Industry leaders have warned that new jobs will go to other countries if there is a lack of skilled workers in Britain with higher education qualifications.
The news comes as the University and College Union (UCU) urged the Government to invest more in higher education to help the country out of recession.
It says there is a danger that unless the UK produces more highly-skilled workers it risks losing jobs abroad and the chance to build a competitive advantage in new, low-carbon industries.
The UCU is concerned that the number of applications to universities has decreased by 7.7% compared with this time last year.
A drain of highly skilled jobs to emerging markets is feared
Nissan employs graduates at its plant in Sunderland and the company's vice-president for Europe, Jerry Hardcastle, said investing in higher education is essential if jobs are to remain in the UK.
"In India, they are churning out hundreds of thousands of graduates and we are churning out a small number and that will restrict our ability to expand," Mr Hardcastle said.
"If they're not available here, the jobs will move to India, Brazil and China."
Manchester University School of Mechanical, Aerospace and Civil Engineeringundergraduates have found that despite the recession, they are in demand in the work place.
Tabitha Brayshaw, who has just finished the final exams of a four-year masters degree in mechanical engineering, told Sky News: "I was quite worried about jobs and applied early but by March I had already received several interviews.
Countries such as China and India have high graduate outputs for factories
"I was offered two jobs and have accepted a job at Jaguar Landrover. I'm very excited about it."
Meanwhile, second year aerospace engineering undergraduate Benjamin Mohankumar said he has already been offered the chance of an internship at Shell.
A new report by the Institute for Public Policy Research (IPPR)has sought to show the long-term economic benefit to the country of higher education.
The IPPR study found the cost to the Government of someone studying three A levels and a degree is £25,000, but over the course of their life that graduate will pay an average £227,000 to the Exchequer.
However, the UCU said young people have been put off higher education by the increase in student tuition fees and the cut in university places.
UK students have protested against rising tuition fees
It also said the scrapping ofEducation Maintenance Allowance has made it more difficult for young people to go to college.
The UCU points out that the UK currently invests just 1.7% of public expenditure on tertiary education, compared to 2.3% in France, 2.8% in Germany, 3.2% in the USA and the OECD average of 3.0%.
The UCU general secretary Sally Hunt said: "With 80% of new jobs by 2020 likely to be professional or technical, the UK must invest now in the next generation or risk losing out in the race for economic growth.
"This research highlights the folly of reducing public investment in our colleges and universities.
"Instead of cutting places and making it more expensive to study, ministers need a strategy which harnesses further and higher education to provide a window of opportunity for the next generation."
Source: Becky Johnson, News.sky.com, Saturday 9th June 2012
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