Universities in which top researchers work alongside other world-class academics could reap rewards under plans being developed by the Department of Trade and Industry.
John Taylor, director general of the research councils, told a globalisation conference this week that the breaking down of boundaries meant more researchers were working in collaboration rather than competition.
"We have been used to an environment where the institution is king, but increasingly we are seeing collaboration between institutions and that is set to increase further. So how should we reward those who collaborate with the best in the world?" he asked.
The country should decide whether it wants higher education to become more diverse, with more money going to universities that excel at collaborating with world-class research institutions and at exploiting research, Dr Taylor told delegates at the Economic and Social Research Council conference "Future Britain: A global future?"
Two-and-a-half years after the publication of the Dearing report, Dr Taylor hinted at another major review of higher education.
"Over the past ten years, we have created more universities and we have vastly expanded student numbers. It is time for reflection and consolidation. Are universities all trying to be the same? It is time for us to talk about what (higher education) should look like in ten years' time," he said.
Stan Metcalfe, of the University of Manchester, responded: "We cannot continue to maintain the fiction that all universities are the same. The sooner we start instigating mechanisms that allow for flexibility and adaptability, the better."
Dr Taylor said plans for an indicator of excellence in the exploitation of research, to run in parallel with the research assessment exercise, will form part of the Office of Science and Technology's submission to next year's spending review.
"Is the RAE doing all we need? Are there other dimensions of excellence? How do we recognise excellence in the exploitation of research? The notion of counting the number of start-up companies is inadequate, so we are doing some thinking," said Dr Taylor.
The Higher Education Funding Council for England, which runs the RAE in collaboration with the other funding councils, has commissioned research into how the RAE could be broadened to recognise the increasing importance of the exploitation of research and the effects of the RAE on the academic community. The work will be led by Luke Georghiou, of the University of Manchester's policy research in engineering science and technology centre.
Professor Georghiou said: "It was clear that cooperation with industry was being inhibited by a lack of clear incentives for researchers. Any system that rewards such cooperation - but I don't mean by diverting funds from existing activity - would be a good thing."