Assisted Areas and Enterprise Zones

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Regenerating Industry
Assisted Areas and Enterprise Zones

• Linkages and Multiplier Effects cause employment
  growth and development.

• Employment change affects the economic and social
  health of a region.
• Refer to Page 568 and 569 in Integrated

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Assisted Areas and Enterprise Zones
BACKGROUND

• Since the 1940s in the UK, governments have tried
  to encourage industry to move to the areas which
  have had the highest unemployment through several
  varied methods
• the introduction of IDCs (Industrial Development
  Certificates) in 1947 which state where an
  industry can locate.
• Building of newtowns to create opportunities for
  employment.
• Decentralisation of several government offices
  from London to other parts of the country (for
  instance, the DVLA moved to Swansea).

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What is changing and why?

• The fact is that industry is not a static
  enterprise but that it is a dynamic feature of
  the landscape. In fact the current trends at the
  minute are for industries in the UK to close and
  loose out to cheaper but similar operations in
  LEDC countries. Industry is shifting on a global
  scale.

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Assisted Areas and Enterprise Zones
BACKGROUND

• Building of roads and improving communications
  links.
• Subsidising industries that would otherwise go
  bankrupt.
• Retraining and job creation schemes, such as the
  Youth Training Scheme (YTS), Employment Training
  (ET) and 'New Deal'.
• Seeking assistance from the European Union.
• Assisted areas and enterprise zones.

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Assisted Areas and Enterprise Zones
KEY 1. Invergordon2. Tayside3. Clydebank4.
Londonderry5. Belfast6. Workington7.
Tyneside8. Hartlepool9. Middlesborough
19. Swansea20. Telford21. Dudley22. Corby23.
Wellingborough24. Isle of Dogs25. North West
Kent
10. North East Lancs11. Salford12. Glanford13.
Scunthorpe14. Wakefield15. Rotherham16.
Speke17. Delyn18. Milford Haven
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What are Assisted Areas?

• Areas that were designated to have been locked in
  the spiral of decline or had high unemployment
  for a long time were mapped and these became
  'Assisted Areas'. This meant that
• government offered financial assistance to those
  companies willing to set up their businesses
  there
• Communications were improved
• industrial estates built
• financial schemes set up to encourage industry to
  move or set up in the assisted areas.

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What are Enterprise Zones?
These were set up to focus the location of
industry on two particular areas within the
assisted area map (and in areas not directly
covered, such as London)

• old inner city areas where factories had closed
  and there was a lot of derelict land with high
  unemployment.
• towns which had relied on one major industry and
  which had closed.

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What are Enterprise Zones?

• Financial inducements offered were
• rate and rent free buildings for up to 10 years.
• grants for machinery and materials.
• the need for an IDC was revoked.
• money given to companies (up to 3000) for every
  job created.
• planning applications for companies wishing to
  locate in these areas were given priority.
• permission for expansion, construction and
  improvements of industrial premises given
  immediately.

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The Theory Behind Regeneration
Linkages and the Multiplier Effect
Linkages and multiplier effects are used to
explain the relationships between industry and
the creation of wealth in an area. Linkages
describe the relationships between industries,
and the multiplier effect increases the amount of
industries in an area (using linkages) to create
more jobs and hence wealth and the overall image
of an area. The multiplier effect can be
described as the opposite of the 'spiral of
decline', where industries move away, creating
high unemployment and social deprivation and
crime.
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• Industrial linkages may result in
• Energy saving
• Reducing transport costs
• Waste products from one industry to another
• Energy from one process fuels another
• Economies of scale
• Improved communications
• Higher levels of skills and research
• Stronger political bargaining position

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Linkages
Vertical linkage the Burger industry
Vertical linkage is when one industry controls
all stages in the production line. If a burger
industry was to set up in an area, it would
attract other industries to the area, such as the
processing and packaging companies - the amount
of those industries would depend on the success
of the controlling industry.
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Linkages
Horizontal linkage the Car industry
Where one industry is supplied by many others.
An example of this is the car industry - one
which many governments try hard to encourage. The
reason for this is that the sheer amount of parts
that go into a car means that there are probably
hundreds of industries involved in manufacturing
parts that are then assembled in the car factory.
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Linkages
Diagonal linkage the Telephone industry
Where one industry supplies many others. If a
telephone manufacturing industry were to set up
in an area, it will attract industries that
supply other industries, such as those companies
which supply carphones, school and office
telephone network systems and domestic telephone
supply companies.
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The Multiplier effect

• Success breeds success Gunnar Myrdal
• Patterns of regions of experience (Ulster and
  Linen, Wales and Steel etc)
• Development of Growth Poles leads to
  agglomeration and increase of profit.
• Other areas become periphery and experience
  backwash effects (eg job losses)
• Creation of government policies stimulates this
  effect

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Multiplier Effect
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Regenerating Industry
Assisted Areas and Enterprise Zones

• Linkages and Multiplier Effects cause employment
  growth and development.

• Employment change affects the economic and social
  health of a region.