UK Enterprise Zones and the Attraction of Inward Investment

This paper assesses the contribution of inward investment to economic regeneration in UK Enterprise Zones using survey data from a government-sponsored national evaluation. Results indicate that by providing tax incentives and stimulating infrastructure improvements, policy attracted a group of inward investors that accounted for nearly one-third of employment in the zones at de-designation and a high proportion of new local jobs. The local impacts of inward investors are examined in terms of recruitment, linkages, growth and stability and compared with other establishments in the zones. It is concluded that inward investment can be an important driver of local economic regeneration in distressed areas when stimulated by this type of initiative, but that a mechanism is needed to limit short-distance transfer activity.