General Knowledge
Keeling, M.; Mooney, G.
IBM Institute for Business Value
Published in
Submitted by
Caroline Visser
Related theme(s)
Finances & Economics, Urban Mobility
USA and Canada (USC)
United States of America

Transportation and economic development: Why smarter transport is good for jobs and growth

Transport contributes directly to economic activity and employment through bus, rail, road, air and maritime services. It also has a large indirect impact via all the other sectors and activities in the economy that depend on and use these various modes of transport to move people and goods around, nationally and internationally, in an efficient and safe manner.

In the current economic environment, transport plays an even greater role in driving jobs and growth. Many cities’ transportation systems are facing rising demand driven by increased urbanization of populations. Even cities with declining populations face challenges since declining demand exacerbates existing revenue problems. Whether populations are increasing or declining creates a challenge for transportation providers in terms of maintaining an efficient and productive transport system in the face of population changes.

In addition, a challenging financial environment combined with languid economic growth are constraining the use of traditional fiscal instruments to support job creation, as well as creating affordability and funding issues for large infrastructure investments.

Yet, at a time when transport has never been more important in supporting growth and job creation, transportation systems in the United States and globally are facing significant challenges, such as those related to congestion, safety and the environment.


The good news is there are also technological and socioeconomic trends that offer new opportunities for transport providers. Transportation providers have more data and information at their disposal than ever before. They can use both this data and the latest technology to get closer to today’s connected citizens and provide better access to their transport network.

Transport services can become a differentiator for cities to attract and retain the talent necessary to drive growth, as they have a critical influence on the attractiveness and livability of a location. For cities and regions that can attract the right talent, the resulting wealth can be spread out across the economy.

The intelligent transport systems industry is helping build smarter transport systems that address these issues and opportunities. To sustain momentum, governments need to accelerate the development of common standards for ITS solutions and open data, the industry needs to collaborate across industry boundaries and cities need to continue building smarter transport networks.