The University of Bologna, which received its charter from Frederick I Barbarossa in 1158, was probably the first university founded in theWestern world. It became a renowned home to scholars of great distinction in both the sciences and the humanities.

The Times Higher Education-QS World University Rankings survey was published this week. It rates the performance of universities according to the quality of their research, the employment rates of graduates and their international profile. The University of Bologna does not feature in the top 100.

In developed economies that trade on brain power, it is vital that advances to our knowledge forged in the universities are transferred into use and exploited commercially. The idea of the knowledge economy requires a strong higher education sector.

And at a time of otherwise unrelieved economic gloom, there is here a small cause for celebration. Of the top ten universities in the world, four are in the United Kingdom. The UK has 17 in the top 100 and only the United States, with 37 and an enormously larger population, has more. This country has more entrants in the top 50 than the whole of the rest of Europe put together.

The practical and commercial benefits are legion. MRI scanning; unlocking the double helix structure of DNA; keyhole surgery; the portable defibrillator; the hepatitis B vaccine - all are discoveries with profound consequences, all are the products of British university science departments.

The prospects are even more exciting. In-situ diagnostics will permit us to arrest some diseases before clinical symptoms even appear. DNA vaccines for Aids, malaria, hepatitis B and some cancers are now in clinical trials and could be available in five to ten years. Advances in our understanding of brain functions will produce a better understanding of degenerative conditions such as dementia.

This is an impressive picture. For all the battles over funding, the United Kingdom remains a centre of world renown for higher education. But, as ever, complacency is inadvisable.

The changes to the rankings lower down the list are intriguing heralds of the economic future. There are now 13 Asian universities in the top 100. The University of Hong Kong and the National University of Seoul have both made the top 50 for the first time. Delhi and Bombay are new entrants to the top 200 which now has universities from 33 countries. Even Russia is back in the rankings with Moscow State University, after 15 years of educational freefall in which entry too often depended on deep pockets.

Already, India educates more graduates than all of Europe; 350,000 Indian engineers come on to the market every year. Chinese research and development have been rising by 20 per cent a year over the past five years. Indian research and development have trebled in a decade.

This is all good reason to uphold the higher education sector in this country. The funding settlement will not hold for long. The cap on fees will have to be lifted. But if there is a warning here to the UK, it is so much starker to the rest of Europe. The money will follow wherever the knowledge goes. And that is no longer to Bologna.