed transit network radiating out from central Cape Town to surrounding towns and suburbs. Imagine multiple lines: one stretching northward up the West Coast corridor, one eastward through the Winelands (connecting Cape Town to Stellenbosch, Paarl and beyond), perhaps another southeast to link the Cape Flats and Southern Peninsula more directly to the city. Over the next decade, such a network of modern trains could fundamentally reshape the region’s spatial economy. Commuting times from outlying towns would shrink, knitting together labor markets and lifting property values. Just imagine how property values in Worcester would rise were a CapeTrain connection to reach Cape Town in less than forty minutes. The Olympics provides a firm deadline and global spotlight, which can concentrate minds and mobilise financing to finally deliver this long-promised vision.

Another area where the state can unlock private initiative is through a sweeping deregulation drive. Large projects in South Africa are often stalled by layers of zoning, environmental and procurement approvals that serve little public purpose. The Cape Town Olympics should break from that tradition. The city should become, for a decade or more, a single special economic zone, a place where construction, housing, transport and services operate under a unified, streamlined framework designed for speed and accountability. Redundant permits can be scrapped, zoning rules simplified, and project reviews consolidated into a single-window system. Firms that comply with safety and transparency standards should be free to build, invest and innovate without bureaucratic delay. The Games would then do more than accelerate infrastructure; they would demonstrate how a city freed from unnecessary regulation can grow faster, create jobs more easily and attract the kind of investment that rigid rules too often repel.

While the economic rationale is promising, it rests on discipline: spending must be contained, and the city must avoid the familiar trap of white-elephant projects. The rule should be clear: build only what will serve a purpose after the Games. The International Olympic Committee now rewards thrift and reuse, and Los Angeles 2028 has shown how to stage a world-class Olympics without building a single new stadium. Cape Town could go further. The city could become a laboratory for modular design and temporary architecture, with venues that are flexible, portable, and built for second lives. Take athletics, arguably the centerpiece of the Games. Cape Town lacks an Olympic-size track, but does it need one? Why not, as Malcolm Gladwell suggested on a recent Science of Sport podcast with Russ Tucker, deconstruct athletics into separate, purpose-made venues: pole vault on the Grand Parade, shot put in the Company’s Garden, long and triple jump on the Promenade? A compact 15 000-seat track facility on a university campus could host the main events and later become a training facility. Even the 100-metre finals could take place on Robben Island, with a few thousand spectators paying for the privilege of witnessing it live. Maybe that is taking it a step too far, though I’m sure even Usain Bolt might have slowed down to take in the view.

There is also a wider, more political economy benefit of hosting the Games that is easy to overlook. A successful Olympic bid would set South Africa a fixed policy horizon for at least the next decade. That kind of long-term timetable is rare in South Africa. It would act as a public commitment device: an externally monitored schedule that forces consistency in policy and delivery. Investors tend to respond less to speeches and more to credible, time-bound actions. In emerging markets, where political cycles are short and rules often change midstream, certainty is as valuable as capital itself. Large deviations from market-friendly, export-oriented policy, or from fiscal discipline, would immediately be interpreted as a risk to hosting. No politician would want that legacy. In practice, the Olympics would become a check on policy drift: a way to anchor expectations and narrow the distance between promise and execution.

To be clear: policy certainty is the most binding constraint on South Africa’s economic growth. In recent years, several studies have confirmed the pattern across emerging markets: when firms trust that governments will keep their word – on taxes, tariffs, or infrastructure contracts – they invest more, hire more, and innovate more. It is the same logic that drives innovation clusters in stable economies. The Olympics would hardwire that credibility. By locking in a clear, externally verified schedule, it would lower the ‘risk premium’ on investing in South Africa. Local and international firms that have waited on the sidelines for clearer signals would begin to move.

Back to the mountain. Three thousand guests sit beneath a fading Cape Town sky, each having paid $100 000 or more for the most intimate opening ceremony in Olympic history. In a world where the super-rich increasingly signal status not through material excess but through access to rare, authentic experiences, as The Economist recently noted, there will be no shortage of people eager to pay for this. That roughly R10 billion in ticket sales would go a long way to funding many temporary venues, including the amphitheatre that would host both the opening ceremony and the archery events before becoming a training and visitor centre for Table Mountain National Park. But the real point is not the ceremony or the spectacle. It is the model it represents: an Olympics that pays its own way and proves how a global festival can be turned into an instrument of economic transformation.

Every Olympic bid must answer not only what it will build and what it will leave behind, but how it will rethink the Games themselves. Cape Town’s 2004 proposal was, in hindsight, ahead of its time. It placed legacy, integration and the environment at the center long before these became the common language of Olympic planning. Now we have the opportunity to go further. In the coming weeks, the bid for the 2036 Summer Olympic Games will be presented to Cabinet for approval. I hope the GNU recognises the chance to use the Games as a commitment device for growth: a clear, externally verified deadline that locks in sensible, long-term policy. Bidding for the Olympics could become the moment South Africa chooses an industrial policy fit for the future, powered by private enterprise and guided by innovative, forward-looking leadership.

‘The Olympic Games as industrial policy’ was first published on Our Long Walk. The images were created with Midjourney v7.