Higher education in the United Kingdom is currently undergoing major changes. In the foreseeable future, it will also undergo further change. The nature of these changes can be attributed to several key areas--government demand for change, industry demand for change and student demand for change. The UK, like many other major economies and not for the first time in recent history, is having to face the implications of severe skills shortages in its workforce, coupled with the increasing competitiveness of more globalised workforces and workplaces. A recent major government report has set out the country's skills agenda until 2020 and UK higher education is starting to wrestle with the implications of these changes, some of which challenge the traditional preserves of university education. This paper will focus on the implications of these skills shortages and the impact that is having on UK higher education. In particular, reference will be made to the impact of the new 2 years vocational Foundation Degrees, to the shift from supply-led to demand-led higher education, the increasing integration and tensions of work-based learning and to the accreditation of Continuous Professional Development (CPD) within an academic framework. This paper presents one story of the growing and changing relationship between higher education and industry. (Contains 6 footnotes.)