In 1989, the Industrial Research and Development Advisory Committee (IRDAC) of the European Community established a Working Party on education and training issues relevant to industry. A subgroup on skill shortages considered the issue from the European and macro-economic point of view. It examined such skills shortages issues as demographic trends that will lead to tighter labor markets, need for higher educational attainment and new and multidisciplinary skills, changes in demand, and the impact of advances in research and development and technology. A number of sectors were examined to demonstrate the crucial importance of human resources and adequate skill levels. Wide differences between Member States were found. Data on educational attainment, skilled labor demand, and output of engineers and scientists suggested that the more developed regions in the center and north of Europe were in a much better position. The following recommendations were made to remedy some disturbing trends: continuing training for the existing work force; adequate skills for the young entrants on the labor market; a European investment in human resources, training tools, and technology; and understanding of skills requirements. (Appendixes include a glossary and list of 41 general references.) (YLB)