Higher education could benefit from attempts to reform the European Union's policy-making by basing it on the knowledge economy.
Stephen Byers, trade and industry secretary, told a conference on knowledge links this week that the United Kingdom "will argue very strongly for a new economic settlement based around the knowledge economy, which will represent a huge shift for the European Union.
"The direction in which we have to go is one in which knowledge is king," he said. "I don't think we should underestimate the talent in our universities, which is crucial for our future economic well-being."
The British government plans to make its case at a summit in Lisbon in March.
The Committee of Vice-Chancellors and Principals welcomed the news. Its case for better funding for higher education in the next spending review points to its role in the knowledge economy.
The Department of Trade and Industry this week revealed that just 4 per cent of UK innovating manufacturing and service enterprises saw universities and colleges as important sources of innovation. This compared with an average 5 per cent in the EU.
Mr Byers said that he wanted the DTI and the Department for Education and Employment to work more closely to help universities develop knowledge links.
Diana Warwick, chief executive of the CVCP, said: "This is something that higher education is equipped for and enthusiastic about taking forward."
An Institute for Public Policy Research study concluded that government should adopt a measure of university-industry links to run alongside the research and teaching quality assessment exercises.
But Mr Byers seemed to favour modifying the RAE. He said that he expected the funding councils' review of the RAE to address links between universities and industry.