An enterprise zone is a defined geographic area that has become the focus of an organized effort to revitalize the economy within that area. The idea is to target an urban, suburban or rural area that has undergone economic distress and create incentives that bring jobs back to the area and aid in increasing the standard of living for those who reside in that area. An enterprise zone may be created and managed as a national or federal project, or be managed by a state or provincial government. In some cases, even a county or parish may take on this type of economic project as a means of revitalizing a small town or rural area.
There are typically two strategies that form the basis for the revitalization of any enterprise zone. One has to do with taxes that apply in the defined geographic area. Often, businesses that are willing to relocate to the distressed area and create job opportunities for local citizens are provided with various types of tax credits and tax deductions that can be claimed once the operation is up and running. In some cases, financing to aid in the establishment of those new businesses is also arranged as part of the revitalization process.
There are also examples of federal and state level revitalization operations providing some type of job retraining to individuals living in a designated enterprise zone. This can often aid workers displaced by the closure of other types of businesses prepare to work in the new industries moving into the area. For example, individuals who formerly worked in a textile plant may receive training that helps them develop the skills to work in service companies that are moving into the area. This approach benefits everyone involved, since it decreases the time and resources employers must spend in training new hires, and it provides local citizens with the ability to successfully and confidently become part of a different industry.
The time frame for engaging in economic revitalization in a given enterprise zone will vary. The level of economic distress present in the zone will directly impact the strategies used to reverse negative trends and get the local economy back on track. Emerging national economic trends that could help or hinder the efforts are also taken into account. In some cases, this process may require a short period of time, possibly no more than a few years. At other times, the work within an enterprise zone may require ten or more years before the full benefits of the efforts are evident.
