The study explores, through a combination of qualitative and quantitative methods, the existence of Mode 2 knowledge and programmes in the South African higher education sector. It begins by theorising about knowledge and takes as a point of departure the propositions about theory-building which state that to explain social phenomena, a system of ideas is required, the conceptual tools of which are able to explain the essential dynamics of such phenomena. It goes on to describe a crisis in a system of ideas that, together with valid critiques, demands to be re-examined as well as the potential for advancing alternative lines of thought. A critical reading and understanding of existing theories leads me to believe that independently, they are all inadequate to explain the relationship between knowledge production and South African higher education in an era of globalisation. This includes the all-encompassing framework of neo-Marxism, the excessive consumerism of academic capitalism, the equation of the worker with modern technology in post-industrialism and the`lax relativity', complacent and, indiscriminate celebration of diversity in post-modernism. By combining the `culturally sensitive' critical post-modernism of William Tierney and George Subotzky with the concept of `late capitalism' as proposed by Frederic Jameson, it is possible to establish a relationship between globalisation and South African higher education on the one hand, and between its' policy and knowledge production on the other. Against the features of the newly proffered theoretical framework of `critical postmodernism in late capitalism', the study examines the new higher education policy and legislation and ensuing discourse, with particular reference to the Gibbons thesis. It then explores, by using an empirical investigation, the extent to which Mode 2 knowledge production exists in South African higher education. This is done through a selected programme from a former technikon in that demonstrates the key assumptions and perceptions about Mode 2 as held by lecturing staff and as embedded in the structure, design and content of the programme. With the results obtained the study finally makes recommendations for the establishment of a paradigm-shift and for new practices in knowledge production in higher education in South Africa. / Educational Studies / D. Ed. (Comparative Education)