Why transportation investment matters

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As cities, regions and countries fight for investment spend, transport infrastructure is the ‘x-factor’ in investor's decisions. Almost half of decision-makers said 21st century integrated transport infrastructure will make or break the economic prospects of a location.” – Professor Austin Smyth, head of the department of transport studies at Westminster University in London, England, from the recent report Smart connections: The essential role of transport for borderless business

I’m certainly preaching to the choir here when discussing the vital importance of transportation funding – not just in the U.S. but globally as well. Yet now there’s a study out that shows transportation investment is critical not just in the macro-economic scheme of things but down on the day-to-day business level, where the quality of transport infrastructure in a city or region is front of mind in four out of five business location decision-makers.

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Now, a point of full disclosure: this report,Smart connections: The essential role of transport for borderless business , written by Professor Austin Smyth, head of the department of transport studies at the Westminster University in London, received its funding from the Invest Thames Gateway, the lead international inward investment agency for the Thames Gateway region in England.

[If you don’t know, the Thames is the largest river in England, and the ‘Thames Gateway’ refers to the river’s tidal basin and estuary area to the east of London.]

Obviously, they’ve got a vested interest in securing more transportation funding – and this report plays nicely into that need. However, Professor Smyth is a solid academic: formerly professor of transport economics at the Transport Research Institute at Napier University in Edinburgh, Scotland from 2003 to 2006, during which he also held an appointment as director of the National Institute for Transport and Logistics (NITL) in Dublin, Ireland, Smyth came to Westminster University to promote an integrated portfolio of research, teaching and learning activities. So I think, anyways, his findings in this study are based on solid analysis of transportation issues.

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Smyth’s report found that the ability to deliver integrated transport systems – covering road, rail, air, and water ports – is what will distinguish the regional economic successes of the future, as that “integration” is critical to a city or region’s ability to provide fast, easy access to world markets, skilled workers and to bring businesses together quicker.

The study also polled a wide slice of business executives in the Greater London area and found that:

• 81% of senior business people rate transport as more important than ever for business on national, local and international levels;

• 63% said that transport was essential to attracting an increasingly mobile and demanding workforce;

• 52% of respondents cited the globalization of business as increasing the demand for efficient and integrated transport networks;

• 46% responded that virtual business is no substitute for real time face-to-face contact and that “holistic” transport systems are essential to bringing businesses together;

• Half of respondents cited committed government support to transport infrastructure as essential to their future investment decisions.

According to Smyth’s research, the essential benefits for business of being able to access integrated transport networks were cited as: access to potential customers (56%); access to labor pools (41%); ability to drive efficient operations (39%); providing a high quality of life for employees (28%).

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When considering the make-up of transport networks, respondents defined the ideal investment location of the future as having the following attributes:

• Access to integrated transport networks—that combination of road, rail, ports and air (62%)

• Proximity to international markets (34%)

• Access to international airports (31%)

• Proximity to a major city (31%)

• Access to sophisticated road and rail networks (29%)

• Commitment to sustainability (17%)

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I think it’s very interesting that the access to integrated transportation networks is the top concern among the business executives polled in this research, far outweighing access to any single mode (air transport) or even two modes (rail and roadways).

That shows, I think, that business is really looking at transportation from a multi-modal perspective – a perspective that doesn’t necessarily detract from trucking, mind you, especially if truckers lead the way in offering such combined modal services to businesses.

“Transport infrastructure represents the future for both business locations and business. Sophisticated and effective transport networks translate as accessibility and connectivity, making borderless business possible,” Smyth noted in his report. “In the future, access to integrated transport networks and proximity to international markets, will, undoubtedly, be among the most influential factors for investors.”

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