Potential economic impact of Faro2027 Candidacy evaluated by the Faculty of Economics of the University of Algarve
What impact will Faro 2027 have on the local and regional economy?
What economic and financial effects will it have on sectors such as tourism and related sectors?
And the creative industries, to what extent will they benefit from Faro's application to be European Capital of Culture 2027?
Can Faro2027 contribute to stimulate private investment and promote the direct and indirect creation of new jobs?
To answer these and other questions, the Faculty of Economics of the University of the Algarve, in partnership with the consultancy firm Becorporate, carried out a pioneering study that sought to create a matrix that allows the development of the application process to be monitored, anticipating the impact that Faro 2027 could have on the local and regional economy.
No other studies are known to try to assess the economic and financial potential of a European Capital of Culture (ECOC) beforehand. The work was developed with the objective of gathering a set of data and recommendations to support the team that prepared the candidature in decisions related to investments and monitoring, through a system of economic evaluation, which covered the preparation phase of the candidature.
The impacts resulting from the ECOC are quite diverse, yet it was possible to conclude that an initiative of this nature can help to raise the tourism profile of the host city. This effect is cumulative and growing, starting to be felt immediately after the announcement of the application until the year of the initiative and expected to continue after the event.
There is evidence that this type of initiative has a considerable impact on the housing market, creative industries and commerce, as well as impacting on other areas such as education. On the other hand, it is clear that a ECOC can have a marked impact on (local and regional) infrastructure investment and is clearly a driver of greater momentum for private investment.
Overall, the results indicate that the carrying the title of a European Capital of Culture is an economically relevant event, with positive consequences on local and Regional GDP, on public accounts and on job creation (direct and indirect).
For each euro allocated in the Faro2027 investment expenses, it is estimated that the direct economic impact generated in Expenditure, GVA, Employment and VAT is, in the Creative, Artistic and Entertainment Services of 1.21€, in Accommodation Services of 1.285€, in the production of Restaurant and Similar Services of 1.45€.
One of the added values of this study is its potential as a working platform for possible future stages of the process. The work carried out will allow - in case of Faro being one of the pre-selected cities for the second phase of the selection process - to deepen the dynamics of the study. Even if the city is not chosen for the second phase, the document is also an important instrument for a future monitoring of the application of a set of projects embodied in the PEC Faro2030 - Strategic Plan for Culture of Faro.