The minister was speaking at the Association of Town Centre Management and Scottish Retail Consortium Conference where he encouraged interested parties to express their views on business improvement districts and the opportunities they offer to businesses and the wider community.
Mr Kerr said:
'Business improvement districts are part of the Scottish Executive's commitment to promote conditions for long-term sustainable growth and to create a Smart Successful Scotland.
'They are a potentially powerful tool and are relevant to all businesses and all types of areas. They can benefit city centres, town centres, industrial estates, business parks and anywhere where local authorities and businesses see an opportunity to stimulate economic growth.
'Businesses improvement districts have already been successful elsewhere. You only have to look at Times Square in New York to see the massive improvements they can make to the look and feel of an area.
'I believe these partnerships could deliver real benefits for communities in Scotland too. Improvements in priority areas like transport, tourism and the working environment are just some of the many genuine benefits BIDs could provide.
'Business improvement districts will only work if there is a true partnership between the public and private sector. The power will be with the business community to make a real difference in their local area.'
Director of the Scottish Retail Consortium, Fiona Moriarty, said:
'If BIDs in England and W ales prove to be successful, businesses and communities in Scotland will be at a competitive disadvantage if they don't grasp this opportunity.
'This is a chance to find the perfect model for BIDs in Scotland and this conference today has played a vital role in advancing the debate on BIDs.'
Chairman of the Association of Town Centre Management in Scotland, Gordon Reid, said:
'There is widespread political and business will for the development of BIDs in Scotland and the speakers at today's conference led a healthy debate on this funding mechanism that will take forward urban regeneration.
'This proposal has the potential to radically change the nature and appearance of Scotland's towns and cities and I look forward to the concept being legislated upon.'
The consultation on business improvement districts began on 3 July 2003 and will close on 10 October.
The development of the business improvement district system in Scotland was recommended by the local government committee of the Scottish Parliamentin its Report of Inquiry into Local Government Finance.