Since high technology industries are expected to play an important role in Ontario's future economic development, the educational system must be particularly attuned to the need for middle-level skills in the labor market. The rapid increase in new labor market entrants with middle-level skills is not keeping pace with demand. Employers have the choice of hiring entry workers with these skills or upgrading employees through short training programs. In answer to a need to provide middle-level-skills training, colleges of applied arts and technology have been established; private vocational schools are an alternative. College programs provide a combination of general education and specialized skills. An important innovation has been the introduction of cooperative programs that involve work terms. To be sensitive to the demand for skilled human resources, the college system has allowed for interaction in the structure of colleges and in curriculum development. A balance is achieved between centralization and decentralization of college governance by dividing responsibility among the Ministry of Colleges and Universities, Council of Regents, and boards of governors of individual colleges. As the rate of technological change accelerates, colleges must anticipate changes in demand for skills. (Eight tables are appended.) (YLB)