Operations: the Secret Tool for Economic Growth

By Richard Mudge, Ph.D., Compass Transportation and Technology, Inc.

Transportation operations have a direct impact on people’s daily lives, probably more so than any other public service. The quality of transportation determines how we get to and from work or to and from visits to friends and family or health appointments, shopping, and recreation. Even individuals who do not use the roadway system depend on transportation for deliveries of food, health care, and other necessities.

But operations actually play a more vital economic role, albeit one that is largely unseen. Very simply, businesses perform better with access to large pools of qualified labor and individuals improve their financial well-being with access to more potential jobs. In sum, labor and job access are keys to our nation’s ability to generate economic productivity and support growth in general. Operations provide the link between the potential value of our transport network and its reality.

A more reliable system provides a smoother flow of traffic. This, in turn, makes it practical for individuals to travel further, generating access to more jobs. As a rule of thumb, a ten percent improvement in effective speed, can improve economic productivity by about 2.5 percent. This is a small number but one that is multiplied times the overall size of the economy.