The West Midlands bucked a falling trend by increasing investment in research and development last year – as the country lost more ground on European rivals.

New data shows more than £1.46 billion was spent on R&D in the region in 2012, an increase of more than £200 million, on the back of rising automotive and aerospace investment.

That came as falling investment in UK pharmaceuticals saw the country’s total R&D spend dip four per cent in constant prices from a year earlier, to £17.1 billion, the first fall since the recession.

Despite the regional rise on the back of Jaguar Land Rover’s success story, the West Midlands remains an under-achiever in terms of R&D. It remains behind the South East, at £4.1 billion, East, at £3.5 billion, and North West, at £1.8 billion – despite all three suffering major falls last year.

There are 14,000 people employed in R&D in the West Midlands, although growing that figure is a major target for decision makers.

The Organisation for Economic Co-operation and Development (OECD) said in a report: “Aerospace R&D rose by £42 million, even though the sector is not the region’s main strength.

“Meanwhile, of the £176 million UK increase in vehicle and other transport equipment R&D, the large bulk, £140 million, occurred in the West Midlands. JLR, BMW and MG all invested in car design and development in the region. As a result, the West Midlands has at last moved up a little in the R&D stakes.

“We think that over the next half-decade the North West, South East and East of England will all see R&D recoveries. They, like London, will gain from current policy to concentrate public-sector R&D in the strongest universities, and from private sector investment following public sector, as well as from continuing spending by aerospace and life sciences and digital,” added the OECD report.