The inherent opportunities for communication, collaboration and experiential learning in an online and global network create the impetus for the new network paradigm in higher education. A strategic knowledge network in education was designed and developed to build "Mode 2" knowledge capabilities; create new knowledge for innovative application; and help to shape, influence or create professional practice. This paper presents a case study of a masters program at a large university of technology in Australia, in which students undertook industry-based coursework as part of a strategic knowledge network. Complexity of projects increased throughout the program; and the real-world projects included working with local and international mentors, thus positioning coursework within the industry. In this flexible learning environment, graduates developed "Mode 2" knowledge capabilities for the networked world of work. (Contains 3 figures and 1 table.)