Birmingham has beaten London, Paris, Rome, Madrid and Berlin to be named the best business environment in Europe.

City Council leader Mike Whitby will be in Lyon on Monday to pick up the first-place award from the European Cities Entrepreneurship Ranking, a study based on the views of 1,600 businesses across 11 European countries. The ECER survey also ranks Birmingham as one of the top three “most dynamic European cities” when it comes to encouraging entrepreneurship.

Birmingham came top out of 21 cities surveyed for the economic environment, infrastructure and the quality of life provided.

The findings follow the announcement last week that the 2008 Mercer Report ranks Birmingham as 56th, globally, on the quality of life index – one of only three UK cities included.

Coun Whitby (Con Harborne) called the ECER award “a great achievement for the city”.

He added: “My personal ambition is to see our great city elevated to the top 20 best cities to live in over the next 20 years. And today’s entrepreneurship ranking tells us that we are well on our way. Our sophisticated links across the world, especially with the private sector, are helping to lever more than £17 billion worth of investment, both under construction and proposed, into Birmingham over the next 10 years creating nearly 40,000 new jobs.”

Coun Whitby added that he was honoured that Birmingham was the only UK city to receive an award and that it was recognition of the city’s dynamic business environment and innovation in attracting international investors, highlighting its ambition with projects such as the Big City Plan, New Street Gateway, and the Library of Birmingham.

The ECER project, initiated by Lyon Ville de l’Entrepreneuriat, established a ranking of entrepreneurial cities based on how the quality of service is perceived by contractors in 27 European cities.

Explaining why the project was set up, Gerard Collomb, the Mayor of Lyon, said: “Encouraging business creation has become one of the key features of public policy at European, national and regional level.

“Local initiatives – in particular those spearheaded by local authorities and public and semi-public bodies – have seen an increase, with ambitious objectives relating to entrepreneurship and the capacity of cities to attract business.”

The ECER report said Birmingham had witnessed an amazing transformation over the past 30 years, giving birth to an 85 per cent service-based economy in change more rapid than the national economy.

It said Birmingham had successfully built an attractive city for business with an urban regeneration policy after the industrial crisis in the seventies and eighties; an attractive and active policy for entrepreneurship and business development; and an innovative and strategic approach in the United Kingdom.

Ranked across a number of themes, Birmingham’s main strengths were identified as the environment, an ability to promote itself and efforts to change the city’s image.

The European Cities Entrepreneurship Ranking was decided from an initial sample of 80,000 businesses from 21 cities across 11 European countries, with 1600 businesses from five different sectors being further interviewed.