This question may sound provocative, but it is necessary.
Every transformation begins by reframing the question. Einstein noted that “it is theory that decides what we can observe,” and Heisenberg added that “what we observe is not nature itself, but nature exposed to our method of questioning.” Perhaps it is time to change the paradigm through which we look at universities and the questions we ask about them.
Traditionally, we have understood universities as academic institutions devoted to teaching, research, and human capital formation. They are that, and more.They widen equitable access to professional careers, enrich cultural life, and cultivate better-prepared citizens. Expanding access to higher education is a social achievement.
None of this is to deny their nature; rather, it is to recognize that, regardless of their institutional status, universities create value not for themselves but for society (with transformative impacts). That is why we should broaden our perspective: the shift carries profound economic, political, and social implications.
Overwhelming Evidence
A growing body of work (across countries, regions, and cities) points in the same direction: where universities are strong, economies are more innovative, productive, and resilient.
• Valero & Van Reenen (2019): about 15,000 universities across 1,500 regions in 78 countries. A 10% rise in university presence is linked to 0.4% higher GDP per capita (up to 0.7% in advanced economies). In the UK, Valero & Van Reenen (2016) estimate that opening one additional university is associated with 0.7% higher national income at a cost of 0.1% of GDP, with especially large gains in lagging regions. Complementing this, Marrocu, Paci & Usai (2022) show sizable long-run TFP gains from universities across Europe, transmitted through human and technological capital and distance-decaying spillovers, robust to institutional and agglomeration controls. At the urban scale, Peng & Xu (2024), using a panel of 239 cities, document that stronger university embeddedness in strategic city sectors boosts patenting, firm creation, and diversification.
• HIVE Report (2025): across 78 global education-and-innovation hubs, higher-education and research capacity are pre-existing, necessary conditions for innovation-economy emergence and scaling; author’s calculations (Times Higher Education World University Rankings (THE), CB Insights, Startup Genome) show that 82% of the world’s unicorns and 77% of total innovation-ecosystem value cluster in regions hosting THE Top 100 universities.
In many countries and regions, universities already operate as large, mature industries. They generate direct, indirect, and induced economic value; in many cases, international education is a leading export; and they sustain substantial employment (most notably in the UK, Australia, and Canada). Yet treating them as “national industries” on these grounds alone understates their systemic and structural role. A strategic industry is more than a source of income; it must meet additional requirements.
A sector is strategic when it exhibits strong inter-industry linkages; high innovation capacity and the production of transferable knowledge; a direct bearing on national autonomy and economic and technological security; the ability to sustain employment, value added, and structural transformation; and dynamic comparative advantages with credible integration into global value chains, alongside resilience to economic shocks and the capacity to reinvest and learn over time.
Seen in this light, universities not only meet these criteria; they often set the benchmark, though only under certain conditions. This reframes the conversation, with implications at three levels: (1) national and regional policy, (2) the new geoeconomy, and (3) universities themselves.
1. National and Regional Policies: From Expenditure to Strategic Investment
Recognizing universities as strategic industries completely changes how we act. They are no longer a budget line to be trimmed, but a strategic investment (enabled by public policy and public–private co-investment) in productivity, innovation, and social resilience.
As economist Mariana Mazzucato reminds us, the results of basic research are often long-term and frequently leveraged by the private sector. That is not a flaw; it is the engine of the innovation cycle. Between ideas and application, there is always a bridge (entrepreneurship), but the ultimate origin of knowledge must never be forgotten. Who could have imagined that a Stanford PhD dissertation would plant the seed of Google, one of the most influential companies of recent decades and a pillar of U.S. leadership in the digital economy?
Universities and research centers, through basic research, prospect for and discover ore deposits that, through applied research and development (in partnership with industry), are cut and polished into diamonds. From the internet to artificial intelligence to the mRNA vaccines that helped curb COVID-19, none would exist without basic research. The riskiest stage is exploration (far riskier than later stages of transformation), yet it is fundamental.
When a country treats its universities as a strategic industry, its entire logic of action changes: educational policy aligns with industrial policy, innovation becomes a state priority, and regional development shifts from assistance-based to productive. Above all, a shared narrative and a long-term vision emerge. Some nations have already made this transition: Singapore anchors its RIE2025 in the university system, with NUS and NTU leading national missions in AI, sustainability, and biotechnology; Germany embeds universities in its High-Tech Strategy 2025; China advances Double First-Class, turning universities into nodes of scientific sovereignty.
2. A New Geography of Growth
For decades, the United States built technological supremacy on the strength of its universities and research centers, attracting global talent. Today, China is replicating that strategy at speed. As Phil Baty (Times Higher Education) recently argued at the World Economic Forum, we are witnessing a major shift in the geopolitics of knowledge and innovation.
A geoeconomy of knowledge is emerging: power is exercised not through territory but through networks of talent, research, and innovation. In this context, the ability to generate, attract, and retain knowledge is no longer merely a matter of competitiveness; it is a matter of strategic autonomy. If the industrial centers of the 19th century arose where coal and steel were found, the centers of the 21st century flourish where talent, research, and innovation converge (with universities as anchor and driving force).
From Silicon Valley and Boston to London’s Golden Triangle, Beijing, the Guangdong–Hong Kong–Macao Greater Bay Area, New York, the Toronto–Waterloo corridor, Singapore, Sydney, and Berlin, leading hubs share the same DNA: a powerful (or rapidly rising) higher-education and research base.
This also opens opportunities for regions whose potential was previously constrained by a weak industrial base or limited natural resources. Investing in talent, knowledge, and innovation (through smart specialization, enabling conditions, articulation and connections with other education-and-innovation hubs, and coalitions grounded in a shared vision) creates opportunities for many regions.
3. Universities: Impacts Beyond Missions
Asking whether universities should be the strategic industries of the 21st century is not an act of self-congratulation. It is a call for greater responsibility and ambition, for universities to rethink their role, their purpose, and their model of governance. Fulfilling the missions of teaching and research, or even the so-called “third mission,” is no longer enough.
Most importantly, impact is not automatic; it emerges when universities and regions align talent, research-to-market, infrastructure and placemaking, entrepreneurship and capital, and governance around a shared cluster strategy (Parilla & Haskins, 2023, Brookings Metro).
The language should shift from defending missions to pursuing and demonstrating impacts (as Michael M. Crow, Arizona State University, has long argued in the “New American University” framework). That, in turn, calls for a new evaluation approach beyond rankings or academic metrics, to measure employment, innovation (output and adoption), social cohesion, and quality of life, in context.
Yet this remains uncommon: universities’ scorecards still rely heavily on academic results, research outputs, and reputation rather than real-world impacts, and policymakers often overlook transformational action and long-term regional effects. The aim is to complement, not replace, traditional metrics with verifiable impacts that capture what universities actually change in the economy and society, in their specific context and territory.
A Long-Term Vision
Senator Daniel Patrick Moynihan is often credited with saying: “If you want to build a great city, create a great university and wait 200 years.” He was right. Universities are the architecture of progress: every student, every research project, every idea planted today will transform the society of tomorrow. But we no longer have centuries (or even decades), because the pace of change has surpassed our capacity to adapt.
Reimagining universities as strategic industries is not rhetorical flourish. It is, returning to Einstein and Heisenberg, about changing the paradigm through which we perceive value, progress, and development in the 21st century. In the new geoeconomy of knowledge, universities are not peripheral institutions; they are the infrastructure of the future, shaping how nations create prosperity, autonomy, and shared progress.
This shift has operational implications: considering universities as strategic industries realigns three lenses at once: policy (from expenditure to strategic investment), economic development (within a new geography of growth driven by talent and research), and university governance (strategy, narrative, and performance evaluated by impacts, not just mission fulfillment, while remaining true to their ultimate purpose).
If universities exist to serve human progress, what is the one change you would prioritize—starting with purpose—to let them act as strategic industries?
