A decade of strong investment in its universities has helped to secure the UK's reputation for providing world-class higher education and cutting-edge research, which acts as a powerful magnet for foreign investment.
The research taking place in our universities is looking into the technologies and industries that will change the face of society, the economy and how we live - key areas such as digital communications, low-carbon technologies and life sciences.
Our higher education institutions are in the enviable position of being number one or two in the world in the majority of research disciplines. We undertake 5 per cent of the world's scientific research with only 1 per cent of the world's population. And, despite fierce competition, we have the most productive research base within the Group of Eight top industrialised nations, producing more publications and citations per researcher and per pound of public funding than any of our major competitors.
The institutions' international reputation and presence is of great economic importance. In 2007-08, the income of UK higher education institutions topped £23 billion, an increase of more than 10 per cent on the previous year and a rise of 100 per cent since 1997-98.
As the high quality of our world-class research continues to attract major international investment from companies such as Pfizer, Microsoft and Roche, our universities in turn become hubs for the best minds from around the world.
During a recent trip to the US, it was clear to me that the UK's institutions continue to be well regarded in terms of educational and research excellence. And as I spoke with people at American institutions, it was also clear that they would continue to look to UK universities as preferential research partners.
However, having a reputation for excellence does not mean that we can sit back and wait for new international opportunities to come knocking on our door: following the recent billion-dollar investment in science and research made by President Barack Obama, our institutions have a real opportunity to prove their quality and reputation by looking for new collaborations.
Globally recognised quality
For further proof that UK higher education is among the top performers in the world, one needs only to look at the large number of international students who want to study at our universities.
Our global reputation in research is no doubt one of the many factors that help us attract such a large number of international students to our shores. Through offering a diverse range of qualifications and teaching methods, UK universities have successfully attracted the brightest from across the world to study here. In 2007-08, international students made up about 15 per cent of total students in UK institutions.
Out of all the students across the world who go abroad to study, 11.6 per cent choose to come to the UK. Only the US attracts more.
International students bring many benefits to the UK. They enhance the academic and cultural diversity of our campuses, contribute to our research capacity and provide an important source of revenue for institutions. It is estimated that they contribute more than £5.5 billion to the economy through the money they spend here and the fees they pay to institutions. And the benefits do not stop when they leave UK education. The potential to generate longer-term business, cultural, diplomatic and research links between the UK and students' home countries is limitless.
While the UK's success is a cause for celebration, it is important that complacency does not set in. Looking ahead, internationalisation needs to mean more than simply the recruitment of international students. For example, there is scope for increasing the network of institution-to-institution partnerships and collaborations, and for expanding the potential of online and distance learning as a major UK export. We must also not forget the importance of encouraging greater international mobility among our own students to ensure that they have the skills needed to succeed in a more globalised world.
The Government will soon publish a framework for the future shape of UK higher education over the next 10-15 years. Maintaining the global presence of our higher education system and its attractiveness to international students and researchers will be important elements of the document. The framework will make it clear that we remain absolutely committed to a higher education sector that prizes excellence of all kinds.
• Times Higher Education-QS World University Rankings 2009: full coverage and tables