Enterprise zones: Current planning efforts by state and local governments in New Jersey

In light of the 1980s high unemployment rates, lack of investment capital, crumbling infrastructure in central cities, state and local governments applied the Enterprise Zone concept to stimulate any type of economic growth. What makes an enterprise zone unique is that it is a mechanism that centers on providing development incentives in usually small geographical areas with severe economic difficulties. This study examines the enterprise zone program in the state of New Jersey which provides a package of incentives to attract businesses into targeted urban areas.; To understand the impact of the program and factors that influence the success of the program in areas considered to be economically depressed, the study focused on selected cases to determine whether there were pre-and-post enterprise zone improvements and how incentives and other variables influence the number of businesses in the enterprise zones. A structural model analysis was undertaken to assess the relationship between investment and improvement in local economic conditions. Finally, case studies, using a qualitative approach, were undertaken to identify factors that influence the success of the enterprise zones.; Through the matched t-test and multiple regression analyses, and the LISREL 8 structural modeling, the study found that the enterprise zone program has had an impact within central cities in the program. Though the level of impact varies from zone to zone, socioeconomic conditions have improved as a result of the program. Additionally, the case studies revealed that the level of success was the result of factors such as administration, zone strategy, financial packages and business participation. Zone coordinators' active focus on the four factors has played a major role in propelling the success of individual zones. This study shows the effectiveness of the enterprise zone program when properly managed by an active team of political leaders, zone coordinator and staff businesses and individuals within the community. Thus, this study has provided an effective direction for the development and management of the enterprise zone program.