UK Government Uses System Dynamics to Forecast Employment Impact

The Urban Dynamic Model (UDM) is a simulation of how transport interacts with population, employment and land-use over long periods of time, typically ten years or more. It was developed to help understand how transport could contribute to economic regeneration by improving the ability of employers to recruit a workforce and their access to customers and suppliers, and by improving access to employment opportunities.
For example, the vicious circle of congestion is familiar to us all but is almost impossible to capture in traditional models. In short, the cycle includes improved transport which reduces travel time, making businesses easier to access for customers, generating increased employment, leading to more transport activity and increased congestion.

The UDM was developed over a number of years, beginning with a fairly simple model built in 2000. This was used in one of a series of large scale transport studies commissioned by the government at the time. Its role at that time was to test the regeneration claims being made for a proposed by-pass that would have passed through an area of outstanding natural beauty. Models of this type must be able to represent the spatial characteristics of the study area, usually using a zone structure, and the road and public transport links connecting the zones together. Other applications followed, and then in 2005 we were commissioned by the Department for transport to carry out a study into the impact of transport on business location decisions. Current guidance from the Department for Transport emphasises the wider role of transport in supporting the economy, but also points to the need for reducing carbon dioxide emissions.

The UDM is generic, and has been applied widely in the UK with local authorities. Conclusions vary from one application to another, but some of the findings we have reported include measures to generate employment can appear to have a significant effect if examined very locally, but we often find that some employment is transferred from elsewhere, and the net effect can be less than might first appear, city centres remain the best locations for many types of employer because they provide the best access to a workforce and bring ‘agglomeration’ benefits that employers enjoy by being clustered together. Studies of major programmes of transport investment typically involve expenditure of tens or hundreds of millions of pounds. The measured benefits are usually expressed in money, and expressing both the social and economic impacts of investment and can also run to hundreds of millions of pounds.

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