11

Transportation and Information Technology

By now, most Canadians are aware of the rapid transformation that the new information and communications technologies, or ICT, have brought into their lives. From cell phones to satellite dishes, there's hardly a family that doesn't rely on at least one of the new technologies to carry out a job or contribute to the day's entertainment.

Yet many Canadians would probably be surprised to learn how much these same technologies are also dramatically affecting the transportation modes that contribute to their nation's economy. They may realize that ICT has begun to change the way they travel, but be unaware of how much it is changing the way in which they order, buy, sell and deliver or receive goods. This chapter provides an overview of the main impacts of information and communications technology on all four modes that make up Canada's transportation sector: road, rail, marine and air.Note 1

The "Big Picture": ICT, the Transportation Sector, and growth and socialization

Most Canadians would probably say that ICT entered their lives rather suddenly in the early 1990s, and accelerated rapidly as the decade matured. Statistics bear out that ICT did indeed induce gains in economic productivity in the 1990s, but these technologies actually entered industry more than a decade earlier. Why then, did productivity increases take so long to appear?

Such a "productivity lag" occurs because societies need time to diffuse and understand new technologies, and to modify patterns of social and industrial organization to take advantage of them. ICT-related productivity increases in the 1990s may be the harbingers of first-stage changes to industrial and social organization that will become increasingly apparent as we enter the next millenium. A similar productivity lag accompanied the introduction of the railways, which ultimately increased the productivity of the eras that followed their introduction.

ICTs' impact goes way beyond their repercussions on the transportation sector, as it has repercussions for society as a whole.

One change foreseen is that ICT's ability to make information more easily and rapidly accessible will reduce the costs that businesses will charge to cover transaction and organization costs. These reductions could ultimately generate social and industrial changes.Note 2

For example, businesses and other social organizations can reorganize the way they supply their clients' needs by making greater use of contract, rather than salaried, employees. Indications are that this trend has already begun, and may affect the transportation sector in the long term.

Two examples support this indication. The first is the growing number of businesses that have reduced their staff or are organizing their staff to work from home as telecommuters. The second is the increasing growth in the number of self-employed workers who rely on telecommuting to deliver at least some of their services to their clients.

These ongoing changes in social organization may have various long-term effects on the transportation sector, including changes in worker and employer location, changes in rush hour (or peak-load) commuting patterns, and changes in the need for mass-transit systems.

These changes may have further repercussions: the very organization of a community could ultimately be affected. Consider, for example, the implications of changes in worker and employer location. As more workers switch from regular daily shifts to bi- or tri-weekly meetings, they may be willing to accept longer commuting periods. Consequently, both workers and their employing industries may locate farther outside current urban concentrations, each taking advantage of more spacious and less expensive properties.Note 3

Figure 11-1 illustrates how urban centres have, over time, spread from a central core to the outlying suburbs. ICT-diffusion has the potential to accentuate this historical trend. As workers and employers become more autonomous and flexible, scope increases for reducing or avoiding the daily traffic congestion associated with the traditional nine-to-five shift.

The Impact of ICT on the Supply of Transportation

ICT's Impact on Transportation Demand

Summary

NOTES:

1 The content of this chapter is a summary of information gathered from a project conducted in 1998 by Transport Canada to assess the impact of ICT on the Canadian transportation sector.
The project consisted of a literature review and two seminars in Ottawa, Ontario. The first seminar, focussing on ICT's impact on the supply of transportation, was held on November 2, 1998. The second, focussing on ICT and the demand for transportation, took place on November 27, 1998. Invited speakers included a mix of Canadian and international experts. The chapter summarizes the views expressed by the said experts. References help identify the experts expressing their views.

2 "Transaction costs" refer to the costs of making a market, and all costs associated with gathering the information needed for all participants in a market (e.g. labour, management) to develop and sign a contract for each specific activity. The reason that we have firms, rather than contract for each individual exchange of labour or goods, is to reduce transaction costs (Coase, Ronald, 1937, "The Nature of the Firm", Economica, 4).

3 The extent of sprawl, and the pattern of urban form is, of course, also dependent on the deliberate social choices made by society in terms of urban planning. (Marvin, Simon, 1998, "Urban Futures, Integrating Telecommunications into Urban Planning", Proceedings, Transport Canada Seminars on the Impact of Information and Communications Technology on Transportation, Ottawa, Ontario, November, 1998).