Existing Industries and Activities
Market conditions set the context for economic activity impacts. It is therefore important to consider the competitive conditions in each sector, and how these will be affected by the transport option. Where competition is imperfect, for example in industries in which there are few players and barriers to new competition, a transport option might promote greater competitiveness leading to more efficient production and/or better use of human and/or physical resources.
Such changes will generally enable an increase in output and employment: however, as noted by SACTRA (in Transport and the Economy), competitiveness impacts are a potential consequence where inter-regional links are improved. For example, businesses in a formerly remote region might benefit if the transport option reduces delivery costs into external markets; however the same option also opens up the markets in that region which were previously protected from external competition by transport costs. This illustrates why it is important to look at gross impacts, as this enables this so-called "two way street" effect to be considered.
Competitiveness impacts may also occur through factor markets, for example expanding the labour market catchment area and making it easier and quicker for companies to recruit personnel, or by expanding the supply of land suitable for industrial and commercial activities.
In addition to competitiveness based impacts, consideration should be given to other potential market failures.
Inward Investment
The ability to attract mobile or inward investment is frequently put forward as a reason for a transport option, generally in relation to land-use or access to rail, air or port facilities. It is not enough simply to assert that such investment will arise, however, and evidence needs to be obtained to show that there is demand from potential investors which cannot be met in some other way or in some other location. As with other economic actors, this will generally involve use of survey information.
In looking at this issue, information could be gathered from investors who did locate in the appropriate spatial area and with others who considered the area but chose to locate elsewhere. This should include information/opinion on why an area was selected/not selected; as far as possible, survey techniques should be used which elicit information on the relative importance of transport factors. In practice, it may be necessary to rely to a large degree on agencies involved in inward investment.
Population Change and Economic Performance
Gain or loss of working residents may be an important driver of local income performance, and the attraction of people with skills can help an area to attract new investment. The attraction of more people with jobs either in or outwith the in-scope area will also add to local spending power and the tax base, while loss of people will reduce income if not replaced. Inter-area and intra-area transport accessibility will play a role in the attraction of people and the location of place of residence in relation to place of work, as will factors such as housing availability and costs, location of services such as schools and other factors which affect overall quality of life.
In examining this issue, evidence may be gathered through surveys of individuals in cases where this is seen to be an important benefit from the option under consideration. In other instances, information from property agents may be adequate to show that transport infrastructure plays a role in the ability of an area to attract/retain residents. Additional information on this sector could involve discussions with the development industry, property agents and the public sector, the latter as planning authority and provider of basic infrastructure.
It should be noted that attracting residents who would otherwise locate elsewhere involves displacement, and should be treated as a positive impact only where increasing resident numbers or strengthening the social mix of the population is a policy objective, as may be the case in regeneration areas.
While partial and to a degree qualitative, this approach can be used to consider both future economic and other trends in an area, and also future developments such as housing. The role of the transport option in inducing or enabling such development can be considered, but this will also help to identify developments which are not induced by the transport option but which may give rise to additional demand on the transport network.
