Forecasting Eye
Linking up cities around the world is becoming fashionable.
On the back of European high speed rail lines such as Paris – Brussels – Cologne – Amsterdam – London, new links are being planned and built in many countries.
There is a plan to link Los Angeles, San Francisco and Las Vegas with high speed rail. Already 22 countries have high speed rail systems while another 14 have plans in place. Around 50,000 km of high speed rail route is expected to be in operation worldwide by 2030 (with China accounting for about 75% of the total).
Other schemes linking cities include India’s £70 billion plan to create a 1,400 km long industrial development corridor between Delhi and Mumbai and China’s recently opened Hong Kong – Zhuhai – Macao Bridge, the World’s longest fixed link, connecting major cities on the Pearl River Delta by road. Meanwhile Morocco opened Africa’s first high speed rail line in November 2018, more than halving the travel time between Tangier and Casablanca – some 330km – to just over 2 hours, while Iran is constructing a 420 km line between the three major cities of Tehran, Qom and Isfahan.
Perhaps more relevant to the UK is Japan, particularly the Tokaido corridor, a vast urban agglomeration in which high speed rail investment has promoted deepening economic integration. A 2016 study by the Asian Development Bank showed that the Tohoku (Tokyo – Aomori) and Joetsu (Tokyo – Niigata) Shinkansen, opened in 1982, had centralised service sector jobs where distances between cities were long but decentralised them where they were short; more peripheral areas saw manufacturing employment increase. This supports the view that the Shinkansen have helped ‘sort’ different types of economic activities, resulting in greater specialisation and the creation of much larger, more competitive ‘economic zones’.
Evidence from abroad suggests that there might be a case for better transport connections that could boost the move in the UK’s major regional cities towards knowledge intensivehigh value services. These cities share many of the same attributes that make London globally competitive but, critically, they suffer individually from a lack of scale. By enabling them to interact with one another with very low levels of transport related frictions, local and regional markets could merge and greater regional specialisation develop. Beyond this, the resulting ‘economic mass’ of the system of cities would be significantly larger than that of the sum of the individual cities, delivering a much needed supply side boost to the economy and relaxing one of the constraints on London’s growth – the high price of property in London.
The size of the potential prize appears huge. Based on figures from a detailed survey of the agglomeration literature (Rosenthal & Strange), the transport team at Cebr estimates that the collective GVA of seven of the largest conurbations in England (London, Birmingham, Manchester, Leeds – Bradford, Liverpool, Sheffield, Nottingham – Derby) would increase by between 16 and 35 per cent if their economies were to be fully integrated, i.e. act as if they were a single city. This would boost the UK economy by between £110 and £240 billion per annum. Obviously this is the top end of the range and full integration is unlikely with even the next generation of technology. But it gives an idea of the scale of prize that as a nation we could be aiming for with a more connected transport policy. An improved (ideally cheaper) HS2 and Northern Powerhouse Rail could make a start in achieving this prize.
Contact: Ian Birch, ibirch@cebr.com, 020 7324 2871.