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Many discussions around the ‘real’ and the ‘unreal’ within and about educational institutions relate to the idea that schools, TAFE colleges and universities are places that prepare people for the ‘real’ world of work and of life, rather than part of the ‘real’ world itself. Although educators know that educational institutions are ‘real’, at the same time, in explicit and implicit ways, they are complicit in producing understandings that help to maintain an oppositional binary that suggests that the ‘real’ world of work is out there while what happens within educational institutions is preparing for the ‘real’ world. The author suggests that the impetus to integrate work and learning is situated within a complicated position around this ‘real and unreal’ binary. This paper focuses on these complexities around the ‘real and unreal’ binary by reporting on the emerging findings of an Australian Research Council (ARC) study of various pedagogical approaches to vocational learning across a number of educational and organisational sites. The author focuses on the ‘contradictory terrain of pedagogical strategies that aim to reduce the distance between learning and the ‘real’ world and thus between being a learner and being a worker’. She explores one kind of pedagogical practice, simulations, using interviews, focus groups and observations in two educational sites: a private educational institution that aims to produce tourism and hospitality managers; and a post-graduate Masters program in information technology at a university. The topic of the ARC project is ‘Changing work, changing workers, changing selves: a study of pedagogies in the new vocationalism’ and the research questions are: How are the new work requirements reflected in the programs? And what kind of workers (learners) are being constructed in these programs?