The entire third-level sector is facing into a more complex and competitive era in which colleges may have to live with less money and learn to specialise more, a senior education figure has warned.
Dr Don Thornhill, chairman of the Higher Education Authority (HEA), said the emphasis was shifting from getting as many students as possible into third level towards a period in which Irish colleges would face serious international competition.
Speaking at an OECD conference in Paris, he said public spending was likely to be more constrained in the next few years and higher education institutions would not be unaffected by this "change in the economic outlook".
He said that already at leadership level within Irish colleges there was a growing awareness of the increasingly competitive and demanding environment.
The HEA is a statutory body that advises the Minister for Education and the Government on higher-education policy. It also acts as a "buffer body" for State funding of universities. Dr Thornhill is regarded as one of the most influential figures in the third-level sector.
He said that in addition to challenges in the area of funding and research, the impact of a falling student population would also be felt.
The "remarkable" response of third-level institutions to the Programme for Research in Third-Level Institutions showed a willingness to co-operate and develop niche areas of research.
He said that in future, core funding for third-level colleges should remain primarily based on student numbers. But a portion should also be based on performance.
Performance in this context, he said, would be connected to "public policy objectives", for example making sure students did not drop out of college.