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The Role of Transit in Support of High Growth Business Clusters

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Economic Development Research Group, in conjunction with Compass Transportation and Consulting, completed a study for the American Public Transportation Association  (APTA), exploring the unique transportation needs of high growth, high tech “business clusters.” The report, entitled “The Role of Transit in Support of High Growth Business Clusters in the U.S,”  is the first of its kind to examine how America’s fastest-growing, knowledge-intensive industries — such as bio-technology and information-technology — are creating demand for land and transportation capacity at highly concentrated clusters.

The report used historical trends to show how the high tech sector has transitioned to a greater emphasis on information technology services and biotech R&D services, creating new needs for even tighter clustering in parts of certain urban areas that have access to a highly skilled workforce and proximity to leading research institutions. And while this clustering of high tech, high growth industries supports America’s productivity growth and competitive advantage, it also concentrates travel demand and generates growing stress on the capacity of local transportation facilities.

The study contained in-depth analysis of high tech business clusters in Boston, Seattle, Chicago, Atlanta, San Francisco, and Denver, to identify the transportation policy issues and needs being created by their growth.  It documented the emergence of high tech clusters in each city, and applied regional travel models and regional economic models to portray future (year 2040) scenarios for both cluster growth and traffic growth. In each case, future scenarios showed a looming problem -- projections of fast job growth in the high tech clusters running up against a labor market that will be effectively shrinking as road network capacity limitations lead to rising traffic congestion ... unless future action is taken to support labor market access via expanded transit service.

The case studies show how high tech, high growth business clusters across the U.S. are generating increasing needs for public transportation solutions to support their continued and anticipated future employment growth. This problem is becoming an issue for both older highway-oriented tech clusters and newer, urban-redevelopment clusters. The report shows how both private sector players and public agencies, aware of this problem, are already initiating and planning for future investment in public transportation to address these needs.

While there has been significant past economic, planning and business research documenting the importance of concentrated “business clusters” in globally competitive, knowledge-intensive industries, this study shows that more attention is required to understand the types of infrastructure, services and planning that may be needed to keep these clusters both sustainable and competitive in the future.

According to EDRG President, Glen Weisbrod: While the study raises as many questions as it answers, it clearly points to the need for a national discussion — not just a about the role of business cluster locations in supporting global economic competitiveness, but also about “real world” needs for public transportation investment to help sustain their growth. This research strongly indicates that failure to increase public transportation availability at high tech business clusters can, in the future, cost America billions of dollars of lost economic activity. Preliminary estimates of that cost to America’s economic growth are also presented in the report.

Read the APTA Study  

Area Development Online article

Transportation Reserch Record article

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