Abstract
The article discusses the problematic linkages between higher education and the development of a knowledge-based economy in Georgia. The main challenges, as identified through qualitative and quantitative research, are caused by, on the one hand, the lack of state’s long-term strategic vision of higher education development, insufficient funding of both education and research, and instrumentalization of the higher education system for political interests. On the other hand, however, the lack of awareness among industry representatives about their own role in supporting the commercialization of research further hinders the creation of a knowledge-based economy in Georgia.