Geoscience Reference
In-Depth Information
recently a globally distributed increasingly knowledge-intensive production
economy.
This transformation of the transport system in recent decades has been driven by
(1)
three
key transport
technical
innovations—
The Interstate Highway System,
Containers, and Jet aircraft—and by
(2)
Organizational Innovations—Deregula-
tion and Privatization—which greatly enhance the economic governance of trans-
port, physical flows and border controls
(Lakshmanan and Anderson
2002
). The
Interstate Highway system vastly enhanced interurban and intra urban mobility and
led to steep drops in regional and national passenger and freight times and costs.
Containers
,
first introduced in 1966 in the Megalopolis by U.S. shipping lines on the
North Atlantic routes, have greatly enhanced shipping efficiency and rapidly grown
and spread worldwide, facilitating intermodal transport of freight (Levinson
2006
).
The technical evolution of Jets and the aviation sector have led to sharp drops in
travel times, air freight prices, and to growing volumes of high value-added goods
being shipped by air domestically and globally. The institutional innovations in the
form of deregulation and privatization of transport have enabled a broad range of
transport service and process innovations and logistical improvements. The reform
of rules governing transport physical flows (e.g. vehicle size/wt. rules, reinvented
inspection processes) have not only enlarged transport capacities on routes and
terminals and logistical potential, but have stimulated new “service opportunities”,
1
which are critical
to the operation of a globalized economy (Lakshmanan
et al.
2009
).
18.2.2 Mechanisms Linking Transport Improvements and Economic
Evolution
As transport infrastructure and service improvements lower costs and increase
accessibility to various market actors—input suppliers, labor, and customers—
market expansion, increased integration and mutually sustaining economic growth
can ensue (Lakshmanan and Chatterjee
2005
). The underlying economic
mechanisms, which are illustrated in Fig.
18.1
, are:
1.
Gains from Trade:
As transport improvements expand markets for firms across
regions, there is a shift from local and regional autarky to increasing specialization
and trade, the consequent surge in productivity, and “Smithian” growth. Export
expansion will lead to higher levels of output and efficiencies, and increasing
imports put competitive pressures on local prices, removal of monopoly rents,
thereby improving efficiency. Firms are able over time to draw from a broader
labor pool, thus improving labor supply at lower costs. Similar effects in land and
other factor markets are likely as transport improvements open up new land for
1
For example, Precise scheduling (just-in-time systems) market expansion, and spatial agglomer-
ation of activities.
