"I whole heartedly welcome this new partnership and the impact it can have on the West Midlands and on a global stage," Lord Paul, in his capacity as Chancellor of the University of Wolverhampton, said.
The West Midlands Combined Authority (WMCA) is a new initiative between Wolverhampton university, Birmingham City University and Coventry University.
"It is vital that universities are not only seats of learning, knowledge and innovation but are also at the forefront of economic regeneration and providing the necessary skills for industry," Lord Paul said.
The WMCU will also tackle a significant shortage of lower and higher end skills - particularly in the health and advanced manufacturing sectors - in a renewed effort to address the high level of unemployment (9.3 per cent) across the region's seven metropolitan authorities.
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Professor Geoff Layer, vice-chancellor of the University of Wolverhampton, said: "Our ambition through our collaboration is to build on existing assets across all three universities focusing on product leadership and priority industries for the region including health care, construction, digital and creative and professional services.
Today's announcement came ahead of the official launch of the WMCA next month as a signal of how higher education institutions can contribute to increasing productivity, wealth creation, and job opportunities across the West Midlands.
Professor Cliff Allan, vice-chancellor of Birmingham City University, said: "The launch of West Midlands Combined Universities is about making sure higher education across our region can meet the ambitious demands of the devolution agenda.
The partnership brings together the institutions' applied research and training expertise to develop skills and foster innovation across the region.