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The Victorian Government Ministerial Statement, 'Knowledge and skills for the innovation economy', will reposition Victoria's vocational education and training (VET) system to support the achievement of the Victorian Government's goals and targets for education. The statement outlines the strategies for transforming the VET system from one that relates to an industrially based economy to one that helps firms to compete in the innovation economy, and communities and individuals to gain the skills they need for the future. Seven knowledge and skills projects were undertaken in the process of developing the Ministerial Statement and managed through the Office of Training and Tertiary Education (OTTE) within the Victorian Department of Education and Training (DE&T). Project two, 'Building skills to meet future needs' was undertaken by the National Centre for Vocational Education Research (NCVER) to analyse key trends in the supply of skills, the extent of current and emerging skill gaps, and strategies for raising the quality and flexibility of skill supply to meet future economic, industrial and social needs (reports of other projects are indexed from TD/VIC 70.03 to TD/VIC 70.07 and at TD/VIC 70.14).