This research investigates the interdependence position between Research and Development (R&D) in the universities and R&D in the industry under the influence of global economy. R&D in both cases involve many activities related to knowledge creation and flows, and to product and service development. The main goal of this research is to examine the grade of interdependence between R&D in higher education and in the industry in the context of global economy. The sequence and the content of activities within the R&D are dependent on the nature and the on the promise of the organization where R&D is appropriate. The development maybe knowledge or production driven (science, technology, products, services, and results). The performance of R&D maybe measured against productivity scale, number of innovations, books written, or scientific publications, while industry’s performance depends on productivity, effectiveness and efficiency. The problem and the research question address the need for model development capable of introducing the drive to improve knowledge flows in two-directional relationship industry-higher education.