The Government wants tertiary institutions to work more closely with industry, attract more international students and get better results for young people at risk.
The goals are among the priorities in a draft tertiary education strategy launched on Wednesday.
The five year strategy calls for tertiary institutions to tailor their qualifications and their research to better reflect the needs of businesses.
It also aims to get more at-risk young people in jobs, improve adult literacy and numeracy and strengthen research.
Consultation on the strategy closes in six weeks.