Abstract
For a long time collaboration between Universities and industry has been existed, but the rapid increase of global knowledge has strengthened the demand for strategic relationships that go beyond the conventional funding of research projects. The role of the university's research should be developed in the coming centuries to play an important role in industrial and in turn economic growth. To make the chemistry work, both sides should overcome the communications and the cultural divide that tends to impair university -industry relationships of all categories and undercut their potential. Faculty of Engineering Rabigh (FER) is strategically located around major industries and facilities like Petro Rabigh, desalination plant, steel fabrication and cement industries. This makes FER a nucleus to solve technological problems for all these industries. A number of efforts have been made at FER to collaborate with these industries by mutual reciprocal visits of university and industry personnel as well as student internships. It is aimed to solve short term and long term technological issues at the industrial units. This will not help the local knowledge base and skills to improve but bring confidence and trust between two partners. It is to be remembered that innovation does not happen in a vacuum: A context the economy, society and policy - shape how easy or hard it is to innovate. In this context the role of government is also very important to create legislations that make the university - industry relationship as a win-win situation.