This study examines the readiness of Sultan Qaboos University (SQU) students for the knowledge-based economy, focusing on their awareness, perceptions, and skills. As Oman transitions towards a knowledge-based economic model, understanding and enhancing students’ preparedness has become crucial. This research employs a quantitative approach, utilizing a questionnaire distributed to SQU students across various colleges and academic levels, achieving a 66.04% response rate. The key findings reveal that while many students consider knowledge economy skills very important, some express neutral awareness about these skills. Students ranked creativity and innovation (85.82%) and critical thinking and problem solving (85.11%) as the most essential skills. The study identifies significant relationships between enhancing students’ knowledge-based economy skills (ESKBE) and both awareness of the knowledge-based economy (AWS) and the impact of technology on education and employment (ITEE). Students generally view the knowledge economy positively, with 55% agreeing it will have a positive societal impact. However, they recognize challenges, including resistance to change (53.5% agreement) and limited access to education and training (49.3% agreement). The need for government involvement in addressing these challenges was strongly emphasized (54.3% agreement). Based on these findings, the study recommends that SQU enhance its curriculum to explicitly develop key skills, improve awareness of knowledge economy demands, further integrate technology into educational practices, strengthen industry partnerships, promote lifelong learning initiatives, and engage more actively with policymakers. This paper also provides a unique look at higher education’s role in the changing economy, as seen through graduates. It offers empirical evidence for the necessity of universities to change to serve the knowledge economy and, at the same time, make a case on how complex this transformation is. The results matter not only for SQU but also—in a more general sense, at least as far as knowledge-based economies are concerned—globally with respect to higher education institutions.

Recent advances in artificial intelligence (AI), particularly the emergence of generative tools such as ChatGPT, have intensified scholarly debate regarding their implications for teaching, learning, and assessment in higher education. While existing research has largely emphasized AI-driven automation of pedagogical processes and learning outcomes, limited attention has been paid to the systematic integration of generative AI as a formal assessment mechanism. This study examines the state and use of ChatGPT as an AI-based assessment tool within the Information Studies Department at Sultan Qaboos University. Despite the growing prevalence of AI technologies, many higher education institutions remain cautious in their adoption for assessment purposes, with some categorizing their use as academic misconduct or plagiarism. Such hesitancy reflects unresolved ethical concerns, academic integrity challenges, and the absence of coherent institutional frameworks to guide responsible implementation. In response, this study explores the potential legitimization of AI-assisted assessments while preserving academic rigor, transparency, and integrity. Adopting a qualitative research methodology, the study employed content analysis to examine existing teaching practices and activities within the department and to identify current levels of AI integration and institutional readiness. This analysis provided nuanced insights into the dominant state and presence of AI-based assessment methods in targeted departments’ offered courses within the university, which resulted in 67% of the checked courses lacking detection of AI-based assessment methods, 20% having moderate integration of AI usage in assessment methods and 13% having direct instruction to use AI while fulfilling the required assessments. Based on these insights, the study proposes a set of AI governance policies and strategic guidelines for higher education institutions, offering practical recommendations for integrating generative AI tools into academic assessment frameworks without compromising ethical, professional, or scholarly standards.