Public Transportation’s Role in the Knowledge Economy

Posted by Content Coordinator on Monday, March 14th, 2016


Executive Summary

APTA - Public Transportation’s Role in the Knowledge EconomyCommunities are adopting fresh perspectives in order to succeed in the new economy. Increasingly, creating clusters of knowledge-focused businesses and institutions is the path for success in the 21st Century. These communities—which have the knowledge-sharing infrastructure of business incubators, accelerators, anchor institutions, and startups— are known as “innovation districts.” This study, which focused on the Silicon Beach Innovation District in Los Angeles County, CA; the Historic Technology District in northwest Austin, TX; and Research Triangle Park, one of the oldest research parks in the United States, located between Durham, Chapel Hill, and Raleigh, NC, finds that public transportation could be the determining factor in the success of innovation districts in the United States.

In the three innovation districts studied, local economic development officials and planners expect public transit, by 2045, to become the determining factor in:

  • over $177.83 billion of cumulative business sales through 2040;
  • $78.8 billion in wage income; and
  • $106.3 billion in gross domestic product (GDP) in the U.S. economy

Three main effects drive these economic gains. First, high-tech, high-value industries are attracted from other U.S. or international locations to clusters where public transit provides access to the needed workforce. Second, better access to workers enhances efficiency, and thereby generates net new economic activity. Third, certain transportation efficiency gains, quantified in an earlier APTA report (The Role of Transit in Support of High Growth Industry Clusters in the U.S)., lead to additional economic activity.

Public transportation is critical in connecting workers with employment opportunities in innovation districts. This analysis finds that if the public transportation services envisioned in the innovation districts’ long-range plans are realized, businesses would move to such districts and that their productivity would increase. The improvements envisioned in these long-range plans would provide access for more than 2.4 million workers (estimated by regional models) whom automobile congestion would otherwise exclude from a 45-minute commute to the clusters by 2045.

While Silicon Beach will see significant benefits from investing in public transportation, innovation districts in Raleigh-Durham and Austin that have more development potential – and may require public transportation for reasons other than those in Silicon Beach (i.e., scarcity of land for roadway right-of-way) – will also benefit. These additional cases illustrate the importance of public transportation in less urban, smaller innovation districts.

The study also demonstrates the importance of workforce preferences, retention and livability in sustaining innovation districts. In all three of the new innovation districts studied:

  • Workforce preferences alone were found to have the ability to drive the need for public transportation, whether roadway access is limited by land constraints (as in Silicon Beach) or land is plentiful (as in Research Triangle Park and Austin’s northwest district).
  • Public transportation solutions can largely, if not primarily, maintain the competitiveness of districts by accommodating the housing, lifestyle, and cultural preferences of younger “knowledge workers.”
  • The presence of public transportation in an innovation district contributes to the competitiveness of an entire region, even when transit is not required for access to a district.
  • A large subset of the young, knowledge-focused workforce is attracted to areas with high-quality public transportation services.

This growing demand for public transportation, and the responsiveness of the workforce to public transportation options (as demonstrated in a prior study), shows that deficiency or technical infeasibility of roadway options is not the only factor that can or should justify investment in public transportation to serve an innovation district.

While the previous study looked at the national picture, the current study includes an assessment of the potential savings to businesses and households at the regional level if communities fully implement the aggressive public transportation improvement strategies described in the cases. By reducing the out-of-pocket travel costs, travel time, and reliability challenges associated with auto dependence in congested networks, public transportation investments have the potential to provide significant savings to households and businesses. Those potential savings improve the chances that each of these regions will enjoy an increase in jobs, income, gross domestic product and business sales that may not have otherwise occurred.

Transportation savings from more efficient modes is only one aspect of regional competitiveness for any given city or region. The analysis shown here indicates that public transportation investments serving the districts and connecting them to larger, enhanced public transportation networks are likely to have benefits for any given city ranging from the hundreds of millions to the billions of dollars in the long term. Specific long-term productivity gains for cities in this case study include:

  • Los Angeles: $141.8 billion in additional business sales and $62 billion in additional wages due to implementation of the long-range transportation plan.
  • Austin, TX: $19.9 billion in additional business sales and $8.7 billion in additional wages due to implementation of the regional long-range plan.
  • Research Triangle Park, NC: Through enhanced access to the Research Triangle, an anticipated $12.4 billion in additional business sales and $5.4 billion in additional wages.

Communities of all sizes and in all regions can attract innovation districts if they have the right mix of elements. This research shows that public transportation investment is a crucial element in creating and sustaining such districts – and to growing local and regional economies.

Download full version (PDF): Public Transportation’s Role in the Knowledge Economy

About the American Public Transportation Association
To strengthen and improve public transportation, APTA serves and leads its diverse membership through advocacy, innovation and information sharing. APTA and its members and staff work to ensure that public transportation is available and accessible for all Americans in communities across the country.

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