Business development has been concentrated too much on the city centre 'glamour projects' and more should to be done to spread the wealth, it has been claimed.
And earlier this month, the city council and Local Enterprise Partnership set out its ambition to create Birmingham's equivalent to Canary Wharf with the Snow Hill Masterplan.
The issue was highlighted at a public debate on the damning Kerslake review of Birmingham City Council as a reason for the authority's persistent failure to tackle the city's high levels of deprivation and unemployment.
Prof David Bailey, of Aston Business School, said: "Kerslake said that many in this city do not have the skills to access the jobs created in the city centre.
"But it is worse than that. Over the last 25 years, we have poured a huge amount of resources into city centre glamour projects and in doing that not only ignored the outer city but diverted resources from housing, education and schools."
The debate, hosted by blogger News In Brum, also heard from Birmingham City University professor of education Richard Hatcher who described the Kerslake review as an attempt to force the council to bow to big businesses.
He added that investment had been ploughed into Snow Hill and Paradise Circus because that was where the most profit could be made.
"The council has an industrial strategy but it is languishing for lack of private sector investment and we have a government which refuses to invest in the growth this city need," he said.
Rachel Maclean, a businesswoman and Conservative election candidate in Northfield, said the city's small businesses, which created the most jobs in the city, needed more support.
"There is a problem with the city council engaging with businesses in particular," she added.
Birmingham City Council has previously defended its work on regenerating the outer city including Longbridge and the Aston Manufacturing Hub and is due to launch a new growth plan for the east of the city tomorrow.