Glen Weisbrod & Chandler Duncan

Economic Development Research Group, Inc.

Susan Moses, SJ Moses & Associates

TRB Annual Conference, January 2014

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LandDevelopment

EconomicDevelopment

TransportationInfrastructure

Technology & Demographic Change

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The American economy is changing.

High growth industries have specific location requirementsand clustering patterns.

High growth clusters concentrate travel demand andincreasingly strain resources.

To sustain growth industries, needs for supportinginfrastructure must be addressed.

Failure to provide sufficient capacity for high growthindustry clusters has a cost.

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High Tech, High Growth Sectorsare important to the US economy

US R&D Leadership:Biotech, Computer/Software

Highest Growth Rate

Source of Exports and Inward Investment

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Sector$ Output Growth

(Top Six)Employment Growth

(Top Six)

Professional, technical services X X

Financial Services X X

Software – Information Service X X

Construction X X

Retail X

Wholesale & warehousing X

Health care services X

Education X

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Jones Lang Lasalle, High-technology Office Outlook, United States, 2012.

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(Values represent Location Quotients; a value of 1.0 means that the study area has the statewide averageconcentration of the given industry, 2.0 means the area has double the state average concentration and 0.5means it has half of the state average concentration of the given industry.)

Source: Massachusetts Office of Labor and Workforce Development, 2011 data

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Cluster Key Industries Setting

Boston area: Kendall Square biotech; IT; internet; social media Urban

Boston area: 128 Corridor software; hardware, pharmaceuticals Suburban

San Francisco area: Silicon Valley software; internet; IT, social media Suburban

San Francisco: Midtown/SOM social media/gaming; internet; biotech Urban

Atlanta area: Medline health; biotech Suburban

Chicago area: Deerfield pharmaceuticals; headquarters Suburban

Denver Technology Center IT; telecom.; software Suburban

Seattle area: South Lake Union health; biotech; internet Urban

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Evolution: from pharma & computer clusters featuredin 1982 Congressional studyto today’s biotech & software clusters

Reasons for clustering (agglomeration):

Access to broad, skilled workforce (“urbanization” economies)

Access to research universities (“localization” economies”)

Land and wage premiums paid

Support high productivity & high growth, but…

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Congestion

High Growthin a Defined

Area

TransportationSystem

Capacity isLimited Limited Ability

to Spread Out

Reduced Labor Market Access

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Rt.128 Massachusetts

Denver Tech Ctr

Silicon Valley

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Rt.128 MassachusettsDenver Tech Ctr

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Industry ClusterCommuting Trips at

Peak

Peak V/C onRoutes Accessing

Cluster

% Increase inAuto Delay2010-2040

2010 2040 2010 2040

Cambridge Kendall 50,000 69,000 At capacity 1.4 27%

128 Corridor 24,000 26,000 At capacity 1.3 39%

Silicon Valley 39,000 56,000 At capacity 1.4 45%

SF Midtown/SOM 102,000 116,000 At capacity 1.5 20%

Atlanta Medline 64,000 97,000 At capacity 1.2 22%

Deerfield, IL 27,000 41,000 At capacity 1.5 39%

Denver Tech Ctr 9,000 10,000 At capacity 1.5 **

Seattle S Lake Union 14,000 18,000 At capacity 1.5 53%

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Industry Cluster

Access Routes Lanes Needed (2 way Free Flow)

MajorHighways

at Site

LanesAvailable

today

AddedLanes

Neededtoday

Total LanesNeeded by

2040

WideningFeasible?

Cambridge Kendall 2 8 +8 +10 No

128 Corridor 2 12 +4 +6 Partially

Silicon Valley 2 14 +2 +4 Partially

Atlanta Medline 2 18 +6 +10 No

Deerfield , IL 2 12 +2 +6 Partially

SF Midtown/SOM 1 10 +4 +6 No

Denver Tech Cr 2 16 0 +8 No

Seattle S Lake Union 2 16 +4 +10 No

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Private Fleets – bring workers from central cityand elsewhere in the metro area (stopgap action)

Public Investment

Google San FranciscoDeerfield, IL (Chicago Area)

Biogen CambridgeDenver Tech Center

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Industry Cluster

Transit ExpansionPlanned or Proposed

PrivateShuttles inExistence

Housing forMillennials

PlannedBus

ServiceFixed

Guideway

Cambridge Kendall Yes Yes Yes Yes

128 Corridor Yes Yes

Atlanta Medline Yes Yes Yes

Deerfield , IL Yes Yes Yes

Denver Tech Ctr Yes Yes

Seattle S Lake Union Yes Yes Yes

Silicon Valley Yes Yes Yes

SF Midtown/SOM Yes Yes Yes

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Baby Boomers aging

Millennial generation: values

Densification & condo booms

Urban “buzz”

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Cambridge Kendall Square San Francisco (Google office)

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Failure to provide sufficient public transportationcapacity for high growth clusters will have a cost

Lost productivity via either higher cost or lowergrowth

Direct effect on clusters: $32 billion of income390,000 to 480,000 jobs by 2040

Multiplier effects are greatest for R&D (3 – 4x)

Other types of clusters not counted

Report on the APTA web sitehttp://www.apta.com/resources/reportsandpublications/Documents/TransitHighGrowthClustersUS-Final2013-1124.pdf

Report summary & links:see top of EDR Group web sitewww.edrgroup.com

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