A knowledge-based economy relies primarily on the use of ideas rather than physical abilities and on the application of technology rather than the transformation of raw materials or the exploitation of cheap labor. Knowledge is being developed and applied in new ways. Product cycles are shorter and the need for innovation greater. Trade is expanding worldwide, increasing competitive demands on producers. The global knowledge economy is transforming the demands of the labor market throughout the world.It is also placing new demands on citizens, who need more skills and knowledge to be able to function in their day-to-day lives. Equipping people to deal with these demands requires a new model of education and training a model of lifelong learning. A lifelong learning framework encompasses learning throughout the lifecycle, from early childhood through retirement. It encompasses formal learning (schools,training institutions,universities); nonformal learning(structured on-the-job training); and informal learning (skills learned from family members or people in the community). It allows people to access learning opportunities as they need them rather than because they have reached a certain age. Lifelong learning is crucial to preparing workers to compete in the global economy. But it is important for other reasons as well. By improving people's ability to function as members of their communities, education and training increase social cohesion, reduce crime, and improve income distribution. Developing countries and countries with transition economies risk being further marginalized in a competitive global knowledge economy because their education and training systems are not equipping learners with the skills they need. To respond to the problem, policymakers need to make fundamental changes. They need to replace the information-based,teacher-directed rote learning provided within a formal education system governed by directives with a new type of learning that emphasizes creating, applying, analyzing,and synthesizing knowledge and engaging in collaborative learning throughout the lifespan.