Knowledge has always been an important factor for world’s economic growth and societies’ well-being and prosperity. In today’s knowledge-based economy (KBE), knowledge can be used to produce designs, products, and services, and it is therefore a prerequisite for societal progress and development. KBE is closely related to sustainable development since new types of knowledge are needed for the global economic growth to increase without compromising the standard of living of the future generations. In this paper, we consider a higher education KBE and we propose a long-run economic model of knowledge creation and sharing. Knowledge sharing exhibits substantial positive externalities since knowledge created by a single student affects all other students’ knowledge stock through sharing. The main conclusions are that knowledge created in the higher education economy determines the rate of economic growth and that the creation of a knowledge-sharing communication network that will be managed by a single authority will increase the rate of growth.