Councillor Marc Jones, who leads the Plaid Cymru group on Wrexham council, said:
"We're fortunate in having Glyndwr University in Wrexham, which has developed a reputation for research excellence in areas such high-end telescope technology as well as aeronautical expertise.
"This kind of research and expertise has spin-offs in terms of skilled work both within the education sector and the wider world of employment. That's essential if Wales is to move on from being a low-wage economy to being a 21st Century economy with a skilled workforce and research-driven industries.
"That can only happen with the right investment and that's where Welsh universities are losing out. There are seven research councils in the UK funding specialist work in this field and Wales is losing out. For example, out of £700 million spent by the Medical Research Council last year, just 2.2% was spent in Wales.
"These research councils are not subject to a fair funding mechanism that would enable Wales to get its fair share of the money available."
He said the current allocation of UK spending in Wales was through the Barnett Formula. This allocates 5.6% of central government spending to Wales, which recent reports had demonstrated was inadequate.
Cllr Jones added:
"If the Medical Research Council’s money alone was subject to the Barnett formula, which is widely held to understate the needs of Wales, we would receive 5.6% of the total spend - that's £40 million last year alone. Compare that with the £60 million annual deficit that Welsh universities recently told the Welsh Affairs Select Committee that they face. We need fairness in allocating this funding or our Universities won’t be able to do serious research at all.
"The need for fair funding for research is urgent. Glyndwr, like all our Welsh universities, is fighting against a system that rewards previous success and responds to priorities that aren’t necessarily reflecting the needs of the local economy.
"This month saw the Welsh Government’s Economic Development Strategy being unveiled by Plaid's Ieuan Wyn Jones. It has some important things to say about the failure of past Labour administrations to jumpstart our economy.
"It also makes a break with previous strategies by focusing on funding research and development. But the publication of the strategy also throws into relief the tiny share of UK research council spending that our Universities receive.
"Wales has some cutting-edge hi-tech companies but we need to see more so that we create quality well-paid jobs for future generations."