Public Transportation, Jobs, and a Clean Energy Economy

The operation and expansion of modern transit systems present economic opportunities similar to other capital, technology, and skill intensive industries. The public transportation industry includes manufacturers, builders, and operators of trains, streetcars, and buses; engines and electric drive systems; information, communications and control technology; maintenance and safety systems; and rail lines, bus lanes, transit stations, and other infrastructure. These supply chains are supported by established companies as well as new start-up businesses in all regions of the country. The manufacture of advanced, energy-efficient transit vehicles are a significant and growing segment of the industry. More than 30 percent of transit buses, for instance, now use an alternative drivetrain system.

High-performance transit systems have been a critical part of economic development strategies for many large metropolitan areas as well as smaller cities and towns in the United States. Certain regions that have been particularly hard-hit by the economic recession are planning improvements to existing transit systems and creation of new transit capacity as part of their vision for future economic development.

On January 14, 2010, the Environmental and Energy Study Institute (EESI) held a briefing on the job creation and economic development impacts of public transportation. Legislation pending before Congress to help sustain job growth and economic recovery (H.R. 2847, Jobs for Main Street Act) contains targeted investments to stimulate job creation and lay a foundation for long-term productivity gains. This briefing examined the potential for public transportation investments to expand U.S. heavy-duty equipment manufacturing; increase employment in construction, operation, and maintenance occupations; and support regional economic development strategies. Speakers discussed recent research by Duke University on high-value manufacturing supply chains associated with public transportation, as well as practical experience in using transit to spur regional economic revitalization.

• High-value manufacturing value chains related to public transportation are vast and complex. For example, five bus manufacturers dominate the transit bus industry, but material processors, component manufacturers (including chassis, electronics, body, and interior parts), and system builders involve dozens of firms.
• The key to expanding high-skill jobs in the public transportation industry is predictable investment, which hinges on more consistent demand, which in turn is affected by the stability of funding sources for transit system operators.
• The United States is a leader in advanced technology and manufacturing for buses, but lags behind other countries in manufacturing for other products such as light-rail transit systems and intercity passenger rail. The United States is approximately 10 years ahead of other countries in advanced hybrid buses yet we are 10 years behind in the manufacture of hybrid passenger cars.
• Manufacturing jobs and value chains associated with public transportation are spread across the United States, but are especially concentrated in 30 states located in the eastern half of the country.
• Public transportation manufacturing businesses have key synergies with other parts of the clean energy economy and the U.S. motor vehicle manufacturing industry, contributing core skills, technology, and production capacity. For example, many of the estimated 30,000 jobs involved in bus manufacturing overlap with the heavy truck industry.
• Public transportation provides important downstream market diversity for numerous companies, yet suffers from lack of diversity in their own supply chains. For example, Cummins makes the vast majority of bus engines, yet bus engines are a small part of Cummins’ overall business.
• Large companies such as BAE Systems (known primarily as a leader in the defense industry) are diversifying their global business strategies by investing in new energy efficient products and technologies for public transportation. BAE is expanding its market in Asia, Europe, and North America and helping to build a U.S.-led globally competitive clean transportation industry.
• Rail is already the most energy efficient form of passenger and freight transport. Next-generation railcars will be self-propelled, providing opportunities for even greater energy efficiency, lower emissions, and more flexible configurations.
• The United States first needs higher speed rail on the path to developing true high-speed rail—just as Europe and Japan developed incrementally in building their present systems. The United States was in a comparable position to these countries 50 years ago, but stopped while other countries kept innovating.
• High-quality transit systems that deliver on convenience, comfort, and reliability have been used to catalyze economic development and stimulate private sector investment. In Cleveland, approximately $4.3 billion of investment occurred in the four-mile Euclid corridor following the creation of an innovative bus rapid transit system.