Enterprise in the heart of 'social housing estates': the principle of proximity

In line with their requirements and those of the inhabitants, an URBAN project is helping small businesses to invest in the future of the southern districts of Strasbourg. It is also gaining a following much further afield.

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Kloster’s bakery and cake shop after its renovation (photograph: Studio Graphique Typhis). Kloster’s bakery and cake shop after its renovation (photograph: Studio Graphique Typhis).

Context

Meinau, Neuhof, Musau, Port du Rhin... These districts to the South of Strasbourg and their 37 000 inhabitants are experiencing a range of difficulties which are shared by many suburbs. Unemployment, poverty and failure at school are all factors that contribute to social exclusion and insecurity, and which do not promote local economic development. The business network is minimal in the heart of the housing estates, with their poor facilities and services. The high failure rate of SMEs is combined with the advanced age of the owners of businesses. They have difficulty in accessing regional or national public assistance mechanisms, whose selection criteria and procedures are inappropriate in this context.

URBAN for a coherent, united city

In order to support the economic and social revitalisation of the southern districts, the European URBAN II programme for the Urban Community of Strasbourg (CUS) has focused its hopes on proximity. It is based on a strategy which combines structuring effects for the territory with impetus for the community. Related to employment, insertion and the environment, URBAN projects make the most of local potential, including the young age of the population, the dynamism of the voluntary sector and natural areas. They are assisting urban renewal operations (housing, public areas and roads) undertaken since 2000 in the context of Strasbourg’s Grand Projet de Ville. An URBAN economic development committee (CDEU), which was established in order to help set up projects with an economic dimension, brings together public and private stakeholders, and is to date the only public/private partnership structure.

The conclusions of a survey of 226 small businesses undertaken in 2004, at the initiative of the CDEU, led to the introduction of a new support mechanism for small businesses, crafts and local services in the southern districts in May 2005. Aimed at businesses with less than 20 employees, it provides aid for tangible and intangible, property and furniture investments, through three types of intervention: conversion work, productive investments (machinery and software) and for reopening a business. A significant percentage of funding, (30% on average, 15% from the ERDF and 15% from the Alsace Region, with a total annual available budget of EUR 50 000), is allocated subject to a commitment of continuity over a 5-year period. Administrative procedures are facilitated through a single application file and a one-stop shop for subsidy applications.

Results

On 11th April 2006, this URBAN project earned Strasbourg the 1st prize in the French economic press competition, “Economic initiatives”, in the “Enterprises and territories” category. A few months later, the envisaged objectives were exceeded and the CUS negotiated a new annual budget with the Region, which was increased to EUR 70 000. At the end of September 2006, the assistance fund had already benefited 14 businesses including 3 bakeries, 2 hairdressing salons, 2 carpentry firms, 1 butchers, 1 telecoms boutique, 1 leisure centre, 1 pharmacy, 1 florists, 1 catering service 1 body repair garage. The reopening of a body repair garage by a 24-year old illustrates a particularly innovative type of assistance, in that it includes joint funding for the purchase of tangible elements of a business.

In terms of jobs, the project has to date enabled 83 posts to be maintained, the creation of 11 and it also employs 12 for its implementation. Through its applicability to all types of local activities, it notably offers the advantage of giving support for investment in businesses which provide services to people, which is a significant source of jobs.

This success has led the CUS to propose the extension of the mechanism, beyond the area of the ERDF’s intervention, to the districts of Hautepierre and Cronenbourg, where it will be financing the entire project. Under the 2007-2013 Structural Fund programme, “Regional Competitiveness and Employment”, the CUS has also proposed to the Region to extend the initiative to all ten of the sensitive urban areas in the agglomeration. Finally, the experience will be presented to the 37 cities of the 13 Central and Eastern European countries who are members of the Strasbourg Club, created in 2003 at the initiative of the Town Council and the urban community, with a view to potentially transferring it to these countries. In order to assist this transfer, the CUS will propose expert assistance through the European URBACT programme for exchanging urban development experiences.

Draft date

01/09/2006