The ability of institutions in Europe and Asia to attract and fund world-class research teams is cutting into America's monopoly on innovation in areas such as bioscience, discovers Martin Ince

North America's dominance of world higher education is disputed in the lower reaches of our tables, but it is beyond question at the upper level. The US has the world's top two universities by our reckoning - Harvard and the Massachusetts Institute of Technology, neighbours on the Charles River - and seven of the places in our top ten. Only the UK's Cambridge and Oxford universities and France's Ecole Polytechnique interrupt US domination of these top places.

Of course, there is more to North America than the US. In the top 50 are six Canadian institutions, twice as many as last year. McGill University, the most highly ranked, is 24th in the world, down from 21st in 2004. Up eight places each this year are the University of Toronto at 29 and the University of British Columbia at 38. Canada has eight of the top 200 world slots, one more than last year.

The promotion of Cambridge and Oxford to third and fourth positions in the World University Rankings and the improved performance of MIT have meant a decline in the relative standing of Berkeley, the University of California's most prestigious campus, set up in the 19th century as the West Coast's answer to Harvard.

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This table shows that quality US universities exist in many settings. Some, such as Harvard and MIT, are independent and gain the bulk of their income from student fees, research awards and fundraising. Institutions with this structure take 13 of the top 15 places.

The other US universities operating at this level are both part of the University of California, which is unique in being the higher level of two state universities alongside California State University. The success of this formula is evident in that five of its campuses appear in this North American top 50. Lower down, more orthodox state universities appear in numbers. These institutions are systematically less well funded than their private rivals because they have fewer high-profile research groups and charge lower fees than the big-name private universities.

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But this table does not exhibit the strength of another key group of US universities, the elite teaching-only colleges. These charge fees similar to those at better known private universities and tend to have a similarly elite student body. Despite the name, most have some research-active staff.

But they tend not to produce many cited papers or to have much of an international profile compared with universities undertaking more significant research. By contrast, Berkeley's high research profile means that it appears more prominently in these tables than in US national tables (such as those published by US News & World Report ) designed to help students choose universities. For the same reason, Harvard is prominent in such US tables but dominates them less than it does the World University Rankings.

At a time when confidence is returning to the US high-technology sector, these tables are rich in universities that nourished the IT revolution and are now getting involved in the next wave of technological advance in areas such as robotics and nanotechnology. Names prominent in these developments include MIT, Stanford University, the California Institute of Technology, the University of Texas and Carnegie Mellon University, along with campuses of the University of California. Many have sizeable war chests for this phase of expansion, not least because of donations from grateful alumni who profited from previous waves of high technology.

The big-name institutions monopolised the development of the microprocessor and all that came in its wake; but these rankings show that they will find it much tougher to keep control of the next phase of innovation.

The reluctance of the US Government to support research in areas close to human life, such as the use of stem cells, is only part of the picture.

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Ingenious US researchers are already finding ways around the Bush Administration's policies. A more serious threat is the growing ability of universities such as Cambridge and Oxford in the UK - and a number of Asian institutions in Korea, Singapore and elsewhere - to attract significant research groups in these areas and fund them at least as well as the US.

Over the next decade, the same may start to happen in China and a greater number of continental universities may adopt similar tactics. US universities may have produced the innovations needed to foster globalisation, but it does not follow that they will be the ones to benefit.

Stanford

Stanford University may be 250 years younger than its arch-rival, Harvard University, but it prefers to look forward rather than back.

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It is one of the world's leading research and teaching institutions and a pioneer of new technologies.

"There is no greater thrill than advancing the frontier of knowledge," said John Hennessy, the university's president.

Stanford, which emphasises collaboration across disciplines, has introduced multidisciplinary programmes in bioscience, international affairs and business.

In 1951, the university created America's first high-technology research park, and it has spun off an estimated 1,200 companies. These include Cisco Systems, Dolby Laboratories, eBay, Hewlett-Packard, Google, Sun Microsystems and Yahoo! - all companies that Stanford students and faculty helped to create.

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Its researchers invented the laser, the musical synthesiser, global positioning systems and IQ testing. They carried out the first heart-lung transplants in the US, discovered REM sleep and developed the technology that led to magnetic resonance imaging scans.

Jon Marcus