A body representing universities says the future quality of New Zealand's education and research is being jeopardised by unsustainable funding and an ageing academic workforce.
A report commissioned by Universities New Zealand says the country is facing a shortage of academic staff in the next 10 years.
It found the number of older academic staff is growing and is not being offset by an inflow of younger academics.
Universities New Zealand says the economy relies on a strong university system and needs to ensure it remains internationally competitive.
The organisation's chair, Derek McCormack, says lower funding is disadvantaging New Zealand universities because they're unable to compete with Australia and other countries to attract academic staff.
Mr McCormack says many New Zealand academics go to Australia but almost none go the other way.
"That just reflects the different attractiveness of the two systems to individual academics - lower pay in New Zealand, less money for research, less high quality research facilities available."