The government has announced a new £1.7bn pot of investment to improve transport and encourage growth in the UK’s city regions.

Theresa May also revealed plans to boost spending on research and development to 2.4% of GDP by 2027 as part of her industrial strategy, aimed at creating “high-paying jobs of the future”.

Writing in The Times on Monday, the PM said: “One of my first actions as prime minister was to begin the development of a modern industrial strategy that will help businesses to create high-quality, well paid jobs right across the country.

“This is a new long-term approach to shaping a stronger and fairer economy for decades to come.

“It helps young people to develop the skills they need to take up the high-paid, high-skilled jobs of the future.

 “Our industrial strategy will propel Britain to global leadership of the industries of the future, seizing the big opportunities of our time – from artificial intelligence and big data to clean energy and self-driving vehicles.”

The announcement comes ahead of May’s visit to the West Midlands – which is set to benefit from an extra £250 million specifically for transport links as part of the autumn budget – along with chancellor Philip Hammond and business secretary Greg Clark.

Hammond revealed on The Andrew Marr Show on Sunday that he will test out a driverless car while in the region – and that he wants to see autonomous vehicles on the UK’s roads by 2021.

The government will also launch its industrial strategy white paper next Monday, in which it will announce four ‘Grand Challenges’ that reflect global trends and highlight industries where it believes the UK has “an edge”; artificial intelligence and the data economy; clean growth; healthy ageing; and the future of mobility.

Clark says the government wants to attract “the best and brightest talents, from Nobel prize winners to ambitious graduate students” to the UK.

Experts have previously warned the country could experience a ’brain drain post-Brexit, with the most talented innovators opting to deploy their skills elsewhere.

The business secretary added: “Through our industrial strategy we are committed to building a knowledge and innovation-led economy and this increase in R&D investment is a landmark moment for the country.

“The UK is a world leader in science and innovation. By delivering this significant increase as part of our industrial strategy, we are building on our strengths and working with business to ensure that UK scientists and researchers continue to push the boundaries of innovation.”

The new £1.7bn Transforming Cities Fund will address weaknesses in city transport systems to help raise productivity and spread prosperity. It will fund new local links and make it easier to travel between city centres and suburbs.

Steve Rotheram and Andy Burnham, metro mayors for Merseyside and Greater Manchester, have called for more investment in public transport in their respective regions – but it is not yet clear how the new pot of money will be divided.

Transport secretary Chris Grayling said: “Investment in transport is crucial to a strong and resilient economy. The Transforming Cities Fund will drive productivity and growth in cities where this is most needed, connecting communities and making it quicker and easier for people to get around.

“We have already seen the impact of better integrated transport links for both passengers and the local economy in cities like Nottingham and Manchester. This new fund will enable more English cities to reap these benefits, helping to deliver the opportunities and ambition of the industrial strategy across the country, as well as driving forward the Northern Powerhouse and Midlands Engine.”

Rebecca Long-Bailey MP, Labour’s shadow minister for business, energy and industrial strategy, said the announcement was “too little, too late” and that considerably more was still being spent on transport in London and the south east than the rest of the country.

She said Britain should be aiming to be above averages on research and development spending calculated by the Organisation for Economic Co-operation and Development.

“To radically transform the transport infrastructure of the UK, we need more than the Conservatives are offering,” she added.

“The next Labour government will provide the urgent investment our country needs by spending 3% of GDP on R&D by 2030, and will harness the £250 billion National Transformation Fund to update our infrastructure and capital equipment, including transport.”