A modern industrial strategy

A What Works Centre post I thought would be good here. Written with Henry Overman.

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Much has already been written on the UK Government’s Industrial Strategy Green Paper. This post isn’t intended to provide an overall assessment or spell out our individual views on the approach being set out (they differ, depending on which of us you ask). But there are areas where the proposed strategy will shape the work that we’ll do at the Centre and where we also hope that our work will influence the implementation of the eventual strategy.

[Full disclosure – the Centre is cited in the document as one of the institutions the Government hopes will help improve local economic growth.]

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The first area relates to what we do and don’t know about policy effectiveness, particularly when it comes to some of the Strategy’s 10 pillars – which are a mix of tech (science, research and innovation) cross-cutting (skills, infrastructure, supporting business growth, procurement, trade and inward investment) and sector (new sector deals, clean energy). Academics would call this a ‘matrix’ approach.

Take, for example, policy to support business to start and grow. We know that there are market failures here – entrepreneurs often make avoidable mistakes, which better information could help fix; many young firms need better access to early stage finance (the Green Paper talks about ‘patient capital’).

The crucial question is: what’s the right policy mix to help address these challenges? Our evidence reviews on business support and on access to finance suggest that around half of schemes have measurable impact against policy objectives but around half don’t. Our reviews and associated toolkits start to identify the elements that might go in to the design of a more effective set of interventions. And we’ll soon be publishing more toolkits on incubators, accelerators and science parks. All this material provides guidance on how we might improve support to businesses but major challenges remain – both in terms of gaps in our understanding and embedding the evidence in policy development.

We are in a similar position when it comes to policy to develop skills. We know quite a lot – see, for example our evidence reviews on employment support and apprenticeships and our toolkit on training (soon to be supplemented by a toolkit on apprenticeships). Changes to policy design can improve effectiveness but, once again, there are gaps in our knowledge and challenges in implementation.

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Things are more complicated when it comes to investing in science and promoting innovation. We can say something about the specific policy tools – e.g. from our evidence reviews we know that both R&D grants and tax credits drive up innovative activity. But it’s not so clear whether increased innovation at the firm level feeds in to improved local economic performance and there are lots of unanswered questions about the appropriate policy mix. That ambiguity is one of the reasons why people advocate such different approaches to strategy.

In the interests of openness – we should note that one of the things our review did find was that grants and loans programmes that target particular production sectors appear to do slightly worse in terms of increasing R&D expenditure and innovation, compared to those that are ‘sector neutral’. So, while it makes sense for government to recognise that different sectors might need different policy responses (e.g. in terms of the institutional structure that supports those sectors) this might increase the challenge of effective policy implementation in some of the other policy areas.

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Questions of infrastructure are similarly challenging. The evidence that we do have on the link from transport to local economic growth raises some questions about the effectiveness of these policies for turning around areas that are struggling. But at the same time, we know that such investments can help drive growth in areas where travel times and congestion are a big issue (and not all of those areas are in London and the South East). Getting the right balance will be crucial.

As with innovation expenditure, people are willing to advocate for very different approaches – particularly when it comes to the overall pattern of expenditure. We’ll continue to make the case that focussing on the overall pattern of expenditure isn’t helpful when it comes to shaping effective policies. What we need is a better understanding of the economic impact of different schemes and improved ways of feeding this information back in to decisions about scheme prioritisation. This will be where our work will focus in the coming years.

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We could make similar points about the other pillars, but in the interest of space, let’s turn instead to a final cross cutting issue – whatever happens we think that to be successful, industrial policy will need to be inherently experimental. How we deliver and develop the policy will matter a lot.

Industrial strategy is always going to involve unknowns. Most fundamentally, because it involves funding basic science (or commercialising new ideas) – not all of which are going to work out, so wouldn’t be delivered by the market. In other cases, investments will trigger spillovers between parts of the economy that are hard to see upfront.

Finally, unknowns crop up because – for a lot of the things Governments want to do as part of industrial strategy – we still have a long way to go in understanding what is an effective policy mix. In addition to the policy areas covered above, at least three of the Pillars – strategic procurement, innovative place strategies, and institutions – are subject to big knowledge gaps in terms of what works. As a result, how we implement future industrial strategy will be crucial.

As you might expect, we will be arguing for an experimental approach. We need to test lots of different ideas, figure out what works, scale up the things that do and drop those that don’t. Many of those calling for a more interventionist policy – such as Harvard’s Dani Rodrik – have consistently emphasised this point. Many people have argued that the Green Paper’s approach isn’t such a fundamental break with the past. But a greater focus on flexibility, on experimentation, and on testing and improving, would help differentiate this from the past and increase the chances of success where so many other strategies have failed.

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Originally posted here on 27 January.

What Works

As some of you will know, LSE, the Centre for Cities and Arup will be running the new What Works Centre on local economic growth.

The Centre will conduct systematic reviews of UK and international research, ranking the most effective interventions, and will work closely with local government, local enterprise partnerships and other ‘users’ to help develop stronger economic policymaking across the UK. As NICE and the EEF already do, it may eventually commission research too.

The Centre has just begun work – we had a great workshop today with a number of our local partners – and we’ll formally launch later in the Autumn. We’ll be part of a network of six working on health, education, ageing, crime reduction and early intervention as well as local economies.

Henry Overman is stepping down from SERC to lead the Centre. I’m becoming one of the Deputy Directors, and will be working at LSE alongside my research-focused role at NIESR. I’ll be leading on the academic workstream, co-ordinating the systematic reviews and demonstrator projects, as well as advising Henry on the Centre’s direction.

We’ll be working with a strong team of academics across the country – in Liverpool, Leeds, Newcastle and Bristol, as well as London. We’ll also team up with New Economy Manchester on capacity-building and demonstrator projects. And we’ll be using the UK-wide networks developed by Centre for Cities and Arup.

Developing a new organisation from scratch is exciting, challenging and a huge amount of work, as I can attest from my early days at the Centre for Cities. Unlike most start-ups, we are very lucky to have secure initial funding. And we have an emerging body of good practice to draw on. But we still have a great deal to do in the months ahead. I look forward to working with many of you as we build out.

High Speed Two, cities and the North-South divide

The Government has just unveiled the route map for the UK’s high speed rail network. So will HS2 help the cities on the line? Will it narrow the North-South divide, as some Ministers claim? And what about places left out?

Here’s what I wrote back in 2010, when the detailed modelling was done, and drawing on the international evidence. The punchlines are:

So what does HS2 mean for cities? Urban firms and travellers are the big winners, which is good news for cities if more productive businesses raise wages or employment. Some cities get the kudos of being on the line, and may get a regeneration boost from new stations – although that could turn into a windfall gain for developers. But fairly few firms will relocate, and agglomeration impacts will be pretty small.

On this basis, HS2 isn’t likely to fundamentally change the UK’s economic geography. Rather, it will speed up the economic geography we already have.

… Those who gain from HS2 (business, core cities, those in ‘the North’) are strongly in favour; those who lose (communities and homeowners along the line) are vehemently against. Local opponents of HS2 are hardly irrational – quite the opposite. So rather than handing a windfall gain to business by pegging HS2 fares to conventional fares, HS2 tickets should be pricier – at least in first class.  That provides another way for taxpayers to recoup some of the initial outlay. … The agglomeration benefits for Phase 2 (Manchester and Leeds) seem much larger than Phase 1 (London to Birmingham). Why? Rather than connecting two relatively distant cities, Phase 2 links a lot of nearby places (e.g. Sheffield/Meadowhall to Leeds in 20 mins), and provides indirect access to big cities not on the line (e.g. from Manchester to Liverpool). The fact of HS2 thus strengthens the case for complementary investments like the Northern Hub, which will bring Liverpool, Manchester, Sheffield and Leeds closer together.

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Two other points. First, as John Tomaney argued on radio 4 this morning, the evidence suggests HS2’s economic impacts are pretty complex, and the net effect isn’t clear. Like him and others, I’m basically an agnostic.

Second,  to repeat – it’s crucial to spend money on better links between Northern cities and more London-centric high speed lines. As Richard Leese suggested in the same piece, for policymakers this is not an either/or. Thankfully Ministers agree, and are feeding cash into boring but important investments like the Northern Hub, as well as the bigger and shinier HS2.

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Update, May 2013: The National Audit Office has published its own report, which echoes many of these points.

Facetime limited

What’s on sale here? Will Davies and I both have been puzzling over this ad on the Tube. Will’s worried about the politics of ‘facetime’, but I think there’s a more basic problem.

I can see the point of putting this ad up in (say) Barrow-in-Furness, or in the middle of the countryside. But if ‘facetime’ is the commodity, why offer Londoners access to 400 million people, when they can reach several times that number in the capital itself?

I would have thought that Birmingham’s comparative advantage in ‘facetime’ (or dynamic agglomeration-derived proximity benefits, to be precise) has to be usability, not quantity.

Core cities like Birmingham offer a good balance between size, speed and access. For the businesses targeted here, Brum has pretty good infrastructure, amenities and markets – but is also easy to navigate. Isn’t that the selling point?

London might be a megacity, but it also has to be one of the least usable and most frustrating places in the UK to travel around – as anyone stuck on underground reading this ad would realise …

On yer Boris Bike

Who actually uses Boris Bikes? Commuters, civil servants and city types. Who doesn’t? Shoppers and posh people. That’s the story so far, as suggested by data from the London Cycle Hire Explorer – flagged in Londonist, and recycled in Wednesday’s Evening Standard.

The Explorer app is simple but powerful: it shows the 10 most and least popular docking stations across the capital. Obviously it’s early days, and usage will change (see below). And I’m just eyeballing the data – no fancy analysis here. First impressions:

1) Commuters are the main users – the most popular spots are mainly around the major stations – Waterloo (354 bikes yesterday), King’s Cross (305), London Bridge (256) and Liverpool Street (226). This is why TfL already wants to spend another £81m on new bikes and docking stations.

2) Biking to meetings and running errands also seem popular – viz heavy daytime (and lunchtime) use during the week in Covent Garden, (196) Strand (189) and Fitzrovia (187).

3) Weekend biking is on – judging by the past week at least, there’s no obvious drop-off on Saturdays or Sundays in the most popular spots. That suggests some tourists might be venturing out too.

4) There’s a bit of an East/West divide – six of the least popular docking stations are in West London, mainly Kensington (28 bikes) and Chelsea (25-29). I would have expected some use around Paddington and White City, but perhaps the Westway is putting people off. Support for scary road theory comes from other cold spots around Elephant and New Kent Road (26 each).

5) Alternatively, bike use is low in well-off neighbourhoods where residents prefer to drive, such as Kensington and Chelsea, Bayswater (27) and St John’s Wood (20). Or where serious shopping is going on (all of the above).  Obviously that’s just postcode stereotyping, but still – I bet there’s something in it.

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The open data is incredibly helpful, and not just for urbanists. At one level the bike scheme is a gigantic social experiment – give people new tools for getting around the city, step back and see what happens.

There are useful parallels here with new technologies, especially portable gear like mobile phones. The lesson from these is that technology changes us, but we change it too, and unpredictably. In the jargon, use is endogenous to the user.  Texting is the classic example of user-driven innovation for mobiles: open platforms like Android are doing something similar for smartphones.

A lot of this happens through experimenting and messing about, and this is already happening with blue bikes – via mashups like the Explorer, or Barley-ish attempts at stunt riding. More interesting stuff is bubbling up at this user forum.

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In turn, that suggests Boris Bike dynamics might look very different in a year’s time. So far, riders are currently making 19,000 journeys per day, not put off by bikes variously described as ‘like flying Ryanair’ (Jon Snow) and ‘like driving a tractor’ (anonymous friend).

That number could rocket up when Pay as You Go rates are introduced, and the early adopters are joined by loads of tourists and casual users. We could see new hotspots around St James’ Park, Baker Street and Tower Hill. And even bike snobs like me might get round to trying the thing …

High Speed Two: what’s in it for cities?

Originally posted March 2010, updates Jan 2012 and Jan 2013.

It won’t be here for another 15 years, but HS2 has triggered a mass outbreak of trainspottery enthusiasm. The Guardian even live-blogged Andrew Adonis and Sadiq Khan’s announcements, for goodness’ sake.   The big issues last week were route, timing and cost – so I want to focus on impacts, particularly for cities. I’m not sure these will be all they’re cracked to be.

Dermot has helpfully summarised HS2 and the Conservatives’ plans, and R&R round up the reaction here. It’s all fairly positive (although the headline numbers don’t add up – £30bn over 20 years is £1.5bn per year, not the £2bn quoted by DfT). All the positivity explains why the Conservatives feel they need separate proposals – more on those later.

Let’s take environmental impacts first. HS2 is being pushed as green infrastructure. But as Henry points out, the CO2 impact of the line isn’t at all clear: it could take reduce emissions by -0.41m tonnes, or raise them by about the same amount. This is a pretty small fraction of total UK emissions, and doesn’t seem to significantly change the overall cost-benefit ratio. However, the lack of certainty is a worry – and dents the line’s green image.

There’s more detail on the economic impacts (summarised above). The bulk of the benefits accrue to individual travellers and firms via time savings, which feed into productivity gains at the national level. Time savings also help increase competition between firms.  Labour market impacts are much smaller – it’s unlikely HS2 will dramatically change commuting patterns, for example.

In theory transport improvements boost urban agglomeration – and thus productivity – by improving linkages between firms, and between firms and workers. By bringing agents closer together, we improve cities’ ‘effective density’. HS2 modelling suggests that for North-South high speed rail, these impacts are pretty small – £3.6bn over 60 years, just over 10% of the overall benefits of the line.

This is partly because HS2 doesn’t connect anywhere that’s not already on the rail network. By contrast, SERC’s research suggests that plugging new cities into high-speed infrastructure delivers a bigger charge to output.

So what does HS2 mean for cities? Urban firms and travellers are the big winners, which is good news for cities if more productive businesses raise wages or employment. Some cities get the kudos of being on the line, and may get a regeneration boost from new stations – although that could turn into a windfall gain for developers. But fairly few firms will relocate, and agglomeration impacts will be pretty small.

On this basis, HS2 isn’t likely to fundamentally change the UK’s economic geography. Rather, it will speed up the economic geography we already have.

Two final points. First, for Northern cities, the big agglomeration gains will come from speeding up links into urban cores, or bntter connections between nearby cities like Manchester and Leeds. This is the message of the Eddington Report, and it’s important it doesn’t get lost.

Second, the final shape of HS2 may look quite different. Last week’s report also did some preliminary modelling of high speed lines to Scotland – much closer to the Conservative proposals. While there’s a ‘good case’ for a high speed link to Manchester, the early numbers suggest a ‘particularly strong’ case for lines to Leeds and the East Coast of Scotland. That implies a cash-strapped future government might want to choose between two halves of the Y – a very tough political choice indeed.

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Update, Jan 2012: the Coalition has now given HS2 the green light. It’s also published some updated cost-benefit modelling. Three things stand out from this.

First, my analysis holds. The overall shape of benefits and costs is the same, although the recession and higher building costs have changed some of the numbers slightly. See page 10 for the new figures.

Second, the modelling almost perfectly explains the politics. Those who gain from HS2 (business, core cities, those in ‘the North’) are strongly in favour; those who lose (communities and homeowners along the line) are vehemently against. Local opponents of HS2 are hardly irrational – quite the opposite. This also suggests that rather than handing a windfall gain to business by pegging HS2 fares to conventional fares, HS2 tickets should be pricier – at least in first class.  That provides another way for taxpayers to recoup some of the initial outlay.

Third, the agglomeration benefits for Phase 2 (Manchester and Leeds) seem much larger than Phase 1 (London to Birmingham). Why? Rather than connecting two relatively distant cities, Phase 2 links a lot of nearby places (e.g. Sheffield/Meadowhall to Leeds in 20 mins), and provides indirect access to big cities not on the line (e.g. from Manchester to Liverpool). The fact of HS2 thus strengthens the case for complementary investments like the Northern Hub, which will bring Liverpool, Manchester, Sheffield and Leeds closer together.

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Update, Jan 2013: we now have the detailed route maps for the full Y network. Note that these are ‘preferred routes’ – a lot of other cities (e.g. Liverpool, Warrington) are now going to push hard to be included. And it’s still possible that the two legal challenges may change the network shape, as well as slow down implementation.

Green cities, green jobs

Green jobs are hot. All three political parties want to shift Britain onto a low-carbon growth path. It’s a powerful meme. Two questions, then: what are green jobs? And where will they be? My guess is: mostly quite boring. But they will be everywhere, and they will be a big deal for towns and cities.

So what are ‘green jobs’? ippr’s new report suggests that ‘all jobs should be green’ in future. I’m not sure. Let’s focus on activities with the biggest carbon footprint: energy, waste, transport and construction. Some jobs in other sectors can be greened too, say if manufacturers adopt more sustainable workflows.

Where will green jobs be? To answer that, we need to consider how the UK moves onto a greener growth trajectory. There are two basic approaches, impling different roles for government – and different levels of political engagement.

Let’s call the first the Green Industries approach. This is about increasing the UK’s global share of high-value green activity – like wind turbines and low-carbon vehicles. It also encompasses major infrastructure like high-speed rail. National Government holds the policy levers: public money, tax breaks, business support (and to an extent, picking winners).

The second approach we could call Green Places. This is about making towns, cities and households more sustainable. The focus is on non-traded activities: buildings, energy and waste systems, local public transport – and things like repairing windmills on roofs.

Local government has a critical role here, alongside Whitehall: via recycling, local planning standards (like the Merton Rule), procurement and PPPs (like the ESCOs in Woking and Birmingham). Whitehall matters behind the scenes – for example, through DECC’s new Feed-In Tariff rules.

Green Industries are the sexy, photogenic things politicians get excited about, and are the focus of Labour’s Low Carbon Industrial Strategy, the Conservatives’ ‘Marine Energy Parks’ idea, and the Lib Dems’ green growth plans. Interestingly, the Tories seem keener on Green Places than Labour – see proposals for a ‘green deal’ for households, and support for micro-generation.

My guess is that Green Industries, though exciting, will only take the UK so far. First, only a few places will have them. The range of green technologies is vast. With no global standards, potential for international growth is capped. Most importantly, geographies of innovation, production and sales already differ. Silicon Valley leads the US in ‘cleantech’ R&D – but large-scale manufacturing is already shifting from the US to China and other cheap locations.

Second, the UK is already lagging. In wind turbines – where Britain should be a leader – the top firms are German and Scandinavian. (From this perspective, one of the saddest things about last year’s Vesta dispute is that Vesta is Danish).

Third, policy options are pretty limited. Green industries in the US are supported by Government stimulus money and a massive VC sector. Other European governments have funded producers for years. Britain has plenty of strategy, but limited cash to back these up. Low Carbon Economic Areas have no funding attached, and rely on existing RDA / LA budgets plus local ingenuity. The experience of Science Cities, a similar approach, doesn’t get my hopes up.

The Green Places approach is much more prosaic, but will have bigger impacts on more people. Cities’ carbon footprint is large: the C40 group estimates that worldwide, urban areas represent around 75% of the world’s energy use and CO2 emissions. Fiscally, Green Places largely involves redirecting existing budgets. (Some costs are passed on to firms and households – but councils should be allowed to use tools like TIF to ease financing constraints.)

Finally, British local government is already on the case. The Merton Rule is a classic example of how local policy innovation has shaped national thinking. Woking is a leader in decentralised energy. And Greater Manchester’s LCEA proposals look pretty good, with a five-year retrofit programme, small-scale renewables and smart meters for thousands of households across the city.

The UK needs both green industries and green places. But let’s not get over-excited about the first, while underplaying the second. Green jobs might be more dull than we thought. But they’re important as ever.

The economics of high-speed rail

Notebook and Thermos time again. Last week’s slightly weird dust-up between Andrew Adonis and Theresa Villiers highlights two things. First, how tortured the politics of high speed rail are becoming. Second, how murky the concrete costs and benefits remain.

Politically, a fast North-South line should be a done deal. Both main parties want it – but for different reasons, and probably going different places. HS2 is also getting entangled in highly sensitive planning questions, especially for the Conservatives. The Tories want a highly localised, ‘open source’ planning system – but also, room for nationally-driven infrastructure that goes straight through various safe seats.

As with the Channel Tunnel, a surprising number of people are desperate to get away from major investments designed to make their lives easier. (In California, by contrast, one of the main problems facing High Speed Rail proposals is that everyone wants to be on the line.)

We’re still not much clearer on what will actually deliver, economically and environmentally (something I complained about in a previous post). Happily, SERC has just published a new paper [pdf] which gives us some pointers.

The researchers look at the economic impacts of the Frankfurt-Cologne ICE line: 120 miles long, about the same distance as London to Birmingham. In theory, better links between cities bring people closer together, raising their productivity. The researchers isolate this effect by concentrating on new stations with no prior rail links. They find a 1% increase in market access raised GDP by 0.25% around towns on the line. These effects were highly localised, dropping off within about 30 minutes’ drive time.

Importantly, the research suggests these benefits are probably permanent – putting in a new rail line changes the underlying connectivity of the area, which then shifts firms’ and households’ location decisions.

Overall, the authors suggest that HSR both delivers significant additional economic benefit. And it’s good value for money – if gains are permanent, there should be big future fiscal payoffs from higher tax receipts.

That still leaves some big policy questions:

1) The SERC work only looks 4-5 years post-investment – so we don’t know what the really long term impacts of HSR will be (papers like this take a deeper view).

2) We also don’t know impacts for big, well-connected cities. If they are the major gainers from connectivity improvements, HS2’s impact on spatial disparities may be limited.

3) It’s hard to say whether people will switch from planes to faster trains (a modal shift) or use more of both. The answer makes a big difference to the environmental footprint of high speed rail.

4) How to actually fund and deliver the thing.

I’m sure we’ll get answers to some of this when the Government eventually publishes the HS2 report and its own ideas – both of which will be appearing, according to the Transport Minister, ‘before the election’. At which point we can settle down to round 2 of Adonis vs Villiers …

High speed train-spotting

California is the same size as the UK, but its public transport network is a lot worse. So perhaps it’s not surprising that High Speed Rail is a big deal here. What’s more surprising is how similar the debates seem to be turning out.

The California proposals seem further ahead than High Speed Two. In both cases there’s strong political support. Ex-Hummer driver Arnie is less evangelical than Lord Adonis, but he has put up serious money to push things forward. The California High Speed Rail Authority has a definite route, a start date – 2012 – and a slick website with impressive 3d fly-throughs. Meanwhile, the austere HS2 team is still ‘weighing high speed rail’s benefits against costs’, and only ‘where existing capacity is likely to be most constrained’. Set against Golden State optimism, it’s almost a parody of British bureaucratic restraint.

But elsewhere, there are clear parallels. First, how to pay for the thing? Both Labour and Conservatives will make high speed rail a manifesto pledge. But with the UK down £26bn a year, £34bn-worth of bullet trains seems a far-off prospect. California’s trainline is projected to cost a similar $45bn (£29bn). So far the State has committed about $10bn via a bond issue. Sacramento is now bidding for $4.5bn of Federal stimulus money: with matching local funds, that takes California towards the halfway mark. But it’s still nowhere near enough – something no-one seems that keen to talk about.

Second, the real costs of both projects will be much larger. None of these figures appear to factor in optimism bias, the tendency to under-estimate the costs of major projects, which suggests the true numbers could be two thirds as higher again.

Third, who’s on the line? California’s planners have made everyone happy by including almost every major settlement on the route, from Sacramento down to San Diego. But some stops could get chopped in future budget cuts – in which case, expect similar reactions like those in Newcastle recently.

Finally, who gains? The California plans emphasise the environmental benefits of HSR – reducing pollution and congestion. Economic benefits are almost an afterthought – apart from 400,000-odd construction opportunities, cutting congestion will improve productivity, ‘creating and sustaining high skilled jobs’. But it’s unclear how this will happen, or where these jobs will go.

Urban economics can help here. We now have robust techniques for modelling the full economic impacts of transport investments. These suggest that direct benefits from time-saving and reduced congestion are actually fairly small, and may not offset build costs. But new infrastructure also brings more people into cities, increasing the effective density of urban labour markets. This pushes up labour productivity, which in turn raises wages and helps employment growth.

As Henry points out, the environmental benefits of high speed rail are not that clear-cut. A modal shift from cars or planes could cut CO2 emissions and congestion, but not if spare landing slots or road capacity are then used for something else.

Unfortunately for both countries, the economic outcomes aren’t clear-cut either. Agglomeration modeling suggests that the major benefits accrue to large urban centres. Cutting travel times by 10% across the UK would raise London’s productivity more than in most Northern cities. So in California, workers in the big urban cores – the Bay Area, San Diego and LA – will probably have most to gain.

In the UK, that calculus suggests some Northern cities might actually be better off investing in local or city-regional links, rather than pushing for high speed rail. Similarly, better connecting Liverpool, Manchester and Leeds might do more for local people than faster links down South. And in California, less glamorous but more useful local infrastructure projects – like extending the BART light rail system from San Francisco to San Jose – might do the job for less.