Birmingham was named a "science city" by Gordon Brown yesterday, as the Chancellor warned that Britain's economic success depended on high-technology industries.
Traditional metal-bashing manufacturing faced a bleak future in the face of competition from emerging economies such as China, he said.
In his last Budget speech before the forthcoming election - expected in early May - Mr Brown announced a series of measures to improve Britain's skills base, including paying young people up to #75 a week to stay in school or training after the age of 16.
Free with today's Birmingham Post - a comprehensive guide to this year's budget.
He said: "Our aim must be that Britain becomes the world's leading location for research- based, science-based and knowledge-based industries."
The Budget coincided with the release of official figures showing a million manufacturing jobs have been lost since 1997.
The Chancellor also rode to the rescue of Labour's troubled election campaign with a budget offering extra help for pensioners and firsttime home buyers.
Pensioners will receive a #200 rebate on their council tax bills - plus free bus passes.
The threshold for stamp duty on residential property will increase from #60,000 to #120,000. Mr Brown also froze fuel duty, announced plans to increase the inheritance tax threshold to #300,000 and offered unemployed single parents #2,000 to return to work.
The Chancellor told MPs his recent visit to China, where he met officials in a bid to save Rover, had opened his eyes to the threat facing manufacturers.
He said: "Faced with the accelerating pace of technological change and the rapid expansion of global competition, as I found in China, Britain's economic destiny cannot be founded upon a low-skilled, lowtech economy, but depends upon establishing British leadership in skills, science and the knowledge economy."
Birmingham would join Newcastle, Manchester and York as science cities, he said.
Industry and universities will be encouraged to work together, for example by offering extra funding to universities which allow businesses to use their research facilities.
There will be tax credits for businesses involved in research and development.
The Chancellor also announced a series of measures to improve skills, including paying outstanding newly-qualified teachers a bonus if they chose to work in Birmingham.
The measures were welcomed by Birmingham Labour MP Steve McCabe (Hall Green).
He said: "We already know that to compete in today's world, you have got to improve skills.
"Gordon Brown has announced a number of measures to do that in Birmingham and the West Midlands."
More on the budget: