Expectations of students and employers would change as educational providers begin to reach out across the globe. "We could lose out very badly in this," Professor Johnston said.
Large corporations such as Lucas and British Aerospace were setting up their own universities, emulating the United States where 4,000 companies have struck out on their own.
Vastly more knowledge is created through company research departments and vastly more information is held on the Internet. Old notions of universities as guardians of academic freedom and safeguards of democracy have gone.
Professor Johnston believed students in the knowledge-based economy of the new millennium would primarily have to be skilled at using new technology and analysing information. "We are not doing that," he said.
Most higher education provision is based around single subjects and not in the multidisciplinary teams demanded by employers. Internet universities would allow students to develop their own content. "What does a subject mean when you can access anything any time?" he asked.
In 10 to 15 years, Professor Johnston believes, the number of leading curriculum and software experts will be reduced across the world to fewer than 500. "That's a bit stunning for the academic community," he said.
Staff could become "learner managers", helping students use computer packages and finding the best sources of 24-hour support. Interactive software would threaten the role of lecturers.
The conventional pattern of moving away from home to study would also come under pressure, with counselling and support coming through new technology.
Professor Johnston argued that institutions and schools had been slow to recognise the impending changes.
"Go into the average office, almost everyone is at a work station," he said. "Go into the average school or university, most people are not.
"We won't begin to address the potential until every pupil and every student is working off the work station the whole time."