Birmingham University has called for business and civic leaders to do more in helping it train and retain the skilled workers needed to ensure the city's future prosperity.
Vice principal Professor Michael Clarke said employers must develop better links with students and do more to keep their talent in the West Midlands.
Presently 67 per cent of graduates from Birmingham University leave the city after graduating, many of them heading for the capital and South-east.
Prof Clarke's comments came as the university unveiled a detailed study highlighting the institution's economic impact. The research, by the university's Centre for Urban and Regional Studies, found it generates more than £660 million for the city economy, rising to £780 million regionally each year.
But Prof Clarke claimed it was not being properly acknowledged and more needed to be done to stop a 'brain drain'.
"There is a major challenge for employers to build relationships with undergraduates here while they are students so when they enter the job market their instinct is to stay in the region," he said.
"We would like every student to have the opportunity during their time as a student to have a placement either in a place of work or in a voluntary activity or one kind or another."
He said it was also vital to ensure overseas students went back to their own country with a good impression of Birmingham so they would promote it to others, encouraging inward investment.
Speaking at the launch of the study, Prof Clarke said the research confirmed the massive socioeconomic importance of the university.
However, he added: "I think all of us in this university city, including the media, the general public and employers, have ignored the scale of the contribution the university has made to the city.
"We have all failed to make the most of it." Prof Clarke's criticism comes at a time of increased emphasis by the Government on higher education as a driving force of the knowledge-led economy.
Birmingham's business community last night defended itself from the criticism and claimed it was playing its part in shaping the city's future workforce.
John Lamb, spokesman for the Birmingham Chamber of Commerce, said: "It has been very high on the agenda of all business organisations in the city to stop this brain drain.
"We are very conscious a lot of people get excellent qualifications in the city and move on. There is a big programme in place to ensure that doesn't happen."
He added: "The business community is very keen to capture the talent, especially at a time when there is a recognised skills shortage.
"Birmingham's economy is changing from a reliance on manufacturing. Legal and financial elements are booming. New industries such as biochemical and high-tech electronics are increasingly important.
"We are making sure students and businesses are aware of what is available."
Birmingham City Council leader Mike Whitby said the local authority appreciated the "outstanding contribution" all three of the city's universities
made and supported their development. Birmingham University's economic impact report found the institution employs 1.2 per cent of the city's total workforce and generates more than one in ten of its new workers.
On top of the 6,000 people it directly employs, a further 8,300 jobs are created as a result of supplying services to the institution and its students. Nearly six out of every ten of Birmingham's workforce are educated to degree level or above.