UNDERSTANDING THE WEST MIDLANDS FUTURES GREEN PAPER
How does it affect your business?
June 2025
WHAT IS THE WEST MIDLANDS FUTURES GREEN PAPER?
The West Midlands Futures Green Paper (WM Futures) is a proposed strategy from the West Midlands Combined Authority (WMCA) about how to develop and transform the region to unlock inclusive growth, increasing all residents’ living standards. It is a long-term strategy looking at the next ten years, and focuses on four significant areas of policy change on the horizon:
• The West Midlands Growth Plan, which builds on the WMCA’s previous Plan for Growth, published in 2022. The growth plan focuses on how businesses, places, people, and the regional narrative can contribute to economic growth.
• The Spatial Development Strategy (SDS), a requirement from the government to demonstrate how the region will meet its collective housing need, including the relevant infrastructure, transport connectivity, and nature recovery plans.
• Public Service Innovation, a set of principles and goals to improve public services across the region.
• The second Net Zero Five Year Plan, which aims to help the region achieve net zero carbon emissions by 2041, with a particular focus on managing energy demand.
The WMCA conducted more than 70 interviews with key stakeholders over a year ago, as part of developing an evidence base for WM Futures.
The strategy is underpinned by the West Midlands Theory of Growth, a research-driven analysis of the region’s strengths and weaknesses. Rather than just comparing the region to London, the Theory of Growth identifies and scrutinises 12 key economic hypotheses of particular relevance to the West Midlands and uses similar regions globally to act as comparators.
WHAT DOES WM FUTURES SEE AS THE REGION’S STRENGTHS?
• Scale: The regional economy is the third largest in the UK at £77 billion, more than that of Oxford and Cambridge combined.
• People: The West Midlands’ population is growing more quickly than all city regions outside London and is both young and diverse Unlike most regions, the working-age population is projected to grow over the next 10 to 15 years. A growing working population is an important factor in sustaining economic growth through labour and consumption.
• Investment and innovation: Outside of London, Birmingham has received more Foreign Direct Investment than any other region in the UK and the West Midlands excels at leveraging private sector investment in research and development from public funding
• Connectivity: 90% of the UK population can reach the West Midlands in 4 hours, with connectivity that will be bolstered by the advent of HS2.
WHAT WEAKNESSES IN THE REGION ARE IDENTIFIED IN WM FUTURES?
• Productivity: WM Futures uses gross value added (GVA) as a measure to estimate the productivity of the region. This figure suggests that the region is significantly less productive than others across the UK For example, GVA per hour worked in the West Midlands is £34.50, compared with £36.60 in Greater Manchester and the UK average of £39.50. If regional productivity were to meet the national average, the West Midlands economy would grow by £12 billion.
• Poverty: The region has the highest national rates of child poverty (43%) and poverty across the whole population (27%), which has a direct knock-on negative effect on people’s life expectancy, health outcomes, and development of skills and qualifications.
HOW DOES WM FUTURES PROPOSE TO UNLOCK INCLUSIVE GROWTH?
WM Futures can be divided into 6 component parts. Three of these focus on the vital role that businesses play in driving growth. A fourth considers a place-based approach and the fifth focuses on people and skills. The final component part concerns the region’s institutions and the economic narrative in the region. These are each summarised below:
1. High Growth Clusters and Innovation
WM Futures identifies 6 key growth clusters as priorities for accelerating regional growth:
• Advanced engineering, light electric vehicles and batteries
• Clean Tech, focusing on smart energy systems
• Health and medical devices, diagnostics and associated digital healthcare
• Digital, tech and creative
• Modern professional and financial services
These clusters are where the West Midlands is identified to have comparative advantages and businesses are considered confident to invest. Private investment in the West Midlands outstrips government investment at a 5:1 ratio, so the aim is to drive further government R&D investment into the region through these clusters.
2. Business Leadership and Investment
WM Futures recognises that the clusters in the first component of the strategy cannot solely boost the region’s economy. Research shows that productivity is a problem in the West Midlands and the WMCA propose two potential areas of concern:
• WM Futures suggests that Tier 3, 4 and 5 firms (those further down the supply chain) have less autonomy and prioritise efficiency of operating to low margins rather than growth.
• The West Midlands suffer from low levels of business investment.
The WMCA believe that boosting these two areas will be key to future growth.
3. The Everyday Economy
The WMCA describe the ‘everyday economy’ as comprising labour-intensive, non-tradable activities such as health, education, care, retail, hospitality, and construction, as well as the social economy; social enterprises, cooperatives, mutuals, community-owned businesses, and other not-for personal-profit organisations that use a trading model to generate funds and tackle inequality
This type of work represents 63% of all jobs in the region but WM Futures states that these jobs have relatively low job security and pay. It is highlighted in the strategy that these jobs are often found in areas of high deprivation and are characterised by younger, more diverse and often female, disabled, or foreignborn workers. It is predicted that while AI may replace some of these jobs, they are more likely to be augmented by AI rather than replaced.
As a large part of the economy, WM Futures looks at ways in which productivity and efficiency can be improved in the everyday economy while protecting workers. Examples of strategies suggested in the Green Paper are retaining, training and fairly compensating staff to help generate productivity increases in the everyday economy and realise longer-term societal benefits.
4. Places
This driver identifies key development sites for the region, such as HS2 stations and the West Midlands Investment Zone (which comprises the Birmingham Knowledge Quarter, Coventry and Warwick Gigapark, and Wolverhampton Green Innovation Corridor), but also discusses the development of land through the Spatial Development Strategy (SDS) To meet housing need in the region, the SDS will identify where housing can be built within and without the region’s boundaries with appropriate infrastructure. This will prioritise brownfield sites and housing density
5. People and Skills
As discussed above, WM Futures highlights the potential of the region’s demography but also acknowledges the challenges faced by the resident population, particularly child poverty, poor health, and low educational attainment. Key factors identified to drive growth are:
• Tackling youth unemployment – WM Futures states that 9.1% of the youth population in the region is unemployed, compared to a national average of 5.5%. To tackle this, the WMCA proposes creating 20,000 new work experience, training placements, and apprenticeships by working with businesses across the region, work on which has already begun.
• Addressing economic inactivity and under-employment – WM Futures proposes a strategic focus on upskilling people to achieve level 3 qualifications (understood to significantly improve earning potential and labour market resilience) as a means to reduce under-employment. It is unclear what solutions will be implemented with regards to economic inactivity at this stage, however these are likely to be identified in the region’s response to the Get Britain Working White Paper, which is currently in development.
Economic Networks and Narrative
WM Futures suggests that regions which can present a coherent narrative and project a positive and distinctive image are more successful at leveraging “soft power” on the global stage. The strategy proposes that collectively, we need to better communicate the strengths of the West Midlands, such as its scale, location, youthfulness, diversity, and cultural and creative life. The Commonwealth Games is given as a successful example of this, as is the It Starts Here campaign from the West Midlands Growth Company.
WHAT DOES WM FUTURES MEAN FOR GREATER BIRMINGHAM BUSINESSES?
WM Futures presents a critical opportunity for businesses to shape regional policy at a time when the WMCA has more power to make decisions than ever before (for more information on devolution in the West Midlands, please read this briefing on the English Devolution Whitepaper). The scope of WM Futures means that almost every organisation will be affected by the plans, directly or indirectly. The WMCA has stressed that this is intended to be an ongoing conversation over the next ten years, but the more that different businesses can contribute initially, the better chance there will be of a shared vision and success.
For businesses that feature in the priority growth clusters, it is likely that this will lead to greater opportunities to attract investment and accelerate R&D. WM Futures specifically mentions low levels of investment from the UK government in the region, so we can expect to see the WMCA and the Mayor advocating for this to change. We can also anticipate that there will be a push for businesses in these areas to collaborate more closely with universities across the region to drive innovation.
For organisations outside of the clusters, it is likely that there will be a drive to improve productivity through avenues of leadership and management training. Businesses in the everyday economy, which WM Futures highlight as an important part of the regional economy, may face pressures to improve efficiency as a result of persistent recruitment difficulties. The government’s recently announced Immigration White Paper, which substantially restricts overseas recruitment, will increase pressure to recruit locally. There will likely be an even greater need, but potentially also new opportunities for collaboration, to build a pipeline for local skills development in these areas.
Businesses in the housing and transportation sector (and beyond) have an opportunity to feed in at an early stage to the Spatial Development Strategy, particularly to raise awareness of barriers they face as organisations when working with local and regional authorities. The consultation also presents an opportunity to address skills shortages and barriers to recruitment in these industries.
WHAT IS THE GBCC'S POSITION ON THE WM FUTURES?
The GBCC is encouraged that the WMCA is taking a long-term view of growth in the region, and that it prioritises a consultative, shared approach that places higher living standards for residents as an equal pillar alongside economic growth.
Our 2024 report A Roadmap for Business Growth, based on the work of the Business Commission West Midlands, recognised similar strengths in the West Midlands, and it's encouraging to see many of the recommendations made in the Roadmap for Business Growth echoed in WM Futures. This includes the Commission’s suggestion to more effectively target business investment into growth areas like Clean Growth and Health, and the recommendation to learn from other regions about how to create a place-based narrative to attract investment.
Further, the West Midlands and Warwickshire Local Skills Improvement Plan highlighted key skills gaps in the region, with a focus on specific sectors that were struggling to find the right workers, such as engineering, construction, and digital; a gap in management skills; and challenges concerning digital skills. It is evident that skills remain a barrier and closer connections between FE providers and businesses to identify gaps in provision and avenues for upskilling employees – as suggested by WM Futures – are essential for growth.
As mentioned above, the initial consultation process on WM Futures is open until 8th June 2025 and the GBCC strongly encourages all members to engage with the process to ensure that the views of business in the region are strongly represented. You can find the consultation here
WHERE CAN I GO FOR THE LATEST ADVICE AND INSIGHTS?
For regular updates on how devolution is progressing with the WMCA, as well as other topical local, national and global business news updates, subscribe to our newsletter, Greater Birmingham Business News We will continue to represent the voice of local business to stakeholders and policy makers, such as the WMCA, through roundtables and various research, such as the Quarterly Business Report and the regional Quarterly Economic Snapshot.