ECONOMICS

There are many unresolved questions over how investment in improved infrastructure to connect people and places improves the economy and productivity in local areas and regions.

This econometrics research provides indicators vital for government and researchers into how funding spend on infrastructure such as broadband, and road and rail links, helps to generate increased productivity, and to speed up economic growth in local areas, wider regions and nationally.

The UK government has identified investment in infrastructure as core to driving forwards its industrial strategy and emphasised the importance of adopting a place-based approach to infrastructure investment.
Bringing places closer together, through improving underlying infrastructure, to widen and deepen markets and lower input costs is widely recognised as an important supply-side driver of economic growth. But how much does connectivity matter in driving growth?

This research helps to quantify hoped-for enhancements to productivity at local area and nationally and takes into account more data variables, dimensions at more local scale than previously, to allow for more detailed and accurate analysis.

One strand of the research assesses the effect of improvements in the quality of broadband provision on the growth of local business establishments in England over the period 2011 to 2015, using high-resolution geographical panel data.
Another strand investigates the relationship between improved connectivity infrastructure on the growth of local economic output and productivity in Great Britain using both a production function and Total Factor Productivity (TFP) approach. To do this, ITRC researchers created an extensive local area database that includes enhanced indicators of infrastructure and economic factors (including previously unavailable estimates of the local capital stock).