Abstract: The study builds a model that examines the effect of the quality of higher education and training on both innovation and the labour market efficiency. In addition the proposed model reflects the effect of the quality of technology readiness on the same factors using a sample of 12 Middle East countries from the period (2012 to 2018). The study uses the partial least squares method to estimate the model that shows the relationship among multiple dependent and independent variables, constructs unobserved factors, and finally tests the pre-defined assumptions against empirical data. The model suggests that the increase in the quality of higher education will increase the quality of both innovation and labour market efficiency. There is a significant positive effect of technology on higher education and training, innovation, and labour market efficiency. The study offers new perspectives on the relationships among the factors included in the proposed model.