The regions could hold the secret to unlocking UK productivity and economic growth, says the business group.
The CBI says the UK could add more than £200 billion to economic growth over the next 10 years if it invests in higher regional productivity.
It is the main finding from research involving official government data and identified areas for improvement in education, transport links, management practices, innovation and exports.
The CBI said regional investment in these areas would boost UK nominal gross value added (GVA) by £208 billion over the next decade, equivalent to the combined GVA of Wales, Scotland and Northern Ireland combined.
It would also create more jobs and raise living standards across the UK, helping to reduce regional inequality, it said.
The UK is the world’s fifth largest economy and it is growing faster than many of the top countries in the world, yet productivity lags far behind.
Official figures show that in 2015 output per hour was 35% lower than Germany, 30% behind the US and even 27% lower than France.
The CBI suggest several specific actions that could help redress the balance:
Launching the report in Coventry today, CBI director general Carolyn Fairbairn, said: ““When it comes to productivity there are big variations between different parts of the UK.
“But while you might expect big gaps in productivity between regions, you might be surprised to hear that productivity differences within regions are almost as big.
“Here in the West Midlands, for example, Solihull is a third more productive than Wolverhampton, just 20 miles away.
“Most of all – these productivity differences matter to people through their effects on wages and living standards.”
Responding, business secretary Greg Clark said: “Our upcoming industrial strategy will have a particular focus on improving productivity and just last week we announced the £23 billion National Productivity Investment Fund.
“This new investment will help us unlock the full potential of regional economies and support businesses of all sizes to grow and prosper.”
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