We have a compelling case for investment: it's time to make it

2010 will be an important year for higher education. There will be concerns about post-election education and research policies, the UK's public deficit will be a drag on the economy, and the financial sustainability of the academy will be wafer thin. These issues will converge and the outcome will determine the sector's trajectory for some time.

In all of this, there is an important role for universities in supporting a fragile post-recession economy. The case for investing in the academy is compelling and needs to be made repeatedly over the next 12 months. The alternative is to allow the sector to be seen as a cost subject to continuing "efficiency savings".

Universities play a major role in developing 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.

By whichever measure you choose, its contribution to the economy is impressive and vital. A recent Universities UK report highlights both the huge economic contribution of higher education and its outstanding success in generating economic impact. It shows that universities contributed about £59 billion to the economy in 2008, directly employed nearly 315,000 full-time staff and generated a further 324,000 jobs. They directly spent £23 billion and fuelled an additional £32 billion of output through their knock-on effects on other industries. In total, the output of universities represented 2.3 per cent of gross domestic product in 2008 - comparable to computing services or the recreational service sector. The academy is one of the UK's most valuable assets and central to future growth.

Universities are already one of the UK's most successful export industries, generating annual earnings of £5.3 billion through a combination of fees and the substantial contribution from off-campus spending by international students and visitors. Higher education outstrips alcoholic drinks, the cultural and media industries and many others as a source of export income.

The sector has provided an excellent return on public investment; however, it would be dangerous to centre the economic case for investing in it only on past performance. With the right support, the academy's economic contribution has the capacity for further rapid growth. Investment would allow universities to realise their full economic potential and drive new growth. Many of the fastest-growing sectors in both the UK and global economy are closely linked to areas of recent research. Our universities are delivering innovative world-leading work to drive emergent sectors such as green energy, digital technologies, business leadership and healthcare services. Investment would boost these fast-growing, high-potential areas.

Education-service exports represent one of the UK's biggest opportunities. More than 340,000 foreign students are already registered at UK institutions; with the right investment, this could double over the next two decades as demand grows. To seize this opportunity, investment is needed to maintain a quality teaching environment and build our global competitive advantage to combat the stimulus investment in research and education made by many competitor nations.

Despite the pressures on state finances, politicians should invest in the academy. Last month's ComRes poll on university funding, commissioned by the 1994 Group, shows that 86 per cent of the public back such investment.

About a third of MPs represent constituencies that contain or border a university, and they are often among the larger employers in their locality. They create jobs, directly or indirectly, for 2.6 per cent of the entire UK workforce.

Our universities drive positive social change that benefits individuals, the nation and the world. By investing in their research, we can make great strides towards solutions to global and national challenges such as combating climate change, improving health and wellbeing and building global security.

The rising demand for higher education, with last year's applications at record levels, shows that Britons recognise the benefits a university experience delivers in terms of enhanced life opportunities and earning prospects. Universities are committed to widening opportunities for students from all backgrounds, but need investment to maintain quality while expanding to meet the demand.

Any further cuts to the higher education budget would be a short-sighted move that would be bad for the economy and bad for the people. The case for investment is compelling. As members of the higher education sector we have a responsibility to make this case - loud and clear and now.