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The paper describes structural changes in OECD labour markets and examines their implications for education and training (E & T) policy. Turbulence in the labour market, higher incidence of unemployment, changing nature of jobs, skills and competences, in part generated by changes in firm strategies, are described. There are increasing pressures for E & T systems to respond. Both the content of E & T and its structure require major changes. Given the need for wide-ranging changes, a lifelong learning approach is called for so that learning needs of all age groups are articulated and met. Within this framework, a better balance is required between different components of E & T, and within each component a focus on promoting the ability to learn becomes crucial. Closer co-operation is needed between the public sector and a range of private sector interest groups, as well as greater coherence between E & T, labour market and social policies.