An innovation district should be created in Birmingham by the º£½ÇÊÓƵ Government to boost the so-called new economy, according to a major new study out today.
Economic think tank Centre for Cities says the Government should seize the opportunities posed by the city's growing tech sector after Chancellor Jeremy Hunt announced plans to make Britain the "world's next Silicon Valley" in his autumn statement last month.
In its new report, entitled 'At the frontier: The geography of the º£½ÇÊÓƵ's new economy', the think tank calls on MPs to combine these ambitions with the levelling up agenda and prioritise building advanced tech clusters here and also in Manchester and Glasgow.
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The trio of three cities were initially chosen as "innovation accelerators" in last February's Levelling Up White Paper.
The 'new economy' describes new high-growth industries considered to be leading the way in technology and which have the potential to be a driving force of growth and productivity.
Centre for Cities said Birmingham was already home to around 38 per cent of the 7,263 new economy firms in the West Midlands and investing to further increase its appeal to these emerging industries would improve productivity, drive economic growth and create more high-skilled jobs.
The think tank wants ministers to fund the plans to set up innovation accelerators in the three cities by creating a £14.5 billion growth package for them over ten years.
This could mostly be made up of existing earmarked spending and would go towards funding infrastructure upgrades, improving public transport and boosting R&D to help make each place more attractive to emerging advanced tech industries, it said.
It added that delivering an innovation district in Birmingham should be the first step in the creation of a new industrial strategy looking at how places can cater for a range of emerging industries in contrast to recent plans focusing on the development of specific sectors.
Centre for Cities chief executive Andrew Carter said: "As a city that was at the centre of the Industrial Revolution, Birmingham is no stranger to seizing the opportunities of innovation.
"It continues to show great potential more than 200 years on and is already developing as a key hub for advanced tech firms in the West Midlands. However, given its size, Birmingham should be playing a larger role in the national economy than it does.
"The Government should therefore build on Birmingham's great potential and deliver the investments it needs in skills, regeneration and infrastructure to attract more cutting-edge businesses and reclaim its historic place as a city at the forefront of innovation."
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The report, which has been published in partnership with Birmingham-headquartered HSBC º£½ÇÊÓƵ, also calls on the Government to further support the new economy more generally across the º£½ÇÊÓƵ.
It wants to see an increase in R&D funding targets from 2.4 per cent of GDP to 2.7 per cent by 2027 and a reversal of the cuts to public skills spending and instead an increase from five per cent of GDP to seven per cent.
Other proposals include expanding R&D tax credits to expenditures associated with innovative services and extending the period of the graduate visa from two to five years.
HSBC º£½ÇÊÓƵ's chief executive Ian Stuart added: "New economy businesses are a driving force for innovation and we must support cities across the º£½ÇÊÓƵ to facilitate their growth. We have been supporting new companies to realise their growth ambitions….but financing is only one part of the equation.
"Partnerships between private and public sectors will be key to ensuring these high-growth companies can access the finance, expertise and infrastructure they need as we develop the º£½ÇÊÓƵ's economy."
