Purpose: Strategic alliances generally represent inter-firm cooperative agreements aimed at achieving competitive advantage for the partners. In recent years, there has been a dramatic increase in strategic alliances by multinational firms. This paper aims to explore the essence of these alliances and why they have become such a growing area of research in business in recent years. Design/methodology/approach: Discusses strategic alliances between corporations and institutions of higher education. The major underlying motives for creating these alliances and the critical success factors are also discussed. The paper also analyzes the success stories. Findings: Highlights the major advantages for the academic community--research funding and practical learning opportunities for students--and for industry--lower research and development costs and technology transfer opportunities that affect competitiveness. The drawbacks may include the partners' different working cultures and values. Finds that alliances must be supported by continuous learning and restructuring processes to overcome the differences. Originality/value: Extracts the valuable lessons that might help others to effectively utilize strategic alliances between corporations and institutions of higher education. (Contains 2 figures and 2 tables.)