Collaboration with business should be recognised as a core activity of higher education in the same way that teaching and research are rewarded through assessment exercises, a Committee of Vice-Chancellors and Principals conference will hear next week.
"We should look at giving proper recognition and reward for universities which transfer knowledge," said Marilyn Wedgwood, director of the regional office at the University of Sheffield.
She added: "Universities are being asked to become part of the economic culture and knowledge transfer is a core skill. We should promote and reward people who are good at it."
The diverse nature of the higher education sector means that each university can find a place within the competitiveness agenda, Dr Wedgwood added. For example, a research-dominated university can participate in the government's Foresight exercise to develop the necessary technology for future markets, while others can provide training for local small businesses.
"Because we have a knowledge-driven economy, the link with higher education and its support to business is a really important role," said Dr Wedgwood. "Universities have a significant role to play in regional economies but the framework must be right, and businesses and policy-makers need to understand how to harness it."
Three government ministers are due to address the conference, "Stimulating regional competitiveness in the United Kingdom". They are Baroness Blackstone, the higher education minister; John Battle, energy and industry minister; and Richard Caborn, minister for the regions.
The conference is likely to discuss the higher education reach-out to business and the community fund, worth Pounds 21 million next year.
The lion's share comes from the Department for Education and Employment; the Department of Trade and Industry is also contributing. The fund will reward institutions with good employment records.
Other speakers will address how to improve graduate employability. Universities can fall into different traps, according to Sir David Watson, director of the University of Brighton. For example, a university could design a course to meet the needs of a local employer only to find that the skills shortage no longer exists by the time the course has been developed.
He said: "We need a much more sophisticated partnership with employers than in the past. The hope is that a structure such as a regional development agency will create a forum in which universities and employers can discuss issues in a much more responsive fashion."