Team GB cyclists Laura Trott and Jason Kenny have been aided by a massive investment by UK Sport in cycling.Bryn Lennon/Getty Images
The biggest winner so far at the Rio Olympics isn't Michael Phelps for his bucketful of swimming golds or even the U.S. Olympic team, squatting smugly (as usual) on a medal mountain. The big prize goes to Theresa May, the U.K. Prime Minister. While Team GB sweats in Rio, defying demographics by winning gold after gold, Ms. May is enjoying a blissfully quiet holiday in the Swiss Alps.
No political spin doctor would have dared to dream this up; even Mo Farah, the charismatic and much-loved long distance runner has been upstaged by the sweet romance between Britain's cycling champions Laura Trott and Jason Kenny, "the fastest couple on earth," each clutching five gold medals. The British press is wallowing in an orgy of sentiment and self-congratulation; Brexit is forgotten, except by its campaigners, who insist that this proves their point that Britain can "go it alone and win."
Of course, it proves no such thing. If anything, it proves that money pays for gold. Thanks to generous funding from the National Lottery, Team GB has benefited from a record £350-million ($589-million) war chest, an increase of 11 per cent since the runup to the London Games in 2012.
Canada, too, has learned this lesson with its Own the Podium strategy, which invested $139-million in preparing athletes for Rio and more than $90-million in the last Winter Games. Fear of a repeat of the Montreal and Calgary humiliations (when Canada failed to win a gold medal) provoked the government into a program that targets money at potential medal winners, and that is the interesting bit.
Own the Podium and its British equivalent, UK Sport, are in the business of investing in winners. It's not about making sporting opportunities available for everyone; it is about winner takes all. UK Sport is brutal in its process of selecting which sports will get the money and the criteria are based on projected outcomes, based on recent performance gains.
In order to understand the process, you should not see this as a typical government-sponsored program but more like a private equity firm: it's about how many medals you can generate with a patient four- to five-year investment. Consider cycling; only 10 years ago, Britain was nowhere in the sport, an also-ran in events like the Tour de France. However, UK Sport pumped over £30 million into the Olympic cycling effort this time round and it has paid off in spades. The dark comments from the French and Australian cycling teams, hinting at underhand tactics, more than miss the point. The British team had almost twice as much money than the Australians.
Of course, any successful business manager will tell you that money doesn't solve problems. It's what you do with it and how you manage the investment that counts. The money needs to be well spent and it is interesting that British Cycling has not lavished the huge public investment on the individual sportsmen and women, but on a backroom team of coaches, trainers and technicians, all focused on achieving micro-second gains in performance.
This is what it takes to win an Olympic medal – huge investments in a very specialized sport (gymnastics, the high jump or cycling in a velodrome). You might wonder, however, why it should command so much of taxpayers' money. Surely, the country would be better off (and a lot fitter) if we just built more swimming pools and ice rinks for kids.
The trouble is that politicians get more bang out of our bucks when they focus on the few weird folk who can win, rather than the great mass of us losers. A good medal haul at an international jamboree, such as the Olympics, delivers more political gains in the short term than a new municipal swimming pool.
And it is not just dubious politics. Mature economies, such as Canada and the U.K., need to find that elusive formula that can deliver growth, profits, higher wages. Some people think that government intervention is becoming fashionable once again. Perhaps we should target winners, say the interventionists: cosset and protect the growth industries of tomorrow, just as we lavish money on speed skating or judo.
It begs the question whether civil servants truly know how to do this. The track record of government investment is not good. A bit of Olympic grandstanding by politicians is tolerable every four years but over the long haul they should stick to better roads and drains.
Carl Mortished is a Canadian financial journalist based in London.