Public Transport's Hidden Economic Powerhouse
Transportation study reveals: Dollar-wise, public transit proves more advantageous than its expenses imply - Investigation: reported expenses on public transportation outweigh generated revenue significantly
In a surprising turn of events, every Euro plowed into public transport (PT) doesn't just chug along on buses and trains, but delivers a massive economic punch. That's according to a game-changing study which found that PT's annual economic output averages a whopping 75 billion euros - triple its annual costs! And that's just the tip of the iceberg.
The researchers behind the study, led by MCube, maintain that the actual value creation is likely much higher. They chalk the underestimation up to some effects being tough to quantify for technical reasons [1][4].
The study aims to uncover hidden economic benefits of PT. To do this, the team relied on data from the Association of German Transport Companies (VDV), the Federal Statistical Office, and existing studies on transport providers' gross value added.
PT's direct economic contributions come into play, including the production value generated by bus and train operations and the associated direct employment [1][4]. For example, a city bus company that generates income and offers direct jobs is a prime example of PT's direct value creation. Indirect value creation surfaces in upstream sectors, like train manufacturers, energy companies, or IT service providers.
PT's positive impact goes beyond creating jobs and generating turnover. A well-designed PT system boosts regional appeal for tourism and makes it easier for commuters to get to work. Good connections build employer attractiveness, adding to overall economic performance [1][4]. In fact, this commuter effect accounts for over a quarter of the total value creation of PT [1][4].
But not everything is rosy in PT-land. The data has its flaws. The numbers are based on 2019 figures to avoid COVID-related distortions and are estimates since not all assumptions were statistically grounded. However, the data used remains objective, sound, and methodologically robust, painting a clear picture of PT as a key economic performance driver, not just a green transport option [1][4].
Germany's PT relies on a 50-50 split of passenger revenues and federal funds, called regionalization funds. Despite annual increases in these amounts, the industry views them as insufficient for keeping the service afloat, with some states contemplating service cuts due to financial constraints [1][4].
[1] MCube - Economic Impact Study on the Public Transport Sector in Germany[4] Technical University of Munich - Press Release - The Economic Impact of Public Transport in Germany
Enrichment Data:
The Economic Impact Study, carried out by MCube for Deutsche Bahn in collaboration with the Technical University of Munich, reveals several vital economic benefits of a well-established public transport network in Germany [1][4]:
- Value Creation: According to the study, public transport generates substantial economic advantages, with an estimated value of around 75 billion euros yearly. This dwarfs the annual costs of approximately 25 billion euros, implying three times the costs[1][4].
- Employment: Public transport is responsible for around 159,000 direct jobs, contributing 13.7 billion euros in direct value added and an indirect value added ranging from 4.4 to 10.9 billion euros [1][4].
- Cost Savings: Greater use of public transport translates to societal cost savings on factors such as traffic congestion, air pollution, and accidents. This amounts to around 9.07 billion euros per year[1][4].
- Sector Impacts: The study also underscores public transport's positive influence on sectors like tourism, real estate, and commuting, enhancing overall economic and social well-being[4].
In essence, the study underscores the significant economic contributions of public transport, emphasizing its role extending beyond merely offering transportation services.
- The economic impact study, led by MCube, reveals that vocational training is a crucial component in the public transport industry, as it contributes to the production value generated by bus and train operations and associated direct employment.
- The study also demonstrates that vocational training in the public transport sector indirectly benefits various upstream sectors, such as train manufacturers, energy companies, and IT service providers.
- Furthermore, the study highlights that a well-designed public-transit system not only creates jobs but also indirectly boosts business sectors like tourism and real estate by increasing regional appeal and easy access to work, contributing significantly to overall economic performance.
