In the high time of post-war nation-building in New Zealand and Australia (NZA), the purposes of university and government were closely joined. This was associated with the flowering of the modern university. The modern nationbuilding university is now experiencing a three way crisis brought on by the governmental retreat from nation-building, the stand-off between corporate and academic practices in the internal life of the university, and the problem of strategy in a globalising environment. In the global era national identity changes in character and potential but it remains salient. Indeed, national identity is crucial to an effective global role in higher education; suggesting that the optimal strategy is not for universities to detach themselves from national government (as market liberalism suggests) but to build a new alliance with government. Here the objective should not be to imitate American universities - a course of action bound to deliver modest returns - but to develop a distinctively NZA contribution to global higher education. Such a contribution would be grounded in the academic mission of the university, in its research and learning functions. Organisationally, instead of a stand-off between the academic and corporate cultures of the university, an effective synthesis between them would be developed.