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The aim of this report is to help industry, government policy makers and training providers better understand the drivers of skill needs in the services industries and identify the options for meeting those needs. This report presents profiles of wholesale, retail and personal services, tourism and hospitality, and sport and recreation industries. It also provides an overview of employment trends, drivers of skill needs and vocational and technical education trends in these industries. The main drivers of the services industry skill needs are: consumer and customer service demands; competitiveness and productivity demands; market expansion; employment arrangements and worker attraction/retention; globalisation; demographic change; technology and e-business; increasing awareness of risk; and regulatory compliance. As the dynamic nature of these industries presents significant skills challenges for both employers and employees, this report highlights a number of high level strategies essential to meeting those challenges in the service industries. The strategies recommended are broadly represented in four areas: supporting skill acquisition - an ongoing, incremental process driven by continuous change in the workplace and possibly influenced by work organisation, recruitment policies and practices, employee relations and job design; consolidation and refinement of industry training packages - an immediate challenge is to consolidate and refine 14 training packages, identifying and drawing together common skills and competencies, whilst still incorporating sector-specific requirements; developing partnerships - new partnerships and enhanced existing partnerships need to be developed; understanding industry skill requirements - continual research into the drivers for skills demands and resulting implications is needed and the research should be practical, evidence-based and results focused.