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For a long time, and by many other European countries, Sweden has been seen as the example concerning labour market systems, a competent labour force and vocational training. Recently, however, the Swedish economy has experienced problems similar to those in other European countries, such as high open unemployment, and a deterioration of the competence base of the labour force. To be more specific the skills provided through the educational system as well as through vocational training programs have not been sufficient to satisfy employer's requirements. This has partly to do with the fact that industrial production and the labour market have been changing during the past decade, but the educational system has not adapted. This causes human capital problems in the technological transition of Swedish industry. Unless qualified labour is available the technological transition will be slow and hard on labour. Employability in the future will require education and training to become a lifetime experience.