Tim Wilson has stepped down as vice-chancellor of the University of Hertfordshire, but he wants his former colleagues to be clear about one thing: "I am retiring, not expiring."

Reflecting on his decision to leave behind the pressurised life of a vice-chancellor, Sir Tim, who was knighted in the New Year Honours, was adamant that he was not leaving to take up gardening. "A vice-chancellor's job these days is 24-7, and I think most people who run universities recognise that you can only do it for so long," he said.

Sir Tim will keep his place on the board of the Higher Education Funding Council for England, and has just been appointed to a non-executive directorship of the student-accommodation developer Unite. The latter appointment chimes with the citation accompanying his knighthood, which was for services to higher education and business.

Vice-chancellors face unprecedented challenges in the coming months and years, with higher education in the UK undergoing its most significant shake-up for a generation.

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However, Sir Tim said he remained upbeat.

"It sounds corny, but new challenges provide new opportunities. It's a mindset - universities should look for opportunities, not dwell on problems."

Universities tend to underestimate their abilities, he argued. He said they forget that they belong to a sector that is "responsive, highly skilled, with incredible amounts of excellence".

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With this in mind, he encouraged them to guard against an overly "defensive" attitude and to try instead to turn events to their advantage.

"The university sector should have more confidence than we currently display. The challenges are there: we need to adapt to them and move forward because the status quo is clearly not an option for the future."

One area that Sir Tim believes is a big untold success story is the link between universities and their local communities. "The connection between universities and place is so important," he said.

"Very often, the economic contribution of institutions is measured by how much we spend and it should not be, although that is part of it.

"We're encouraging the growth of the local economy by enhancing skills, by the use of applied research, by the contribution we make to the intellectual and therefore the economic infrastructure of our communities and also the volume of highly skilled people we are putting into public service."

He said that of all the things he had done in his two decades at Hertfordshire, he was most proud of its role in regenerating the local economy in the Welwyn and Hatfield area. The area used to rely heavily on British Aerospace, and its unemployment rate rocketed from 1 per cent to 17 per cent when the company ceased operations there in 1992.

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"It just tore the heart out of the local economy," Sir Tim recalled.

Among the initiatives launched to tackle the crisis, the university helped establish a business park, which is now home to major employers including Ocado and T-Mobile.

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"That regeneration is something we can all be very proud of at Hertfordshire," he said.

Horses for courses

While academic purists may be sniffy about its "business-facing" mission, Sir Tim said that this had given the university the focus required to help its local economy.

However, he acknowledged that not all universities could adopt the model, emphasising the importance of diversity within the academy.

"I've been saying for some time that we need to have a differentiated sector," he said. "Hertfordshire has focused on the business-facing agenda, the enterprise agenda, the entrepreneurial agenda. That's where we are. That doesn't mean that every university should be like us. Universities should play to their talents and skills and identify their own domain and activity."

He also warned institutions to discount any notion of a "comfort zone", which he said was always an "artificial environment", and argued that the raft of government policies to overhaul university funding had prompted an unhealthy level of introspection.

"We need to start looking outside ourselves and think about the sector as part of this wider society and larger community," he said. "Universities in the 21st century really are pillars of society. We are no longer on the fringes of education policy; we are at the heart of economic and social policy, and that's where we have to be.

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"If we get too introspective and lose that vision and that capability of understanding the contribution we make, the sector will be poorer for it."

sarah.cunnane@tsleducation.com.