US Department of Transportation
FHWA Planworks: Better Planning, Better Projects
Economic Development and the Decision Guide
Transportation systems connect workers, consumers, businesses and resources—key components of economic activity. Collaboration with economic development stakeholders can facilitate alignment of transportation decision making and economic development efforts, maximizing investments in both.
PlanWorks can help transportation practitioners understand when and how to consider economic development impacts of transportation choices, by presenting questions to consider, supporting data, and examples of success at Key Decisions.
Three areas of information support this integration:
- Economic Development and the Decision Guide (below). Each of the four planning phases provides opportunities to collaborate with economic development stakeholders to enhance transportation decision making. The Decision Guide describes when and how to include economic development considerations, including questions to consider, data, relationships to other topics, and examples from current practice.
- Economic Effects of Transportation Investments. Different analytical approaches are effective for each of the four planning phases. Access key questions and see the relationship between certain findings and the associated approach.
- Examples from Practice. Transportation planning efforts can effectively integrate economic development, in both small and large communities.
Hover over the highlighted Key Decisions to understand the specific relationship of economic development to the decision. Click on any highlighted Key Decision for more information about questions, data, and relationships that support this interface. Key Decisions that are greyed-out have no specific relevance to the individual application or topic area but are still accessible from this graphic.
Economic Effects of Transportation Investments
Assessing economic impacts at various stages of transportation decision making ensures that proposed plans and projects serve transportation needs as well as support economic development objectives. The extent of analysis needed is largely dependent on the phase of decision making.
There are typically four levels of analysis used to assess potential economic development impacts- ranging from cost savings for travelers and businesses to measuring the broader economic effects experienced beyond the immediate area. These levels of analysis build on each other, but not all levels are needed for every stage of transportation decision making.
Click on each of the analysis levels to understand which factors are considered.
Measure Impact Factors
This lowest level of analysis measures the quantitative and qualitative impacts on travel costs, the business market within the study area, job access and quality of life. Some questions to consider are:
- What are the significant changes to travel costs for travelers and businesses, including travel time, safety impacts, and vehicle operating costs?
- How many jobs could be created or lost as a direct result of the transportation investment?
- How might businesses' access to suppliers or customers change?
- How might people's accessibility to jobs and other amenities such as schools, hospitals, and commercial establishments change?
- What impact will the project have on congestion, safety, and the quality of life in general?
Estimate Ability to Compete
Findings related to the transportation impacts help inform the analysis of the effect on business competitiveness. This level of analysis examines the impact of a transportation improvement on different types of businesses. Some questions to consider are:
- How will the relative costs of doing business change in the study area?
- Will businesses become more or less competitive with businesses in other parts of the state, region or beyond?
- What types of businesses gain and lose from the transportation investment, and why?
- Could the project stimulate new development (residential, commercial, etc.) and attract new businesses to the region?
Estimate Growth or Decline
Findings related to business competitiveness help inform the analysis of how the transportation improvement will impact the character of business activity in the area. Some questions to consider are:
- Will there be a growth or decline in business activity as a result of the transportation investment?
- How will business sales and income change?
- What types of jobs will be created or lost? At what wages?
- Are the jobs and businesses being lost or created simply a transfer from other locations within the region? How might this transfer be accounted for in deciding the study area?
Estimate Broader Effects
Findings related to the effects on business growth or decline help inform the analysis of the broader impacts of the transportation improvement, beyond the immediate study area. Some questions to consider are:
- How might sales change for businesses that provide supplies and services to the businesses that are impacted by the transportation project?
- How will changes in jobs and wages affect consumer spending?
- Will the project impact property values in the region?
- Will the project have an effect on tax revenues?
- Will the project make the area more attractive to new businesses and workers in the long term?
For more about analyzing the economic development impacts of transportation decision making read, NCHRP 456: Guidebook for Assessing the Social and Economic Effects of Transportation Projects (see Chapter 8).
Examples from Practice
Collaborating with economic development stakeholders by sharing data and information about economic development plans and goals provides mutual support for transportation planning and economic development efforts. These collaborators include local chambers of commerce, economic development agencies and private firms as well as local, regional, and state entities.
Below are examples where economic development stakeholders were involved in the four phases of transportation decision making.
Economic development was a key focus in Binghamton's long-range transportation plan, Transportation Tomorrow 2030: Placemaking for Prosperity. Having experienced decades of population loss and economic decline, local planners and decision makers vowed that future transportation investments would support economic development goals. Business leaders, representatives from major employers, and economic development professionals contributed to the planning process. The outcome was a long range transportation plan that supports economic revitalization by focusing investments in the region's urban centers. Binghamton Metropolitan Transportation Study - Revitalized Urban Centers
The 2035 Long Range Transportation Plan for North Central Pennsylvania envisions a transportation system that aligns with other regional priorities, one of which is economic development. In 2008, the North Central Pennsylvania Regional Planning and Development Commission convened a group of partners and stakeholders, including members from the Comprehensive Economic Development Strategy Committee. The group developed selection criteria for evaluating transportation projects for inclusion in the TIP and STIP. One of the criteria related to economic development is job creation.North Central Pennsylvania's Project Prioritization Process
Economic development was a critical factor in the corridor study on improvements to I-170, an important thoroughfare in Los Angeles County and in the national freight distribution network. The planning process involved representatives from two local ports and local business owners. During the planning process, safety and travel time criteria were used to evaluate project alternatives. The outcome was a locally-preferred project alternative that addressed both travel costs and regional economic development. California I-710 Corridor Planning
The Kelly Parkway Project was proposed to catalyze the redevelopment of the former Kelly Air Force Base. The NEPA study and corridor plan were conducted simultaneously - and both engaged local partners and stakeholders to address potential economic opportunities, as well safety and mobility improvements. This ensured that the NEPA study addressed residents' interests in reducing personal travel costs along with economic development objectives for redeveloping the base property. San Antonio Texas Kelly Parkway Corridor Study