Universities generate almost £100 billion a year for the UK economy, according to a report.
Higher education institutions also support nearly a million jobs, equivalent to around three percent of all UK employment, it says.
University leaders said the study showed the "huge and increasingly significant" impact universities have on the UK economy and jobs, and warned that higher education should not be "taken for granted".
The report comes at a time when higher education is under growing pressure amid concerns about issues such as spiralling pay for university chiefs and debates over whether students are getting value for money from their £9,250 tuition fees.
The study, published by vice-chancellors' group Universities UK (UUK), found that in 2014-15 UK institutions, along with their international students and visitors, generated £95 billion.
This includes things such as funds generated by links with businesses, research and money spent by staff and students in the local area.
The figure accounts for 2.9% of all economic activity generated in the UK in 2014-15, the report says, and means that around £1 in every £34 of UK GDP can be attributed to the activities of universities and their international students' and visitors' expenditure.
In addition, universities, their international students and visitors supported more than 940,000 UK jobs. This includes not just staff and students but other local workers who indirectly work with institutions, such as cleaners, taxi drivers and construction workers.
A breakdown of the statistics show that universities contributed around £21.5 billion to the economy through their own day-to-day operations alone, while international students, including on and off-campus spending and that of their visitors, generated £25.8 billion.
The report says: "Universities employ thousands of staff throughout the country and through their direct activities they generate and deliver taxes to the Exchequer.
"But on top of this, they also have an important part to play in supporting a wide range of industries - their supply chains stretch far and wide supporting GDP and jobs, as the impact ripples through the economy.
"In the wider consumer economy, the presence of universities is strongly felt as their own staff and employees within their supply chains all spend money on retail, accommodation, leisure and transport, as do international students and visitors to those students."
UUK president Professor Janet Beer said: "This study highlights the huge and increasingly significant impact that universities have on the UK economy and jobs.
"Universities are often the largest employers in their area and, through links with businesses and in attracting students from overseas, they bring in significant investment from around the world to all the UK's nations and regions," she said.
"The knock-on impact of universities on local businesses and jobs has supported the regeneration of many deprived towns and cities."
She added: "There are few sectors in the UK that can be described as truly world-leading, so it is important that the success of higher education is not taken for granted.
"Universities face many challenges, including increased global competition, uncertainty over student funding and the potential impact of Brexit. This report is a timely reminder to policymakers of the increasing economic, social and cultural impact of universities on their local communities."
Universities minister Jo Johnson said: "England's universities have a vital role to play in generating the knowledge and skills needed to fuel our economy. They are a great national asset, but there can be no room for complacency.
"Our universities need to find a new gear in their engagement with business, so that we maximise the value of record levels of public investment in research and development, and embrace the greater accountability our reforms are putting in place for the quality of teaching and student outcomes."