This paper aims to examine the major issues concerning the links between academic research and economic development in Ethiopia by considering the Addis Ababa University as a case. The paper is based on two premises. The first pertains to the idea that universities being one of the actors in knowledge production play central role in enhancing the economic development and competitiveness of a country through their missions of academic research and the formation of skilled human capital. The second concerns the argument that a strong collaborative link between Universities and the industry is crucial in enhancing scientific and technological innovation process and commercialization of academic research through technology transfer that is necessary for economic development. Based on a review of the conceptual and theoretical debates, documentary evidences and key informant interviews, the paper argues that the university-industry link/partnership in terms of academic research and innovation is not well developed in the Ethiopian context. The findings indicate that the contribution of academic research in enhancing the country's economic development is minimal at Addis Ababa University in particular and in the country in general. The barriers to the lack of strong link between university and industry in terms of academic research and innovation are discussed and documented. Finally, implications for a strong partnership among universities, industry and government in enhancing the contribution of academic research and innovation to the country's development are dawn.