TRANSPORTATION, INNOVATION, AND DEVELOPMENT: THE COMPANION INNOVATION HYPOTHESIS

It is hypothesized that the benefits of transportation improvements follow from the economy-wide innovation opportunities created as transport services are improved. It is noted that technological improvements are responsible in a large measure for productivity improvements throughout the economy. The argument that transportation services trigger innovations turns on the mechanisms connecting innovations and improved transportation services. Support presented for the argument includes reconsideration of the industrial revolution, the analysis of industry sectors, and the ties between waves of transport investments and long waves in the fortunes of economies.