Welsh higher education should move towards a more formal federal structure with greater central control, ministers have said.
There should be more formal alliances between teaching and research-led institutions, and a stronger single University of Wales identity and mission, according to Huw Lewis, the Welsh Assembly's deputy minister for education and lifelong learning.
Speaking at the Welsh Labour Party's conference last week, Mr Lewis said more central coordination of Welsh higher education would be one way of encouraging the sector to work towards common goals to benefit the Welsh economy.
This was one possible outcome of the assembly's review of higher education, he suggested.
While funding council proposals to merge Welsh universities had been shelved, there is growing support for moves to unite them through strategic alliances.
Mr Lewis said: "I think what we will see developing is some kind of strategic central coordination... There has to be a stronger federal identity and central drive."
Mr Lewis said such a move would help encourage more innovation and entrepreneurship in Wales.
The Welsh Development Agency last week announced the investment of £29 million this year to promote links between business and Welsh further and higher education. But researchers at Bangor University said they had found that Wales lags behind 22 other developed nations in entrepreneurial activity.
Dylan Jones-Evans, co-author of the research report published by Bangor's Centre for Enterprise and Regional Development, said universities had a key role to play in helping to boost innovation and entrepreneurship in Wales.
Mr Jones-Evans said institutions needed to cooperate to establish entrepreneurship as a key part of teaching programmes.