Technological Change in Transportation in Eastern Europe

The transportation system is not merely a carrier of goods and persons. One of its functions is to induce, spread, and facilitate the absorption of technological progress. Like any other industrial sector, transportation itself is also absorbing technological progress in order to lower unit costs, increase its markets and revenues, possibly increase its profit margin or the rate of its financial accumulation, reduce its requirements upon productive resources--and especially upon labor--and improve the services rendered to other sectors of the economy. In the physical sense, goods--and particularly capital goods--that embody technological innovations are transported to new areas to contribute to the raising of productivity. In the psychological sense, the means of transport by being highly visible provide the demonstration effect, an awareness of the existence of new technologies, and the incentive to emulate them, to work for them, and to strive for the material benefits promised by them. Transport can be, therefore, considered a carrier of progress as much as are the communications media. It is no accident that, historically, the Industrial Revolution in Great Britain, and later in other countries, was accompanied by significant technological improvements in transport: the railroad, the iron ship, and the steam ship.