Impact transportation has on the economy and the environment - Research Paper Example

Products produced in a certain locality can be transported to other regions where they are scarce. In these regions, the prices will be a bit higher. This additional income economically empowers the producers. Efficient transport enhances mobility of people and goods. This saves on time and costs. The people can move easily to their employment places and the businessmen can also transport their products to the markets. This enhances economic activities in the country. Transportation companies also offer employment to many people (Rodrigue & Notteboom, 2013).

This employment provides income to the people and reduces unemployment in a given country. A low level of unemployment is an indicator of economic growth. Another economic impact is that transportation enables access to a wider market. This enables division of labor and specialization. This is because when a variety of products can be availed to consumers when they are required from any region, then the producers of that particular region do not have to produce all sorts of products but can specialize in some of the products.

Specialization leads to better production methods, which eventually lead firms to increase their production. Increased output leads firms to enjoy the economies of scale hence greater profitability. Higher production also leads to a higher demand for transportation services, which leads to greater profitability for those in the transportation business. Transport also enables companies to get access to inputs and skilled labor. Skilled labor enables firms to use the most efficient and cost effective methods in production.

This lowers the cost of production and increases profits for businesses (Mačiulis, Vasiliauskas & Jakubauskas, 2009). Indirect effects include lowering of product prices, increase of product variety and purchases by companies in the transport sector. Since transport enhances the mobility of people and commodities, goods can be availed to any region from all