Midland companies are innovating more and spending money on research and developing new products, a survey has claimed.
Local businesses have turned the corner from relentless cutbacks and investing more in their future, PricewaterhouseCoopers found.
A higher than average proportion of companies spent more than ten per cent of their turnover in R&D in the Midlands, with 34 per cent making this investment compared to a national average of 24 per cent.
Meanwhile more than 40 per cent indicated that they are generating more than 15 per cent of their revenues from new products or services.
This compared with an average national figure of 33 per cent.
David Waller, chairman of PwC in the Midlands, said: "We have gone through a cycle in the late 1980s and 1990s which was about cutting costs.
"Now companies have done that and are now looking to the future. If anybody asks about business strategy, I always ask companies how much of their revenue they expect to generate from things they are not doing now.
"If you have firms who are generating 15 per cent of their turnover from new things every year, that means every three years nearly half of their income comes from new products.
"This is good for the region because it shows our firms are looking forward, being positive and doing things."
The study covered a range of mid-market firms in the region with sales of between £20 million and £1 billion.
Mr Waller said: "The best profit performers have established that if they just stick to the old ways of competing, by driving down the cost base and improving the supply chain alone, then they will lose out in the future competitiveness stakes.
"The new winners will be those who blend the established fundamentals of good business with creating value from their intangible resources.
"The most productive areas will be a greater focus on people development and innovation. Midlands companies need to focus on these areas in order to maintain or build a competitive edge."