Introduction Saudi Arabia has been an epitome of an oil-dependent state for decades. While the governments’ first attempts to diversify the economy date back to the 1970s, these plans were never realized. Only the economic challenges and development of new technologies in the early 21st century forced a major shift in Saudi economy priorities. Since King Abdullah’s ascension to the throne, the new government has been consistently working towards developing a modern knowledge-based economy, which would reduce the country’s dependency on the oil industry. The drop in oil prices in the last decade reinforced the commitment of the government to the reforms. The recently proposed Saudi Vision 2030 framework is dedicated to the development of a diversified, sustainable economy. The knowledge economy concept stems from the widely accepted idea that knowledge is crucial to increasing productivity. Hence, investment in education should be considered the main driving force behind economic progress. The foundation of King Abdullah University of Science and Technology (KAUST) has marked the beginning of a new era in Saudi education. KAUST offered unprecedented opportunities for studying and research, aiming to compete with the best universities in the world. Moreover, the Saudi government recognized that current civil law could limit the development of the project, and de facto made the university a liberal enclave within Saudi territory, guided by its own set of rules. The sole purpose of massive investments in KAUST and the relaxation of the law was to ensure the success of the Saudi economy in the future. However, more than ten years later, scholars still argue whether KAUST can be considered a successful investment. The purpose of this paper is to analyze the contribution of KAUST to the Saudi economy in light of Saudi Vision 2030 and suggest ideas to help fully utilize its potential. The Knowledge-Economy Knowledge has always been an essential element of a healthy economy. Rapid technological progress reinforced the importance of knowledge and innovation in the late 20th – early 21st century and marked the beginning of the era of the knowledge-based economy. Research shows that between 1995 and 2005, high-knowledge industries generated significantly more jobs than low-knowledge areas in the EU and the US (Parcero & Ryan, 2016). While scholars offer slightly different definitions of the knowledge economy, most agree that education, innovation, and information and communication systems determine its efficiency (Parcero & Ryan, 2016). The quality of education and research facilities at KAUST is second to none in Saudi Arabia. Hence, it is safe to assume that KAUST should play a pivotal role in developing a knowledge-based economy in the country. Innovation Innovation factor is crucial to knowledge economies, and over the past decade, KAUST has gained recognition as a leading research institution in the Middle East. Some of the innovation indicators are scholarly articles and research collaborations with businesses (Parcero & Ryan, 2016). In less than ten years, KAUST has produced more than 4000 publications and partnered with numerous major international corporations, including Boeing and IBM (Alhoian, 2018). Research on solar ener