Lesson 1.1: Importance of Transportation
Lesson Summary
Tapping natural resources and markets and maintaining a competitive edge over other
regions and nations are linked closely to the quality of the transportation system. The speed,
cost, and capacity of available transportation have a significant impact on the economic
vitality of an area and the ability to make maximum use of its natural resources. Examination
of most developed and industrialized societies indicates that they have been noted for high-
quality transportation systems and services. Nations with well-developed maritime systems
(such as the British Empire in the 1900s) once ruled vast colonies located around the globe.
In more modern times, countries with advanced transportation systems—such as in the
United States, Canada, Asia, and Europe—are leaders in industry and commerce. Without the
ability to transport manufactured goods and raw materials and without technical knowhow, a
country is unable to maximize the comparative advantage it may have in the form of natural
or human resources. Countries that lack an abundance of natural resources rely heavily on
transportation in order to import raw materials and export manufactured products.
Discussion
Transportation and Economic Growth
Good transportation, in and of itself, will not assure success in the marketplace, as the
availability of transportation is a necessary but insucient condition for economic growth.
However, the absence of supportive transportation services will serve to limit or hinder the
potential for a nation or region to achieve its economic potential. Thus, if a society expects to
develop and grow, it must have a strong internal transportation system consisting of good
roads, rail systems, as well as excellent linkages to the rest of the world by sea and air. Thus,
transportation demand is a byproduct derived from the needs and desires of people to travel
or to transfer their goods from one place to another. It is a necessary condition for human
interaction and economic competitiveness.
The availability of transportation facilities can strongly influence the growth and
development of a region or nation. Good transportation permits the specialization of industry
or commerce, reduces costs for raw materials or manufactured goods, and increases
competition between regions, thus resulting in reduced prices and greater choices for the
consumer. Transportation is also a necessary element of government services, such as
delivering mail, defense, and assisting territories. Throughout history, transportation systems
(such as those that existed in the Roman Empire and those that now exist in the Philippines)
were developed and built to ensure economic development and ecient mobilization in the
event of national emergencies.
Social Costs and Benefits of Transportation
