Building stronger links with industry to enable students to leave university with skills employers want will be a focus of a new tertiary education strategy announced today.

The five-year programme aims to provide students with the skills needed in the workplace, and to help older workers improve their skills and education, Tertiary Education, Skills and Employment Minister Steven Joyce said.

Speaking at the Higher Education Summit in Auckland this morning, he set out six key priorities of the new strategy, which also include getting at-risk young people into careers, boosting achievement in Maori and Pasifika communities, strengthening research-based institutions, and growing international links.

"Our tertiary education sector must continue to adapt and change to provide the skills and qualifications New Zealanders will need to contribute in the labour market in innovative and competitive ways," Mr Joyce told the conference.

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The higher education sector must be more "outward facing'', he said, and interact more with business, communities and the world economy.

"The sector needs to move quickly to provide more opportunities for students in ICT, engineering, science and agriculture. There is an insatiable demand from employers for graduates in these disciplines as the economy grows," Mr Joyce said.

"While we have made important progress, we cannot afford to sit back and congratulate ourselves on the results so far. We must harness our momentum and ensure that the tertiary education system is contributing to better and more relevant outcomes for all."

The country needed more skilled and more qualified people, he said, but this would also be beneficial for the individuals themselves as "the world is becoming a more competitive place".

"We need a young person performing to their best so they can compete in what will only become a more competitive environment around the world in the 21st century."

Increasing the number of international students enrolled to New Zealand universities, not only helps the local economy, but helps push the Government's aim of improving trade and business links around the world, he said.

Mr Joyce also announced a change to the performance-based research fund (PBRF), which would bring it more in line with international practice, following a 2012/13 review.

The current "complex" system would see some changes to cut compliance costs and increase future research performance, he said.

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