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What Is the Relationship between Transportation and Economic Development?

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  • Written By: A. Garrett
  • Edited By: John Allen
  • Last Modified Date: 02 September 2016
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Transportation and economic development share a symbiotic relationship. An efficient transportation system facilitates regional development and economic growth. Conversely, rapid community development increases the demand for transportation services. When setting benchmarks and goals for the economy, policymakers must factor in the impact transportation and economic development have on the economic health of the area. Critical infrastructure also determines the sustainability of an area's standard of living.

Politicians and community leaders advocate transportation policies as a form of economic development because a proper infrastructure links people, businesses, and resources together in the most efficient manner possible. Decreasing the amount of time it takes an employee to get to work or for key factors of production to be transported and received increases productivity. Being able to access resources quickly and deliver goods or services faster due to improved infrastructure makes a business operate more efficiently and improves its ability to be competitive with companies outside of the region or country where it is based.

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Transportation and economic development impact the gross domestic product (GDP) of an area. GDP is the value of all goods and services produced within a region or country. Communities with companies capable of meeting their consumption demands quickly spend more of their income on products made by those companies. Consequently, those businesses are able to expand or increase the wages of their workers. Also, because those companies are able to access resources needed for production, the communities are able to use the transportation system to export goods to other areas and have to import less.

Communities are able to expand their physical boundaries due to improvements to the transportation system or infrastructure. Citizens do not feel compelled to live closer to their places of employment when a transportation system is in place that reduces trip time or transport costs. As a result, sparsely populated areas experience a population boom that brings economic development through increased property values and investments in stores or businesses that satisfy the needs or desires of new residents.

Transportation and economic development also improve the quality of life for citizens. Community expansion lowers the concentration of people in a specific area. As a result, pollution is reduced and the general well-being of the population as a whole is increased. This yields a healthy and productive workforce and allows the region to invest in continued economic growth rather than spend government funds addressing healthcare crises scarcity of resources due to high population levels.

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donasmrs
Post 3

A good transportation system also reduces cost of traveling. And with the extra income that people have, they can buy more, which helps the economy grow. It's just as the article author said. Transportation boosts economic development and economic development improves transportation.

stoneMason
Post 2

I don't think that transportation necessarily means than a country is developed or advanced. It's true that developed nations usually have extensive transportation systems that are also very affordable and high quality. But a good transportation system doesn't necessarily mean that the population are all well off or have access to all the resources they need.

I once heard a great quote about transportation that I really like: "A developed nation is a nation where the wealthy use public transportation." I think that says a lot and it's worth thinking about.

discographer
Post 1

I's really impossible for growth to take place without an efficient transportation system. As the transportation system grows and allows people to travel farther away, new residential areas develop and business increases.

I can give a very simple, small-scale example of this. Recently, the public transportation was expanded in our area to cover several extra neighborhoods. One of the neighborhoods is home to a new shopping mall. We couldn't go there before because the metro didn't go there. But ever since the metro expanded to near the mall, we have been going regularly and shopping.

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