There are few cities in Britain where the realities of today's economic forces are more starkly demonstrated than Birmingham.
England's "second city" is in a state of rapid change and, for once, higher education finds itself playing a central role in a city's transformation.
Birmingham's city councillors, policy-makers and planners are directly involving the city's three universities in redevelopment and regeneration schemes, which are now being spurred on by the Longbridge crisis.
At the same time, the universities themselves are bringing about significant changes in the way they are structured and managed, and in their activities, to meet the emerging local and global challenges.
The various pressures in play have made long-standing rumours of an impending merger between Birmingham and Aston universities more convincing.
Maxwell Irvine, Birmingham's vice-chancellor, sees this as an attractive possibility "in the short to medium term" after the next research assessment exercise. It would further strengthen his university's already powerful strategic and economic position in the region, as well as increasing its chances of securing a place in Britain's top six elite institutions.
With Birmingham fielding 21,000 full-time equivalent students, compared with Aston's 5,000, and its Russell Group research clout, such a move is likely to be seen as more of a takeover than a merger. Birmingham already has a Pounds 100 million building programme under way, and it has boosted its capacity by acquiring the Westhill and Selly Oak campuses.
Aston would certainly be an attractive acquisition, with its growing reputation for high quality - particularly in specialist fields such as optometry. It also heads the league table for getting its graduates into jobs.
Aston is well placed geographically to take advantage of one of Birmingham's most prestigious developments. Millennium Point, a Pounds 114 million complex that will house key education and technology facilities, is the United Kingdom's second biggest millennium project and is on the doorstep of Aston's campus.
The University of Central England has the biggest stake in the development, with a commitment to relocate its engineering department to a new Technology Innovation Centre there. It is also involved in the development's University of the First Age - a project designed to teach children more about higher education. Birmingham University has a presence in the complex's Discovery Centre. But it would no doubt hope to benefit from any future arrangements between Millennium Point and Aston.
However, Aston is treading carefully and has made it clear that it has too much going for it to submit to a takeover. A task force set up by the two universities and chaired by Aston's secretary-registrar David Packham is due to report soon on the potential for closer collaboration. The universities are already working towards everything short of a full-blown merger, including common structures, joint programmes, credit recognition and joint approaches to support services.
Michael Wright, Aston's vice- chancellor, said his university would not merge "just for the sake of it" and needed to see the net benefits. On the other hand "it would be daft to say never".
Professor Irvine commented: "Senior management of both institutions have agreed to do everything to encourage our institutions to work together. When we have had an opportunity to see how that pans out, we will review whether there is a need for institutional realignment. There may be models of cooperation that are short of a merger, but I do not know many that work very well."
The city council is viewing such developments as part of the economic dynamic of the region, in which higher education is expected to play an increasingly important role.
Tim Brighouse, the council's chief education officer, said: "If we are trying to catapult ourselves from a manufacturing base into the knowledge economy, then we have to go flat out for higher education. So we are putting a lot of energy into raising the educational expectations of people, to realise what it might be like to live in a learning age."
In the news, page 10 Opinion, page 16