Governing for Success: Reviewing the Evidence on Enterprise Zones

Enterprise Zones have proved to be an enduring feature of local economic development policy in the United Kingdom. Evidence on the achievements of previous zone policy suggests that it can provide a significant boost to the process of regeneration in local areas. It does this by increasing confidence, enhancing the rate of economic return and facilitating new property and infrastructure. It can be a powerful tool with which to market and focus attention on an area but if the benefits to local growth are to be maximised there are some clear lessons from experience elsewhere.

Successful development is about playing to the longer term and recognising the opportunities that zone designation provides in assisting an area to restructure its economic base and market its economic opportunities. Zone policy has to be delivered as part of a wider economic development package that recognises the interactions between the zone and the wider local economy of which it is a part. Success requires those managing the zone to bring the private sector together with those agencies and parts of government that can provide the key inputs required for strong land-use development, particularly as they relate to infrastructure.

The development strategy should recognise which are the most appropriate sectors and companies that should be attracted to build the areas long-term competitive advantage and where ever possible, maximise additionality and minimise the displacement of economic activity in the area. It should identify the critical barriers inhibiting the growth of the zone and how they could be overcome and ensure that physical land use development is delivered alongside the delivery of a wider business support package to the companies that locate on the zone. Marketing the zone to the wider world is important and recognising the value of a joined-up approach to promotion and avoiding fragmented delivery. There is a powerful role for monitoring and eventually evaluation to chart progress and ensure that those responsible for the development of the zone could react in a timely and effective manner to changing economic circumstances.

The current governance model for Welsh enterprise zones has established a firm base on which to build but it is now necessary to consider what might be the most appropriate way of taking their governance forward. As the zones differ considerably in the opportunities and constraints that they face, the models chosen should be such as to ensure that the right partners are involved and that they have access to the resources required to ensure success.