Universities and businesses must work together better to keep the West Midlands at the forefront of advanced manufacturing, according to a leading lobbying organisation.

Responding to a Government consultation on how best to develop the sector, Business Voice West Midlands says that, with more than 300 aerospace companies including Rolls-Royce, Goodrich and Moog, automotive companies of the standing of Jaguar Land Rover, BMW and Nanjing Automotive, along with the likes of digger maker JCB, "the area is continuing to provide a value added contribution to the economy".

It goes on: "The West Midlands is proud to be the manufacturing heartland of the UK. Its can do attitude and the ability to manufacture products that global markets desire ensures it has maintained its cutting edge reputation."

But, buffeted by a series of economic shocks including the closure of MG Rover, LDV and the Peugeot plant in Coventry, much more could be achieved.

Welcoming the Government's establishment of Technology and Innovation Centres, the document notes: "There is a need to do far more to link businesses with the R&D capacity of universities.

"We also need to provide SME's with support and expertise on how to translate ideas into commercially viable products that customers want to buy."

Denise Craig, chairman of BVWM's Manufacturing Policy Development Group, said: "The perception of manufacturing as an outdated force must be changed if we are to develop the talent we need within Britain to help advance the sector.

"This includes manufacturing being spoken of positively in schools and colleges. Low aspirations from young people are deterring new talent from coming into the sector which is why many manufacturing firms have to recruit from overseas. Midlands businesses are frustrated that despite order books beginning to recover since the recent economic downturn, the problems in recruiting local people with the skills to do the job continue."

It calls for a joined up approach between the Department for Business, Innovation and Skills, the Department for Education, local authorities and schools, without which the UK would "fall behind our major competitors, further inhibiting growth".

In terms of the supply chain BVWM wants to see encouragement for the cluster approach and a loan guarantee scheme, backed by either the Government or the major manufacturers, in order to minimise risks to lower tier operators. "Payment terms set by higher tier businesses are changing significantly as they seek to use their suppliers as cheap sources of finance - this is particularly prevalent in the automotive sector."

BVWM says the banks are still not delivering liquidity and condemns what it claims is a shift towards invoice discounting and away from term loans and overdraft facilities - inappropriate when planning for new machinery, for instance. "Therefore, we would encourage the Government to use the Green Investment Bank to get investment moving again into new products and services and also for energy efficiency projects - all areas where conventional banks do not have a good track record in lending."

But the Government should go further. "A similar approach is also required to address the need for a better understanding within the banking industry of the manufacturing sector as a whole and improve access to relevant and appropriate funding packages."

However there is praise for Government moves to increase the number of apprenticeships available.