Advantage West Midlands is under attack from business leaders who said it needed to focus its efforts more and to get its message through to the "grass roots".
The claim yesterday followed a national report by the Institute of Directors suggesting that only a third of companies know what regional development agencies do and that only eight per cent believe their local agency understands the needs of business.
Bob Michaelson, chairman of the IoD in the West Midlands, said: "Advantage West Midlands has achieved a great deal after a somewhat shaky start, but it has unfortunately developed a reputation for being cumbersome, slow to react and poor at communicating.
"It has built up a dialogue with business leaders but to a large extent this is preaching to the converted.
"We feel it has failed to fully engage the SME and fledgling entrepreneurial sector at the grass roots level.
"The IoD is now calling on AWM to develop a tighter focus and collaborate more with the business community to identify priorities."
AWM was last night taking the IoD criticisms seriously but the feeling was that the key issues were being addressed in the new threeyear corporate plan.
Spokeswoman Sara Moseley said: "We are very encouraged to learn that IoD members who have had direct contact with regional development agencies have a positive view and it is also heartening to see IoD regional offices working so positively with individual RDAs on a range of initiatives.
"It is also important to note that AWM funds the West Midlands Business Council which is represented on both our Regional Skills Partnership and Enterprise Board.
"As RDAs our focus needs to be on those companies and industries that particularly need help to start up, grow or diversify. However, we must continue to listen to businesses and do more to ensure there is a greater awareness of the roles and responsibilities of RDAs."