Economic Importance of Transportation Industry


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Mobility is one of the most fundamental and important characteristics of economic activity as it satisfies the basic need of going from one location to the other, a need shared by passengers, freight, etc. and information. Reduced mobility impedes development while greater mobility is a catalyst for social and economic development. Mobility is thus a reliable indicator of development. Providing this mobility is an industry that offers services to its customers, employs people and pays wages, invests capital and generates income. The economic importance of the transportation industry can thus be assessed from a macroeconomic and microeconomic perspective:

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At the macroeconomic level (the importance of transportation for a whole economy), transportation and the mobility linked to a level of output, employment and income within a national economy. In many developed countries, transportation accounts between 6% and 12% of the GDP.

At the microeconomic level (the importance of transportation for specific parts of the economy) transportation is linked to producer, consumer and production costs. Transportation accounts on average between 10% and 15% of household expenditures while it accounts around 4% of the costs of each unit of output in manufacturing, etc.

Transportation is one of the world’s largest industries. Its sectors range from taxis to trucks to airplanes, trains, courier services, ships, barges, warehouses and logistics services.

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Aadi Vaidya

From the small Mandi town of beautiful Himachal Pradesh state in India, I have completed my Bachelors in Management Studies from St. Xavier's College - Mumbai. An 'ethical success' in life is what I am striving for. I adore my parents. Mahatma Gandhi, Sachin Tendulkar and Albert Einstein are my inspirations.

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Aadi Vaidya

From the small Mandi town of beautiful Himachal Pradesh state in India, I have completed my Bachelors in Management Studies from St. Xavier's College - Mumbai. An 'ethical success' in life is what I am striving for. I adore my parents. Mahatma Gandhi, Sachin Tendulkar and Albert Einstein are my inspirations.

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