Given that economic growth in many countries in the developed world is still far from robust, it is unsurprising that investors are so insistent on getting the best value for their money. That is one of the reasons why investing in enterprise zones, entities run by local enterprise partnerships (LEPs) in the UK that come with a vast array of pro-business incentives, are so popular, provided that investors can find the right one. In the UK alone there are 24 such zones designated by the country's government.
“Some zones created by LEPs are not ready for investments. If an investor wants to invest [immediately], there are no utilities there, no roads and no planning permission,” says James Newman, chairman of Sheffield City Region LEP. “We did our homework when choosing sites [in Sheffield City Region] and we make sure investors find what they are looking for when they come here.”
Such talk may sound bullish, but the figures back it up. In the past 12 months, Sheffield City Region Enterprise Zone (SCR EZ) has attracted 15 new companies, creating more than 200 new jobs. SCR EZ has also been recognised as the top free zone in the UK, and 37th worldwide, in fDi Magazine's Global Free Zones of the Future 2012/13 ranking.
Companies that move to SCR EZ enjoy numerous benefits, from simplified planning procedures to government grants to install super-fast internet connections. SCR EZ is also one of only seven enterprise zones in the UK that offers both business rate discounts and capital allowances. Investors can receive a business rate discount worth about £275,000 ($418,700) over a five-year period, provided they invest before March 2015 and do so in sectors such as advanced manufacturing, creative and digital industries, healthcare technologies or environmental goods and services.
Additionally, under the UK's Enhanced Capital Allowance Scheme, selected companies settling in SCR EZ can receive a 100% first-year capital allowance if they invest heavily in plants and machinery before 2017.
SCR EZ is made up of a network of sites, which is unusual for the UK, where such zones tend to occupy just one plot of land. All of SCR EZ's sites are linked by the M1 motorway, a north-sound corridor that connects London with the north of the UK. Such proximity to the M1 means that the SCR EZ sites have fast and easy access to other major UK cities such as Birmingham, Edinburgh, Leeds and Manchester. The sites are based around three main hubs: Barnsley, Sheffield/Rotherham and Markham Vale.
Taking into consideration the size and availability of space and the types of businesses already present in these hubs, Barnsley caters best for the needs of small and medium-sized enterprises in the manufacturing sector, Sheffield/Rotherham is a better fit for bigger companies that want to be part of an advanced manufacturing supply chain, as well as R&D projects, and Markham Vale is more targeted at companies that need larger plots of land.
“When investors come to the region we give them a choice and they can pick a place that makes the most strategic sense for them,” says Mr Newman.