Enterprise Zone - blessing or curse?

The subject of Enterprise Zones is the “hot” business topic of the moment with the news that areas within Lowestoft, Beccles and Great Yarmouth have been bestowed with this favoured status in the latest round of Government announcements.

There is no doubt that anything which is designed to support the economy in these areas is to be welcomed, especially given that the focus of this zone is on the vital renewable energy sector which is still in its infant stage.

Before looking at what this could mean for the local economy, we need to go back some 30 years to the first round of Enterprise Zones, which were introduced in the early 1980’s as an answer to the recession which the country was in the grip of following years of industrial decline. Even then the concept was nothing new with the idea first arising in the USA in the late 1960’s. It may surprise many, that both in America and the UK, the principle was invented and espoused by those on the left of the political divide but it required a Conservative government to bring it to reality.

Then, as now, there were financial and planning incentives for companies to locate in these “favoured” areas. However it should be noted that the financial incentives are relatively modest and short term and it would be a very foolish business person who would make a long term location decision based solely upon Enterprise Zone status. What being an EZ can do is remove a barrier for growing and ambitious businesses and speed up the pace of recovery and/or investment into an area.

The real challenge with such temporary incentives is to turn Great Yarmouth and Lowestoft into competitive business locations to both retain and recruit more companies to the area. This will require much more work than simply marketing land with “benefits” attached. It will require a complete change in mindset for politicians, business people and the local workforce to ensure that the benefits are lasting and that the inward investment does not turn into outward losses once the incentives cease.

NWES was itself born in Lowestoft during the era of Enterprise Zones and since 1982 it has helped create over 15000 new businesses and transform the lives of many local people. It is a combination of people and places which breed success and one cannot work without the other. As such the lure of EZ status needs to be coupled with a strong business support structure provided by organisations such as ours, designed to provide companies with the skills to survive and grow at a quicker pace than they would otherwise have done.

It is easy to get carried away with forecasts of job growth – which can often lead to disappointment when they fail to be reached. The evidence of the eighties zones is that of a total of 63000 jobs created only 13000 were new jobs – the remainder merely being displaced from neighbouring areas.

So how can the EZ status provide a long term benefit for the area? A major difference between the current crop of zones and the previous is that each of the areas has based their application upon favouring a particular market segment – in our case renewables. This should avoid the displacement seen in areas such as Dudley which saw farmland transformed into a shopping complex putting many local traders out of business. To cement businesses into the area we need to attract major investment which it is difficult to move and this means infrastructure.

The Local Enterprise Partnership and councils have a task ahead of them which will require them to be fleet of foot and willing to concentrate effort and resource in the EZ, perhaps to the short term detriment of other places and schemes.

-         Planning needs to be overhauled with clear policy for the area available within the next 2-3 months and a guarantee that the planning process will not last more than a few days and weeks for eligible schemes.

-         Where infrastructure is needed it takes priority over ALL other schemes

-         Coherent marketing messages need to be ready within the month and distributed widely to potential interested parties

-         Local businesses need to be properly engaged to avoid short term displacement, negative comment and curtailed investment

-         Workforce training needs to be a priority in the targeted sector of energy

-         A strong economic development team needs to be assembled at short notice drawing far and wide for the very best professionals in the sector

-         A strong business support offering is required to meet skills and funding gaps inhibiting investment

-         The leading lights in the energy sector need to sing the praises of Great Yarmouth and Lowestoft as we will be in direct competition with Humberside for he same investment.

The task has only just begun and all that the EZ status gives us is a head start, but for business that is usually all they need and if we are to avoid the mistakes seen in previous generations we need to grasp the opportunity for this area to be the centre for the UK renewables industry and not lose out to other more entrepreneurial locations as happened with the oil and gas exploration sector in the seventies.

History can act as a useful guide for the future of Great Yarmouth and Lowestoft and there can be no excuses for not taking full advantage of this helping hand to transform the local landscape and finally break the dependant nature of these great towns.

So does an Enterprise Agency really make a difference?

When hosting the judges for the Enterprising Britain Awards we were asked a similar question which encouraged me to do some investigation. NWES was set up to combat the mass redundancies due to the closure of the Pye TV factory in Lowestoft back in 1982. Its successor Sanyo recently closed so where does Lowestoft stand now compared to then?

Looking at the figures for the last few years one can see how the town has performed in comparison to the region and country.

Economically Active – in employment – all people:

Date Number Waveney East England Great Britain

Mar 06 47400 70.6% 77.7% 74.3%

Sep 08 54000 78.3% 77.6% 74.5%

As you can see Waveney has substantially outperformed both the East of England and Great Britain rising from a laggard to being above the national average for economically active people in employment.

Economically Active – Unemployed – all people

Date Number Waveney East England Great Britain

Jan 06 3800 7.3% 4.6% 5.4%

Sep 08 2900 5.1% 4.3% 5.3%

Source: www.nomisweb.co.uk


There is a similar story with the latest unemployed figures; whilst there will always be seasonal fluctuations due to the nature of the area it can be seen that substantial progress has been made, bringing Waveney to below the national average from a position 35% above it some 33 months before.

The most recent figures for those people on Job Seekers Allowance, whilst showing an increase, demonstrate that our policy of job diversification is sheltering Lowestoft from the worst effects of the recession. In the period from January 2008 to May 2009 (latest figures available) Lowestoft has seen a 41% increase in JSA claimants. However in the same period the East of England has seen a 106% rise and Great Britain an 86% rise.

These are impressive results and whilst full employment is always the goal it shows how a policy of diversification and broadening the business base has paid substantial dividends over the years.

Lowestoft with NWES at the helm is now looking to the future positioning itself as the UK base for the rapidly emerging renewables industry - housed at the £10m NWES managed OrbisEnergy. Check out our website for great pictures from the top floor of the most easterly building in Britain!