The Royal Society for the Encouragement of Arts, Manufactures and Commerce said that next month's draft bill on the functions of regional assemblies had to go well beyond the government's existing promises on devolution to succeed.
The report - a study on how devolution might work in the south-west - comes amid mounting speculation that the government will include more powers in the bill than those outlined in the 2002 white paper, Your region, your choice.
The society warns that without significantly greater powers, assemblies will neither attract high-calibre politicians and officers nor command respect from government or business.
There are suggestions that some of the society's recommendations may be included in next month's bill.
Deputy prime minister John Prescott has already hinted that assemblies should take control of learning and skills councils.