Knowledge about the effects of new programmes aimed at supporting local economic development in urban quarters is scarce. The objective of this case study is to carry out a systematic review of the strategies, progress and results of local economic and business development programs in the neighbourhoods eligible for support in conjunction with the “Socially Integrative City” programme in North Rhine-Westphalia (“Soziale Stadt NRW”). This case study focuses on three key strategy goals for local economic development campaigns: 1. Reducing vacancies in local retail properties, 2. Supporting business start-ups, 3. Supporting business networks. This study is an empirical analysis based on six areas involved in the program: Düsseldorf-Flingern/Oberbilk, Duisburg-Marxloh, Gelsenkirchen-Bismarck/Schalke-Nord, Essen-Katernberg, Oberhausen-Knappenviertel and Wuppertal-Ostersbaum. These are all inner-city zones that, in the past, were closely linked with old industries such as coal and steel or textiles. Once their traditional economic base had collapsed, they suffered under unfavourable site factors whenever they attempted to attract new businesses. In the areas selected for the case study municipal offices, usually a part of the town planning departments, are responsible for the overall “Socially Integrative City” programmes. Initiatives comprising local citizens and businesses, however, are deeply involved in the coordination and implementation of local economic development measures. In an assessment of the costs of local economic support, the comparatively low costs of non-investive business-oriented measures (e.g. consulting) become apparent. While triggering relatively modest additional costs, they provide extra impetus that in many cases appears to be a prerequisite for new businesses to take advantage of improved site factors. Upgrading traditional local neighbourhood shopping areas by attracting neighbourhood-oriented retailers or launching urban renewal projects proves to be feasible in areas characterised by relatively affluent residents and stable population figures. This is the case in Düsseldorf, for instance. For neighbourhood centres in districts with low local purchasing power and generally less advantageous conditions it is necessary to design concepts for alternative use of vacant shops – with local businesses, residents and real estate owners participating. One element of such a strategy might be to reduce rental rates for vacant commercial property temporarily, thus stimulating intermediate use (between long-term leases) in order to counteract the appearance of an “abandoned” neighbourhood. The goals of support for business start-ups were met to a large extent in regard of the target groups in the various cities. The projects were of particular benefit to those starting out in business in selected high-competition sectors with relatively low financial and staffing requirements, often with high personal involvement and a weakly developed business network. Those projects which were studied more closely and were aimed at promoting new businesses showed that changes in urban design could bring about a more favourable environment even in those areas which had initially not seemed amenable to new business. This offered the foundation for new business activities. For example, local economic development agencies succeeded in establishing a new bed-and-breakfast trade in the vicinity of the Zeche Zollverein in Essen, a UNESCO World Heritage Site – something unthinkable in this environment just a few years ago. In 1995 parts of the old mining complex, now the World Heritage Site, were converted into a start-up incubator that currently hosts 65 small firms with over 300 employees. They are engaged in various crafts and service trades, mostly in “high-tech sectors”. They provide active support to local business networks by transferring know-how to nascent entrepreneurs, for instance. Many of these businesses show stable development. The examples analysed in this study demonstrate that many local businesses, particularly in urban areas suffering unfavourable site factors, are willing to support local economic development measures, e.g. by taking part in newly-established business networks. It is the task of local economic development programs to identify such local potential and to identify strategies for improving the local business environment, in cooperation with existing firms. A very good example for the willingness of local firms to support neighbourhood-oriented economic development measures is the formation of a local business association in Oberhausen (Knappeninitiative, KinO). As surveys of pedestrians inside and outside the Oberhausen urban renewal zone at various times (2001 and 2005) revealed, the activities of the Knappeninitiative have contributed to long-term upgrading of the neighbourhood’s image. The offerings of the Knappeninitiative (e.g. local “yellow pages“, neighbourhood magazine, neighbourhood festivals) elicit a very good response from local population and businesses. Participating firms offer apprenticeship training for local youths. A prerequisite for the success of this local network was that it involved a number of active persons who have a strong emotional connection to their community. In addition, the chairwoman of this association is a local “promoter” who is intensively engaged in business and in municipal politics. The close combination of urban renewal and support of local economic development, such as has been a feature of the “Socially Integrative City” programme in North Rhine-Westphalia, can be highly recommended for imitation by cities in other regions and countries. Actors from the public sector, i.e. both urban and regional policy makers, are advised to intensify efforts to activate local business potentials in urban renewal zones. For North Rhine-Westphalia, we suggest even closer cooperation between planning and economic development agencies at the state and municipal levels. When carrying out such efforts it is necessary to encourage the business community to participate in all phases of the program, from the early stages of strategy formulation to the final conduct of projects. The present case study provides an initial set of empirical results about the opportunities and risks associated with local business development support within the framework of the “Socially Integrative City” programme. To further expand knowledge about the effects of such measures it will be necessary to intensify research aimed at evaluating such effects.

MBV NRW, ILS NRW

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