Since 1997, the United Arab Emirates (UAE) has invested in higher education and its expansion as part of its commitment to building a knowledge-based society. Though the UAE has prioritised quality higher education, it still faces challenges in producing graduates who are capable of actively participating in building its knowledge base. The literature reveals a clear mismatch between the qualities of university graduates and continually changing labour market needs. Along with demographic challenges, cultural and institutional factors impede progress. This paper discusses these challenges and offers policy recommendations designed to support the UAE in its goal of Emiratisising its workforce and creating a knowledge-based society.