In a provocative thought piece published in fall 2012, Northwestern University economist Robert Gordon argued that for the United States, “future growth in real GDP per capita will be slower than in any extended period since the late 19th century.” Gordon posits that the gains in productivity from major technological changes in society have been tapped out. The last major technological change was the computer/Internet “revolution,” but he feels we got all that we are going to get in productivity gains — and, therefore, in economic growth — by about 2005. The rest is all for fun (think iPods, game apps, streaming movies), which, combined with globalization, has resulted in the exporting of North American jobs.

Whether Gordon is right in the long term, technology and slower growth are having profound effects on urban environments, work patterns and people’s behaviour that require us to question our transportation infrastructure needs.

Transportation infrastructure has always played an essential role in our economy. Whether it was paths for our feet and then for horses, and now roads and rails for private vehicles and public transit, infrastructure allows for the movement of goods and people. Well-designed, efficiently run transportation infrastructure reduces the costs of movement by keeping congestion manageable, and it also improves the connectivity of people to their work and play. Economic productivity is thus enhanced, thus raising the standard of living.

Urban areas continue to wrestle with the need to find funding to upgrade transportation infrastructure, competing with other worthy demands on public sector funds for areas such as health, education and poverty reduction. Subsidized roads and public transit provide essential mobility that allows people, by choice or necessity, to get to work and go about their daily activities.

But our infrastructure is aging. Across Canada, urban areas require investment of billions of dollars to maintain, upgrade and extend their transportation networks.

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Photo: CP Photo

So what happens in a low- or no-growth economy? If we accept Gordon’s argument that we’ve seen all the gains from the last great technological innovation of the 20th century, what will be the effect of less-than-anticipated economic activity on the way we move people and goods? And in a slow-growth world, how will we fund the massive expenditures needed for the transportation connections that have always greased economic activity?

But here’s a thought: what if slow or low growth, combined with the IT revolution, means fewer people will be shopping in person, travelling to their jobs, maybe even travelling to see friends? Who needs to walk, take transit or drive long distances for social engagements when you can stay in touch by Skype and Facebook?

Yes, telecommuting has never produced the new concept of the “office” that was once predicted. And yes, Yahoo’s CEO has just told employees who were working from home to come into the office. But those may be small setbacks in a historic shift in our travel patterns. If companies can outsource to anywhere in the world, why should we leave home to go to work? Vibrant urban environments build liveable communities and promote walking and biking — all very healthy stuff — which does need infrastructure, but it does not need expensive subways or roads. Our tolerance for the hellish daily commute that never seems to diminish, no matter how much road capacity we add, may be limited.

A society of slow growth may be the tipping point for transportation. With lower growth, the amount of goods that need to move may not increase at the rates we are accustomed to, meaning there is less need for that incremental investment in roads and rail. Clearly we will need to keep our transportation networks in good repair and to promote more efficient public transit over the use of the single-occupancy vehicle. But slower growth may change the assumptions that go into our projections for new transportation capacity. That possibility is something for planners to think about before they take long-term decisions to pump billions of dollars into infrastructure spending, at the expense of investments in health or education, which we will need to improve our quality of life.

Nancy Olewiler
Nancy Olewiler is an economist and professor in the school of public policy at Simon Fraser University. She is on the board of the Institute for Research on Public Policy, and is co-chair of B.C.’s Climate Solutions Council; chair of the macroeconomic accounts advisory committee at Statistics Canada; a member of the external advisory committee on regulatory competitiveness for Treasury Board; and sits on the boards of Genome BC and Technical Safety BC.

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