The Economic Importance of Transportation

While in the previous decades, development policies and strategies tended to focus on physical capital, recent years has seen a better balance by including human capital issues. Irrespective of the relative importance of physical versus human capital, development cannot occur without both interacting as infrastructures cannot remain effective without proper operations and maintenance while economic activities cannot take place without an infrastructure base. The highly transactional and service oriented functions of many transport activities underline the complex relationship between its physical and human capital needs. For instance, effective logistics rely on infrastructures and managerial expertise.

The economic impact of transportation projects can be measured in the benefits they bring to economic growth, job creation, trade facilitation, and the economies of scale created. Recognizing this reality is crucial because today’s transportation needs far exceed available funding. Accordingly, transportation agencies at all levels of government seek to maximize their investments.

Efficient transportation reduces costs in many economic sectors, while inefficient transportation increases these costs. In addition, the impacts of transportation are not always intended and can have unforeseen or unintended consequences

There is an increased level of accountability in how transportation money is spent, so even with this money available, state, metropolitan, regional, and local agencies must justify the need, economic impact, and return on investment of their transportation investments. As such, it is important to assess transportation projects for their wider impact and use a sound economic analysis to make informed transportation decisions

The reality is that transportation plays a broad role in shaping economies. Transportation:

* Improve clusters;
* Increases productivity;
* Enhances jobs and labour market accessibility;
* Opens new markets for businesses; and
* Enhances supply chain efficiency
* Supports clustering

Supports clusters and agglomerations transportation investment in the congregate area has really contributed to the development of the area in several ways. The growth of a large metropolitan area can be slowed if it is based on an automobile trip because of the limited space in the business area. To overcome this challenge there must be effectively planned and more people should be allowed coming together in higher density development. Efficient transportation has reduced the time distances between where some of the labour force lives in the business area.

Also, right transportation investment support congregate of industries and businesses has given big support to their closer proximity to each other, creating a group of activities and improving productivity.

Increases productivity

As transportation in an area is improved; there will be an increase in the accessibility of people, products and businesses to reach jobs, services, good, and services. This is been achieve due to travel time is reduced and infrastructure enhancements. Because the labour market temporally is brought closer to their places of work due to improved travel time, businesses experience gains in worker productivity.

Also, Business productivity can be observed in other areas as well. For instance, transportation improvements may improve cargo delivery times. There will be an increase in efficiency If truck drivers can reach their destinations more quickly and with this, they can make more runs in their daily shifts. Increasing worker and business productivity can, in turn, increase the productivity of the metropolitan area affected by the enhanced transportation system.

For instances, Uber, taxify has contributed an increase in the productivity of the economy in the country and their mode of service has help people to be transported from their home to their business area.

Opens new market place for businesses

Opens a new market is a process in which the company locates a new multi-modal building to occupy which is accessible for the customer to locate due to the transportation network. Right, and improved transportation has done more than reducing the travel time or distance for commuters. Newmarket ideas have been a factor that has shift the business sectors attracted to the metropolitan area to a new level. For an instant, building a modern facility has opened new markets for the companies who are searching for locations with the appropriate transportation infrastructure for their corporate needs and manufacturing plants.

New rail, Brt and Metro lines attract new development — residential and commercial — providing businesses and passengers with more options to earn and spend their money. By improving access, enhanced transportation projects positively affect the economic impact of metropolitan areas.

Improve job and labour force accessibility

Another economic benefit of transportation improvements is the resulting larger streams of employees available for the job market. This has come from new fleet management (such as Uber, taxify and driversng) that makes it possible for the driver to reach inaccessible jobs. Road improvements will decrease drivers travel time in their car or bus. Overall, employers can better match employees with appropriate jobs based on job requirements and employees’ skill.

Moreover, improved transportation has increased the population’s direct access to more job options, making an area more attractive.

The economic impact of Transportation

Transport has contributed to economic development through job creation and its derived economic activities. Accordingly, a large number of direct (freighters, managers, shippers) and indirect (insurance, finance, packaging, handling, travel agencies, transit operators) employment are associated with transport. Producers and consumers make economic decisions on products, markets, costs, location, prices which are themselves based on transport services, their availability, costs, capacity, and reliability.

Investment in transportation has increased much more to the development of the economy than the travel time savings alone. It views it will be a better approach if we can begin by ensuring that the stakeholders lead the project evaluation. Through which this process involves conducting interviews with the transportation users, economic developers in the state, and calling real estate personnel to learn and understand their own perspectives and feedback on how an investment might change their behaviour and impact development decisions. This information will be used to determine travel demand, develop user costs and economic impact models.

Through various researches, it has yielded the development of tools designed specifically to help understand the extent of the transportation project’s impact on different levels such as site selection, business attraction, and retention and economic development. With the effort and combination of professionals, expert knowledge, stakeholder input, and research also lead to better benefit-cost, economic impact, and return-on-investment analyses.

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