Only robust policies and funding will ensure a sustainable sector, says John Brooks. UK universities have a critical role to play in the development of the post-industrial knowledge-based economy. But do we have the right policy frameworks and funding strategies to ensure a vibrant and sustainable higher education sector?

Universities face an uncertain future. The year 2020 is the horizon towards which most vice-chancellors are trying to chart a course, and yet our vision is far from clear. We think we understand demography yet are uncertain about the direct impact on recruitment. We see a number of changes to education, including the imminent arrival of diplomas and young people making fundamental choices at the age of 13 that could set either an academic or a vocational career path.

We have been part of a huge expansion and diversification of the sector as we move towards 50 per cent participation. This has resulted in new universities with their plans for growth, the arrival of new private- sector universities with clear commercial objectives and, in the near future, giving foundation degree-awarding powers to further education colleges. And all this just as demography starts to bite. But are higher skills the solution?

The Leitch report has correctly identified the new priority of higher skills within the workforce as being critical if UK plc is to compete in the global knowledge economy. The UK's great industrial regions prospered in the Industrial Revolution, and much of our local and educational structure was funded by the efforts of the working class. We can no longer compete in manufacturing on the basis of price alone and must seek to exploit advantage from the quality of our design and the creativity of our innovation. The post-industrial knowledge revolution and all its complex consequences are the real challenges.

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In Manchester, the textile industry has been replaced by England's largest financial sector outside London, employing 210,000 people. The other area of significant growth is in the much maligned "creative industries". Suddenly the previously scorned media courses are seen as a vital element in the support for the BBC's mediacity:uk and the transformation of Salford Quays into a centre for TV, media and creativity. Similar changes are happening in all our city regions as we transform our knowledge economy and we liberate our knowledge workers.

In the new knowledge economy supply chain it is clear that universities have two distinct but strongly correlated roles: to help to create the new "knowledge" and to help to train the new "knowledge workers". My experience of supporting the creative and knowledge-based industries is that the assumed linear model of knowledge transfer does not apply and that the creation of knowledge and the support for invention is more complex and less predictable. As we attempt to locate our 2020 vision for universities at the heart of a true knowledge revolution we must acknowledge the changing nature of knowledge, the new definition of communities of learners no longer physically bound and the new economies of knowledge and learning.

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At Manchester Metropolitan University we have recognised our central role in supporting the city region but also believe that we have a national and international part to play - for that is increasingly the nature of knowledge. Our duty is to ensure that world-class knowledge and ideas, and world-class knowledge workers, are drawn together to fuel Manchester's re- energised economy. However, we do not support the polarisation of research and strongly encourage research that is of, and for, our region and that informs our curriculum.

This is not a change of direction for Manchester Met but a re-emphasis of the values of a vocationally focused professional university that views the employability of its graduates and postgraduates as a top priority. The transformation for Manchester Met has been the growth of academic enterprise and the development of enterprise curricula.

Returning to policies and funding, I remain unconvinced that there is a fully joined-up approach to skills and higher skills development. While the new diplomas will change the balance of 14-19 provision, and the development of new employer-led foundation degrees will fill a perceived gap in provision, do we have confidence that the higher skill needs of the workforce will be identified by the Sector Skills Councils, funded strategically by employers and developed and delivered by universities? If Leitch is right, and our future economic performance depends critically on us getting this right, then I would prefer to see a rather less serendipitous approach emerge.

John Brooks is vice-chancellor of Manchester Metropolitan University.

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