Compelo - latest news, features and insight on influencers and innovators within business is using cookies

We use them to give you the best experience. If you continue using our website, we'll assume that you are happy to receive all cookies on this website.

ContinueLearn More

High-speed rail – does its economic impact match its breakneck speed?

Britain's HS2 project will be the latest in a long line of high-speed rail networks across the world - but arguments persist over their economic merits

HS2 won’t just put a huge dent in journey times across Britain but is billed by politicians as the key to unlocking the economic potential of the North and Midlands by bringing regional cities closer to London.

With construction work due to start next year and the first trains due to run in 2026, the network will eventually link London, Birmingham, the East Midlands, Leeds and Manchester over two phases.

The Government says it will bring more than £92 billion of benefits and create 25,000 jobs by significantly reducing commuter travel times into big cities and creating closer connections between businesses and their geographically-dispersed employees.

As the name suggests, it will be the UK’s second high-speed rail line, following on from the initial high-speed rail (HSR) line established between London and the Channel Tunnel – a 67-mile railway link operated by Eurostar – in 2003.

But Britain isn’t the only country to adopt high-speed rail links, with the transport mode evident in numerous other countries. Their contributions to the economy, though, remain a source of much debate.

High-speed rail, HS2


Japan bullet train

Commonly known as the origin of high-speed rail, the Japanese Shinkansen system – also known as the bullet train – opened its first service in 1964 between Tokyo and Osaka.

In just three years, more than 100 million passengers had used the trains on Japan’s first HSR line. Its popularity led to two more lines opening over the following decade and, by 1976, more than a billion passengers had used HSR in the country.

Japan’s HSR network continues to grow and improve until this day but a study by Mercatus Center – a research facility based out of George Mason University, Virginia – found that HSR may not have had quite the economically beneficial impact the numbers would suggest.

HSR, High Speed Rail
Japan’s East Shinkasen HSR trains

It found just “six percent of the traffic on the Sanyo Shinkansen was newly generated”, while “55% came from other rail lines, 23% from air, and 16% from intercity buses”.

High-speed rail in China

China’s first line, the Qinhuangdao-Shenyang passenger railway, was opened in 2003.

By 2008, as part of the infrastructure development plan that accompanied the country hosting the Olympic Games, high-speed trains between Beijng and Tainjin were introduced and set the world record for average journey speed at 194.2mph over the 601-mile trip.

The Chinese then set another global record by building the world’s longest HSR line, running 1,372 miles from Beijing in the north to Shenzen in the south.

By 2015, China had just shy of 12,000 miles of HSR lines – about 65% of the world’s total. But this rapid growth hasn’t translated into pure economic prosperity.

While their HSR network grew, China’s domestic airlines waned – forced to cut fares and even cancel some regional flights altogether.

In 2011, some airline services on previously widely used routes – namely Wuhan to Nanjing, Wuhan to Nanchang, Xi’an to Zhengzhou, and Chengdu to Chongqing were shut down altogether.

HSR, High Speed Rail
China’s HSR networks have set multiple world records

High-speed rail in France

The first French HSR line was opened in 1981 and connected Paris and Lyon’s suburbs.

Known as TGV (Train à Grande Vitesse – high speed train), France’s network of high-speed trains now spans 1,532 miles.

While not as prolific or popular as that of Japan or China’s, the French HSR network has become a key mode of transport and a point of national pride.

Yet a recent study by the Banque de France – France’s central bank – found that while its country’s HSR network has clear economic benefits, such as creating jobs, it also “contributes to geographical job polarisation and the clustering of high-skilled jobs in the largest cities.”

The argument follows that a surplus of the best jobs will crop up in Paris because companies will have no need to base themselves near their employees, as the workforce based in regions can reach the capital quickly and easily.

Acknowledging the upcoming HS2 in the UK, the study concluded: “The same phenomenon would most likely occur if London became connected via high-speed rail to the northern part of the country.”


The UK’s second high-speed rail line is estimated to cost £56bn and will transport passengers at speeds of up to 400km/h (250mph).

Two new fleets of trains will run the service – one solely for the HS2 network and another smaller fleet, which will also be compatible with existing train stations in Carlisle, Edinburgh, Glasgow, Liverpool, Newcastle, Preston, Sheffield and York.

HS2 route map

While the first train journeys are scheduled to begin in 2026, phase 2b – connecting Crewe to Manchester and the West Midlands to Leeds – will not be completed until 2033.

Obstacles to the project range from a potential lack of demand and the environmental damage involved with building another national rail line to the potential exacerbating of the north-south divide if HS2 encourages more people based in the regions to commute to the capital for work rather than take jobs in their home cities.

Yet the potential draw of a much shorter commute, as well as increased accessibility for the UK’s biggest city, remains.

It will serve more than 25 stations, connect eight of Britain’s ten largest cities and serve 30 million people – almost half the population.