Driving Economic Growth – Mobility for Development

Mobility is key to economic development. Businesses need road, rail, shipping and air networks to transport goods and services to markets, while people need them to get to jobs and use basic services.

Mobility is not solely about vehicles; it is also about infrastructure, communications technology, access to resources and energy, facilitation of trade and simplifying burdensome bureaucracy. It is also intimately linked to the global energy crisis. Today the transport sector accounts for one-quarter of global CO2 emissions and is growing by 2% per year.

It is estimated that global demand for oil will increase by 60% up to 2030, and some 75% of this will come from the transport sector, mainly in developing countries. Increased demand for mobility results in higher energy demands, both to fuel new vehicles and modes of transport and for production and manufacturing processes. It also implies greater demand for raw materials such as rubber, increased demand for cement and asphalt for road building, and higher rates of extraction of metals from mines, including rarer, more specialized metals, many of which are found in less politically stable areas of the world.

As economic growth and industrialization accelerate and livelihoods and incomes improve, the demand for mobility increases. In much of the developing world, demand for mobility solutions to drive economic growth continues to outpace supply, while paradoxically the growing number of vehicles has not been matched by improved infrastructure or road safety provisions. The World Health Organization rates road accidents as a major killer and notes that 85% of all road deaths occur in developing or transitional countries, a disproportionate burden given that these countries own only 40% of the world’s motor vehicles. Around half the world’s population now lives in cities, and many of these cities are suffering increased congestion, haphazard urban planning, and increasing pollution from traffic.

In addition, efforts to increase rural-urban connectivity can result in the destruction of important ecosystems and habitats and lead to the displacement of poorer segments of the population to make way for roads and rail links. The expansion of global freight, while a major driver of economic growth, represents a further challenge, particularly for land-locked countries. Inadequate or poor road or rail links, high vehicle operating costs, and transit charges all help push up the costs of transborder freight in landlocked countries.

Similarly, although 80% (by tonnage) of trade originating in developing countries is waterborne, the costs and time required to move containers to seaports can have important implications for the competitiveness of traded products. Efforts to manage the mobility-development conundrum offer exciting and innovative opportunities for businesses.