This report is an attempt to layout an analytical framework for understanding the challenges of developing a lifelong learning system in developing countries. Chapter 1, "The Knowledge Economy and the Changing Needs of the Labor Market" focuses on the role of education and training in helping build an educated and skilled populace to create, share, and use knowledge, and on building a efficient innovation system to identify new ideas and adapt them to create new technology. Chapter 2, "Transforming Learning," discusses the challenges faced in developing countries in changing education to meet the needs of a knowledge economy by changing the way people learn, expanding learning opportunities, and stressing career guidance and counseling. Chapter 3, "Governing the Lifelong Learning System," proposes that significant changes to both the governance and financing of education and training towards a learner-centered system are needed. Chapter 4, "Options for Financing Lifelong Learning," focuses on the government's role in financing learning, highlighting numerous case studies of creative financing programs. Chapter 5 "Moving Forward," discusses ways countries can proceed, including establishing national benchmarks for measuring lifelong learning outcomes. A forward, preface, executive summary and a short list of acronyms and abbreviations are included. Appendixes include a 256-item bibliography and index. (SLR)