Transportation and economic growth are closely linked, as businesses require good quality roads, railways, waterways, and air transportation to transport goods and expand into international markets. The supply chain from raw materials to factories and delivery of finished products depends on a national transportation network. International transportation projects have boosted economic growth by reducing transportation routes and speeding up delivery times.
Transportation and economic growth are closely linked, largely because businesses require good quality roads, bridges and tunnels to enable them to transport goods to their distribution points and customers. A good rail network also helps in transporting goods to customers and employees at work. A network of natural or man-made inland waterways can allow relatively inexpensive transportation of bulky goods and equipment, and can facilitate the transportation of agricultural products. International road, rail, sea and air transportation can foster international trade and enable domestic enterprises to expand into international markets.
Within a country, the supply chain from the raw material location to the factories can be made faster and more efficient if there are adequate road, rail and river connections available to transport materials. The delivery of finished products from the factory gate to distributors within different regions of the country depends on a national transportation network that can cope with the amount of goods being transported within the economy. For countries with a large land area and long distances between the place of production and the markets, this is particularly important. Examples of the link between transport and economic growth include the development of railway networks and canals during the industrial revolution in England.
The link between transportation and economic growth is evident in the area of international trade. Countries engaging in international trade require sophisticated transportation hubs capable of receiving and transferring goods received from abroad as well as helping domestic companies to export their goods. These transport hubs can be airports, seaports or inland inland ports connected to seaports or airports via road, rail or inland waterway links. Quick connections to the outside world can speed up delivery times to foreign destinations and reduce costs for exporters. The combination of international transport links and domestic transport can ensure that imports into a country are distributed quickly and at low cost.
Some international transportation projects have boosted the world’s economic growth by drastically reducing transportation routes or speeding up delivery times. The completion of the Suez Canal has reduced transportation times between Europe and Asia by avoiding the need to navigate around the Cape of Good Hope. Likewise, the Panama Canal enabled rapid travel between the Atlantic and Pacific oceans. Rail links such as the Trans-Siberian Railway have also aided national and world economic growth by opening up new markets and new sources of raw materials. The link between transportation and economic growth is also demonstrated by the first transcontinental railroad linking the east and west coasts of the United States, providing a growth boost that opened up new possibilities for trade and development.
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