Report urges cities to improve

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A study by the Centre for Cities research group criticised public sector policies for being too "narrowly focused" on science and technology, often creating business and support services which overlapped.

A huge number of support services was confusing for business, said the report, revealing that in Birmingham alone firms had to chose between 55 different initiatives across 29 organisations and partnerships.

The group criticised high house prices in cities such as Cambridge, Bristol and York and slow planning procedures which it said had delayed investment.

Hannah Brown, research manager at the Centre for Cities said: "Even at a time of economic uncertainty, innovation is a key ingredient for business growth, but supporting innovation in Britain's cities isn't about gimmicky policy initiatives or niche business schemes.

"Instead, cities need to get the basics right - delivering good transport, better housing and faster planning decisions - to help businesses to innovate and compete. A better business environment in our cities will help the next James Dyson or Anita Roddick emerge."