Connecting transport and agglomeration

In 2012-2014, I participated in a European project called I-C-EU. It focused on the Impact of Transport Infrastructure on International Competitiveness of Europe. The project sought to relate the concept of competitiveness to that of transport infrastructure development.

We explained this relationship by state-of-the-art assessment tools, gave an analysis of the current situation of European economic and competitiveness, and an overview of the current European strategy to improve economic performance and competitiveness. Based on this, I-C-EU provided recommendations to the European Commission on political interventions to enhance the competitiveness of Europe both externally, i.e. in relation to the rest of the world, and internally, i.e. between its countries and regions.

Transport plays a vital role in the different stages of world economic development, including the current phase of globalisation. In particular, as Baldwin (2006) summarizes, the invention of the railways made the spatial separation of production and consumption possible, so that cities could start to produce goods for other cities, and their food could come from further away. Before the nineteenth century, such regional specialization had been lucrative only for very special commodities, such as pepper from the East Indies; but from that moment onwards, whole nations could specialise according to their competitive advantage. More recently, the digital revolution made it possible to separate not only production and consumption, but even the separate stages of production – the so-called “second unbundling”. Such unbundling involves even more transport of intermediate goods, even if only between adjoining factories as in the case Dell computers (Friedman 2005). Regions without appropriate transport infrastructure risk being left out of the global chains of production. Hence the prime importance of transport infrastructure for growth and competitiveness.

I contributed to the four deliverables of the first work package of the project. In particular, the theoretical starting point called “ISSUES OF COMPETITIVENESS AND REGIONAL GROWTH IN RELATION TO TRANSPORT INFRASTRUCTURE INVESTMENT: A LITERATURE REVIEW ON ASSESSMENT METHODOLOGY” is sometimes cited here and there. It contains a brief survey of the issue of competitiveness, focusing on two questions: how is it generally and can it be best defined (sections 3 and 4), and what determines the competitiveness of a region (section 5)? I also gave a brief overview of related theoretical (section 6) and empirical work (section 7), to show how the concept is operationalized in models and estimations.

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