UK universities must undergo big reforms to unlock high-paying technical and professional jobs for the "forgotten 50%" of young people, according to Labour's shadow universities minister.
Liam Byrne warned that unless Britain gets smarter as a country, it will get poorer.
"The choice in higher education is now clear. Watch the university system slowly go bust and lose its place as a global science leader, or choose a different path," said Byrne.
"To escape this government's cost of living crisis, we've got to build a bigger knowledge economy, home to better-paid jobs and open to anyone with talent no matter whether they want an academic or a technical path in life."
The MP set out options for reform of the UK's universities in a pamphlet, Robbins Rebooted, published by the Social Market Foundation thinktank.
But a source close to the situation told IBTimes UK that Byrne's ideas do not make up official Labour Party university policy, which is expected later this year.
The debating points draw together hundreds of conversations Byrne organised with university and college leaders, academics and students over the last six months in Britain, Europe, India and China.
Among other things, he suggested a "revolution in links" between colleges and universities based on the US-style community college movement.
Byrne also mooted a big increase in university enterprise zones to better link universities to regional growth as well as a "new revolution" in access to higher education, with a national advice service to support young people.
"Our universities are absolutely vital to the economy and our standing on the global stage," said Sally Hunt, general secretary of the University and College Union.
"While there is never a shortage of warm words from politicians of all stripes when it comes to universities and their achievements, warm words alone will not maintain our proud record.
"We need all parties to clearly set out how they will fund their proposals for one of the most important areas of our economy."
The announcement comes after Labour Party leader Ed Miliband said a Labour government would introduce new technical degrees for the "50%" of young people who do not want to pursue a traditional academic route.
Miliband, speaking at the Sutton Trust and Pearson Higher Ambitions Summit, said the move would be backed by some of the UK's biggest businesses and universities to meet the needs of the economy.
The Department for Business, Innovation and Skills had not responded to a request for comment at the time of publication.