People drive economic activity, and people move.
They move through the economy on their way to and from work, vacations, and retail outlets.
All of these movements create data, and it is only now that the link between traffic data and the economy is becoming apparent and usable.
As our tools to collect and analyse this data improve, we become better at understanding the impact of traffic and movement on the economy.
These actionable insights not only make our roads safer and more efficient and our economy more sustainable but also play a bigger role in our city planning.
If the roads are congested, this creates traffic bottlenecks that work as a brake on the economy, invariably slowing and hindering the speed of economic interactions.
Transportation data plays a significant role in removing these bottlenecks and freeing up the flow of vehicles and related economic activity.
In North America, historical data has shown a close correlation between Vehicle Miles Travelled (VMT) and Gross Domestic Product (GDP) since 1936, the earliest year when the Federal Highway Administration began collecting VMT data.
According to the North American Committee on National Statistics, location and development decisions are heavily influenced by transportation. The relationships between transportation and the economy are very complex, and as a result, poorly understood:
“Transportation is an enabler of economic activity and a facilitator of international trade. Transportation is a measure of economic activity: in many instances, it may be a leading indicator, in as much as physical movements precede financial transactions. Transportation is a reflection of economic activity, in as much as products must be moved to markets. Some of these relationships are clearly circular: transportation affects economic conditions, and economic conditions influence transportation. Furthermore, all of these relationships shift with changes in technology, economic development, geographic changes, and many other factors.”
Since the Second World War, when national resources were devoted to the war effort, VMT and GDP have moved in tandem trajectories, but they began to diverge around 2003. The reason? Greenhouse gas emission policies date from around that period, as does diversification of other transport modes. If we were to add that data, we could create a more accurate and robust model that took into account the contemporary context.
We can see similar patterns emerge in Australia in the way the two largest state economies of NSW and Victoria have responded to the COVID-19 pandemic restrictions.
From June to December 2020, final demand (total demand for final goods and services in an economy) as measured in dollars was on a steady increase in NSW, and over that same period, traffic volume rose by similar percentages.
Meanwhile, in Victoria, economic activity and traffic volumes dipped noticeably in September as the state went into its second lockdown, but then both increased in tandem in December as the economy opened up.
As we look into the future, we see vehicles becoming increasingly connected, and other types of movement such as walking and cycling are being meaningfully measured.
This provides a holistic and accurate view of the link between movement and the economy to enhance infrastructure and services planning.
Data will also play into the development of Mobility as a Service (MaaS), the global trend to combine all transport options in a single platform.
A range of data is already available to drive MaaS, such as live public transport and traffic information, but more is needed.
In the future, taxi and rideshare data can be integrated with the current and predicted availability of bikes, scooters and car-share services.
For consumers, MaaS is about seamlessly accessing and paying for different transport modes to move efficiently throughout our cities. At the same time, for planners, MaaS is a crucial element in building smart and more sustainable cities.
Linking economic activity and transport in real-time can inform the decisions we make today and generate data technologies that can predict the future.
Traffic data has significant applications beyond the transport sector, and we are on the cusp of major change.
The volume of data we are collecting is increasing exponentially, and as it does that, so is the potential use from data insights.
If we bring data together in a meaningful way, we can not only find the bottlenecks in our economy but drive decisions that positively enhance how our communities and societies function.
Article written by John Cardoso, former Intelematics employee and contributor of the Intelematics Thought Leaders Club.
