Vince Cable opened his recent speech at Queen Mary, University of London on the future of government funding for science, research and innovation by saying that the outcome of the forthcoming spending review will "help to define what we value as a nation and the direction in which we want to head. Investing in science and research is a critical part of that."

As chair of the 1994 Group of universities, I welcome the business secretary's recognition that the sector is a key part of the UK's future.

There is, indeed, a fundamentally important role for universities in supporting a fragile post-recession economy. Universities develop a skilled and flexibly minded workforce to enable the UK to compete effectively in the global economy.

Innovative research generates new ideas that boost fast-growing, modern industries. The academy helps UK businesses achieve competitive advantage and reduce financial risk. Universities are often among the larger employers in their locality. They create jobs for 2.6 per cent of the UK workforce.

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The publication of the Times Higher Education World University Rankings last week was significant for many 1994 Group institutions, which, for the first time, made up 10 of the top 200 universities. Changes to the methodology that now prioritise measures of quality over volume of activity have led to a radical redistribution within the rankings.

There are, of course, many ways to rank achievement and the 1994 Group does not favour any one league table above another, but it seems right to me that quality should always outrank parameters driven purely by scale.

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Within a diverse global system, it is sometimes mistakenly assumed that the greater the size, the more effective the university. The 1994 Group strongly opposes such suggestions.

Evidence produced by the THE rankings is backed by the Higher Education Policy Institute in its March 2010 report Funding Selectivity, Concentration and Excellence - How Good Is the UK's Research?. This report shows that the research performance of the UK's medium-sized universities is excellent. There is clear evidence that outstanding achievements in research, teaching and the student experience are independent of size.

Yet faced with a Treasury that is seeking to reduce the higher education and research budgets by 25 per cent or more, the sector faces difficult challenges regarding the future distribution of resource. It must not fall into the simple trap of prizing scale over quality.

As we enter the final few weeks before the publication of the Comprehensive Spending Review, I suggest that Cable read and carefully consider the results of THE's rankings.

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The success of a diverse range of UK research-intensive universities shows that it would be wrong to cut investment in the research base or to artificially concentrate funding further into a very small number of institutions. In a challenging environment of cuts and uncertainty, the 1994 Group believes that university funding should prioritise maintaining quality, protect core funding and concentrate on departments demonstrating the highest levels of excellence.

All our research-intensive universities are world leaders that give us a competitive global advantage. The current levels of concentration, where 90 per cent of research funding goes to 38 universities, is key to enabling the UK to deliver truly world-leading research with the highest impact. Scientific innovation is driven by research quality, the proximity of the actors in the innovation system and the capacity to sustain long-term collaboration.

I hope Cable recognises the success story of the sector as a record of fact. The case for investing across the diversity of the academy is compelling and needs repeating constantly over the next few weeks. We must not allow the message to drift. We must simply not allow the sector to be seen as a cost subject to continuing "efficiency savings".

If the scale of cuts to the research base is large, the UK's capacity to recover will be slowed. We know that governments in the US, East Asia and parts of Europe are making plans to massively increase investments in research and higher education.

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Our government needs to develop a forward-looking policy and funding environment so leading UK universities can continue to compete with the world's best.

Get the funding wrong and there is a chance that the UK will be relegated to the role of a tier-two economy for a prolonged period.

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The Department for Business, Innovation and Skills presents itself as the "Department for Economic Growth". Cable's success in minimising the cuts to the research base will define the government's capacity to deliver a growth strategy in the medium term. Poorly targeted cuts to the higher education budget will be short-sighted and will have a big effect on the UK's international competitiveness.