By 2050, in a world fluid in every way, there will have emerged a small set of worldwide “idea capitals”—centers of intellectual, cultural and educational activity (what I call the “ICE” economy) that will be both the engines of creativity, entrepreneurship and economic activity and magnets for those who will drive these centers to even higher levels of achievement.

Will New York be one of them? The answer turns on how well our leaders grasp the challenges they face, the assets they possess, and the strategic context in which they are operating.

Idea capitals will be defined by very human elements. Universities see this every day as they seek to attract and retain faculty: The most intellectually energetic scholars want to live in an environment that is as alive as they are; a leading genomicist wants to talk not only to other great genomicists but also to great philosophers, political scientists and artists, and to listen to a great orchestra and attend great plays.

What is true for faculty is true for the core personnel in any “talent enterprise.” From biotech to hedge-fund management, the existence of industry-specific advantages will be necessary but not sufficient to attract businesses and the talented people they need. A workforce with relevant skills and government inducements to businesses are important tactical elements in building tomorrow’s economic centers, but only tactical. Workforces are mobile, and inducements can be trumped by greater inducements elsewhere. Ultimately, the determinative strategic element in building an “idea capital” will be the quality of its ICE sector.

And here is the insight increasingly grasped by leaders around the world: Research universities will be principal incubators and drivers of the ICE sector. Universities attract and retain the innovators and entrepreneurs who undergird the knowledge economy. Great universities produce ideas and attract people who both perform and consume the array of intellectual, cultural and educational activities that will characterize the world’s idea capitals.

Happily, New York enjoys a preeminent position both in higher education and in the other elements of the ICE sector, providing a strong base upon which to build. Our state is home to 14 of our nation’s top 100 colleges and universities, more than any other state except California. Six New York universities are among our nation’s top 50 research medical centers. As a result, New York is the top destination for new undergraduates leaving their home state for college. From science to economics, from law to the arts, New York’s great universities are a vital asset to ensure its place in the world.

But securing a place for New York as an idea capital won’t just happen. It will require a new compact between the state, the city, the private and public universities and the K-12 system.

It will require building a K-12 system that will be one of the reasons talented people are drawn to New York, and not be a reason for them to hesitate.

It will require massive investment to maintain and enhance excellence across our great universities (and not just in science) and the political will and discipline to gear it to solidifying New York as an idea capital.

It will require an honest assessment of the strengths and potential of our universities, public and private, so that we can make wise, quality-based investments. Right now, the strongest element in New York’s higher-education picture is the private universities and colleges; two-thirds of the degrees granted in New York are from the privates, only one-third from the publics (SUNY and CUNY). We must take account of this reality as we clarify each sector’s role.

It will require a compact between the public and the private universities, a blended effort to reduce the scramble for resources not only by expanding the pool of money but also by insisting upon collaborations that will use existing pockets of excellence to cultivate new ones. I envision a program in which, say, a private institution that receives a competitive state grant might be required to form a partnership with a counterpart at a public institution, with the principal actor receiving perhaps 70 percent of the grant and the collaborator receiving 30 percent.

It will require far more, and far more thoughtful, student aid, expanding access to higher education for talented students and retaining their talent for our state—for example, a loan-forgiveness program for those who commit to remaining in New York for at least five years after graduation.

None of this selective, meritocratic investment need compromise the important goal of expanding access to higher education, and both the public and private universities of our state have embraced that goal with great success. Idea capitals must be centers of human creativity at the highest level, enabling each citizen to optimize his or her potential.

Thankfully, there is evidence that New York’s leaders see the strategic view. Mayor Bloomberg is pressing “PlaNYC 2030,” which at its core realizes that the strategic advantage of the city is its intellectual, cultural and educational strength. And Governor Spitzer has convened a commission to discuss a higher-education strategy for our state, and has made clear that he sees the centrality of higher education to ensuring New York’s position as one of the world’s idea capitals.

In ways hard to appreciate in our immediate-gratification-by-quarterly-return society, whether these commendable efforts succeed in galvanizing bolder, wiser and greater investment in higher education will determine the kind of society and standards of living enjoyed by our grandchildren—and whether New York leads the world or follows.

John Sexton is president of N.Y.U., a member of Governor Spitzer’s New York State Commission on Higher Education, and the chair of the Commission on Independent Colleges and Universities in New York. He served as chair of the Board of the Federal Reserve Bank of New York from January 2003 to January 2007.