The Birmingham Economic Review is out now!
This year’s report will provide a comprehensive analysis of the city’s economy amid the wider geopolitical landscape, and actionable measures that businesses and stakeholders from across the city-region can take to drive economic growth.
Read the full Birmingham Economic Review 2025.
Dr Gerardo Javier Arriaga Garcia looks at how Greater Birmingham is seizing a pivotal moment for growth by leveraging major investments, health tech innovation, and the Birmingham Knowledge Quarter to drive jobs and economic resilience amid connectivity and cyber challenges.
At a glance
- The Regional Investment Summit in Birmingham on 21 October 2025 confirmed over eight hundred million pounds of new investment for the West Midlands. This included a four hundred million pound commitment linked to the Birmingham Knowledge Quarter within the West Midlands Investment Zone.
- The West Midlands Health Tech Innovation Accelerator has attracted almost fifty million pounds of private co-investment from an initial public grant of fourteen point five million pounds.
- Two system risks shaped the year, the delay to the HS2 Handsacre connection and the Jaguar Land Rover cyber attack, both with implications for investor confidence and supply chains.
- Greater Birmingham business sentiment moved into more positive territory in late 2024, with sixty five per cent of firms expecting turnover growth in the next twelve months.
The focus of in this piece is the Greater Birmingham city-region covering Birmingham, Solihull, Bromsgrove, Cannock Chase, East Staffordshire, Lichfield, Redditch, Tamworth and Wyre Forest. References to the West Midlands at ITL1 follow the current ONS classification that replaced NUTS.
Why innovation matters now
Innovation matters now because national policy is actively seeking investable propositions that can turn intent into delivery. At the Regional Investment Summit the Chancellor set out a pro investment agenda that aims to reduce administrative costs for business and streamline regulatory processes. The clear signal is that city regions with ready projects, skilled people and clean governance will move first. For our city region this means packaging sites and skills around the Birmingham Knowledge Quarter and linked health and data assets so announcements convert into contracts, construction and jobs that are visible across all nine authorities.
Innovation also matters because public funding is tilting further toward a balanced geography. UK Research and Innovation reports that half of spend in the latest year was invested outside the greater south east. The direction of travel favours well prepared place-based programmes that can crowd in private capital and show a credible path from research to adoption. Greater Birmingham should continue to blend UKRI and Innovate UK instruments with local delivery where universities and the NHS provide strong anchor demand.
Birmingham Tech Week added energy to this shift. Running from 20 to 24 October 2025, it brought more than eight thousand participants, over one hundred speakers and around sixty events across the West Midlands. The week showcased strengths in data, artificial intelligence, health technology and creative digital, and drew international delegations and national sponsors including IBM, Goldman Sachs and Accenture. This concentration of activity signals depth in the regional ecosystem and offers a ready platform to connect investors to firms and to sites such as the Knowledge Quarter.
Finally, national institutions are being asked to work more closely with Mayors and Combined Authorities. The National Wealth Fund and the Office for Investment are moving toward strategic partnerships with city regions, including the West Midlands. This is relevant because it introduces a clearer route from local pipelines to national capital, and it rewards places that can evidence investable projects with community benefit.
Strengths to scale in 2025
Health tech can be seen as one, if not the most immediate platform for scale. WMHTIA shows that targeted intermediation can unlock private money and shorten the path from prototype to clinical use. The model, which blends specialist support, access to trials and a route into procurement, has already realised nearly £50 million in private co-investment, which comes to show the success of WMHTIA model in achieving regional economic growth.
Forging Ahead strengthens the commercialisation spine behind that pipeline. Launched in May 2025 by a coalition of fifteen Midlands universities and led by Loughborough University with Midlands Innovation, it is a £16 million initiative to accelerate routes from research to market. The programme focuses on venture creation, investor readiness and pathways for scaling, and is designed to lift the volume and quality of spinouts and high growth firms across the Midlands. For Greater Birmingham, the opportunity is to link Forging Ahead cohorts to demand, advanced manufacturing and net zero supply chains so that commercialisation is anchored in local markets and then scales outward.
The Birmingham Knowledge Quarter is the next strength. It brings universities, commercial space and transport connectivity into a walkable district around Curzon. The four hundred million pound partnership announced during the Summit signals confidence from institutional investors. Over the next two years success will look like serviced plots, enabling works, early pre-lets for research intensive occupiers and clear wayfinding for SMEs that want to co-locate or access facilities. When paired with HS2 ,Curzon Street and local metro and active travel links, the district can become a visible demonstration of how research translates into jobs in the city centre and into opportunities for firms in Solihull, Bromsgrove and beyond.
The business base across, in this case of nine local authorities, is the quiet strength behind any innovation story. Chamber data shows improving demand expectations, and Business Growth West Midlands offers a clear set of adoption and growth programmes that span grants, investment readiness, export advice and supply chain transition. The task is to make these offers easy to navigate into for micro and small firms ,then to track the take-up and impact by place and sector. This is where diffusion happens at scale, and it is where productivity gains are likely to come from over the next years.
Progress on net zero creates another demand-side market. The West Midlands Combined Authority is working to a 2041 target, while Birmingham’s city ambition to become a net zero city is 2030. That policy direction creates predictable local demand for retrofit, clean mobility and digital energy solutions, all of which are innovation markets where local firms can develop products and services.
Real risks to manage
Connectivity risk remains a issue. The four year delay to the HS2 Handsacre connection affects the narrative we present to investors and the practicalities of moving people and goods. The core Old Oak to Birmingham section still proceeds, but the broader benefits that rely on integration with the classic network will now arrive later. Mitigation would require doubling down on city centre public realm, bus, metro and active travel connections that make the Knowledge Quarter and adjoining sites function well for workers and visitors. Clear milestones and transparent progress updates could help sustain investor confidence.
System resilience is now a central part of our growth plan. The Jaguar Land Rover cyber incident showed how a shock to one firm can rippled across suppliers, cash flow and employment, especially in Solihull and the wider conurbation. Board-level cyber planning and cyber security strengthening should also be considered part of the economic policy, not just IT “housekeeping”. Nonetheless, manufacturing will remain a source of strength for the region, and resilience is a precondition for continued innovation investment.
Local delivery capacity is still under pressure. Birmingham City Council is still being overseen by government-appointed commissioners after it effectively went “bankrupt” in 2023, and the second progress report in January 2025 set out progress yet highlighted outstanding challenges around finances, equal pay liabilities and generally how the council runs. This matters because planning, transport and site enablement functions need enough capacity to keep private projects moving. The practical response is to use Combined Authority convening power, standardise processes across Investment Zone sites and sequence delivery so that investors see steady, reliable progress.
Five practical actions for 2025 and 2026
- Extend the WMHTIA model so more firms can find a first customer in the NHS and publish regular metrics on adoption. Link successful pilots to export support so firms can scale into international health systems.
- Keep Investment Zone delivery predictable through quarterly public scorecards that track plots, utilities, consents, pre-lets and construction starts. Use the Summit commitments as the baseline and show movement quarterly.
- Make SME adoption simple by using a single front door into Business Growth West Midlands, then measure completion and outcomes across all nine authorities. Track completions and outcomes by local authority and publish dashboard.
- Use net-zero programmes to create local markets for retrofit and clean mobility, aligning skills provision to these supply chains. Use municipal procurement and large anchor buyers to create steady demand for local firms.
- Package one international story that links the Knowledge Quarter, Curzon connectivity, university and NHS capabilities and supplier strengths across the city-region.
- Make inclusion co created, measurable and place specific. Agree an inclusive innovation compact for the Knowledge Quarter and linked sites, co designed with residents and SMEs. Publish a simple inclusion plan within two quarters that covers access to jobs contracts, affordable space and skills. Track a small set of participation and outcome indicators and report progress each year.
Conclusion
Greater Birmingham enters 2026 with real momentum. Investor attention has increased, Knowledge Quarter is moving into delivery, health technology is proving ability to crowd in private capital, and commercialisation system has new depth through Forging Ahead. The outlook is positive because these are not isolated projects. They are a pipeline that links research, skills, sites and markets across the nine authorities.
This blog was written by Dr. Gerardo Arriaga-Garcia , Research Fellow, City-REDI, University of Birmingham.
Disclaimer:
The views expressed in this analysis post are those of the author and not necessarily those of City-REDI or the University of Birmingham.