After Scottish higher education's disappointment with this year's funding settlement, the convener-elect of Universities Scotland might be expected to be downbeat.
"The whole of the UK sector faces challenges because of the fiscal position, and there's no doubt that universities will have to fight hard for additional resources," he said. "They will have to make a case, which I think is a very strong one, to be at the head of the queue."
Universities Scotland is already working with the Government through the higher education task force to map out the sector's future. And while Scottish higher education is very diverse, its relatively small size has let it avoid England's fragmentation into mission groups.
"We are able to sit round a single table and provide a common line on what the sector can bring to the Scottish Government's strategy, which is primarily economic. There's no doubt that a necessary condition of economic success is to have a thriving higher education sector. That's why I feel optimistic," said Professor Muscatelli, himself an economist.
Asked whether he shares the fears that Scotland is being disadvantaged by not having an income stream from top-up tuition fees, Professor Muscatelli sidestepped the question, arguing that funding models are a social and political choice and that it is not for Universities Scotland to take a position on levels of public or private funding.
But he added that the English model of fees is atypical among countries in the Organisation for Economic Development and Co-operation. The US enjoys a higher level of support as a percentage of gross domestic product. And he pointed to the Nordic model, in which the vast majority of support comes from the public purse.
"But if you're asking me as an economist, I really do believe in the public value of education. Having an accessible system is important."
Professor Muscatelli was born in Italy, and he lived there and in the Netherlands before his parents moved to Scotland when he was 12. He studied economics at the University of Glasgow and planned to go into management. But although he was only 22, without a doctorate, the economics department offered him a one-year lectureship, suggesting that it would give him a taste of academic life. "Once I'd been there for a year, I was hooked," he said.
By 30, he had a chair, later becoming dean of social science and vice-principal. He moved to Heriot-Watt last February, aged 45.
"What attracted me was that it was so different from a broad civic university like Glasgow, focused on business and technology, with very different issues and interests."
He also saw enormous potential in it. "To me, it was a bit of a hidden jewel. It's got areas of world renown - petroleum engineering, photonics, actuarial and financial mathematics - and I think there are other areas of real potential."
Professor Muscatelli has just launched a strategic plan that aims to raise £3 million annually, starting in the coming academic year. The plan will include a voluntary severance scheme, but he stressed that it was about building up the university - the equivalent of 20 full-time academics will be hired annually over the next ten years to reach a total of 660 staff.
"It's so important for universities, given the number worldwide, to be able to explain what it is they offer that's distinctive.
"The task I have set myself is to put Heriot-Watt more prominently on the map. You can be the best university in the world, but if nobody knows about it, that doesn't matter," he said.