Process and technology innovation: public transit opportunities in fast-growth economies

By Tracey Grose

The fastest growing urban centers are also home to the world’s worst commuter experiences. Eight of the top ten painful metro areas reported in IBM’s most recent Commuter Pain Index are in fast-growth economies. Development of public transit systems is moving at a rapid pace in many areas, and some places may be investing in more than they actually need or can afford.

Investing in public transit systems is vital for supporting continued economic growth in the developing world and especially for harnessing the talent of women. Creating safer travel will ease the entry of women into the labor force in these transforming societies. In their book Winning the War for Talent in Emerging Markets: Why Women are the Solution, coauthors Sylvia Ann Hewlett and Ripa Rashid cite the lack of safe travel between work and home as one of the major obstacles to women entering the workforce in the developing world.

In 1863, the world’s first subway opened in London. Today, there are nearly 190 subway systems, and across Asia and South America, developing countries are leading new construction and expansion of existing systems. China accounts for three of the top ten largest metro systems in total length. According to the consultancy, Roland Berger, as reported in The Economist, "The world market for railway infrastructure and equipment has been growing at 3.2% a year through the global downturn, and is set to grow at around 2.7% a year until 2017." This is in part driven by government stimulus funding following the global financial crisis.

Building new infrastructure in developing economies can be easier than the more complicated retrofitting issues faced by advanced economies. However, cultural and institutional factors can result in over building and unnecessary financial burdens for cities in the future. As recently reported by The Economist, local officials in China are incentivized to boost local GDP without considering whether a particular infrastructure project, such as building a subway, makes economical sense in the city. Typically, a metro area must have a population of three million for the expense of a subway to pencil out. Local experts estimate that of the 38 cities in China currently building subway systems, less than half are actually large enough to support such systems. For such cities, cheaper light rail would make better sense.

The World Bank is supporting the development of public transit systems around the world and offers financing as well as advice to locals. Recommendations include the appropriateness of a system for a particular location and public-private operations of systems where the planning takes place by a central governing authority. To assist with the application of communications technology for improving transit efficiency, the World Bank offers a Toolkit on Intelligent Transport Systems for Urban Transport. Emerging and advanced economies are trying out new digital tools for transportation management, and advances in electric bus charging offer better options for cleaner buses in the near future.

Mexico City provides an example of success with the recent completion of its bus rapid line (BRT), Metrobús. An efficient and high-capacity transit model, BRT systems can move more people more efficiently through urban centers than traditional bus routes without disrupting traffic. Mexico City’s award-winning line was completed from conception to operation in three years, so the process of its development is also seen as model worth examining by other cities such as San Francisco, California.

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