Emerging and potential Australian industries were surveyed to identify the skills needed by their current and future workers and to determine how Australia's vocational and training (VET) system can best respond to those skill needs. The study investigated industries emerging from the work of Australia's Co-operative Research Centres program. The main data collection activities were as follows: consultations with experts; a literature review; surveys of the VET centers and their annual reports; case studies of selected centers; and case studies of new firms established by two centers. The study established that, whether oriented primarily toward new or existing industries, most cooperative research centers were working to create innovations such as new technologies, processes, tools, equipment, or products. The study documented the need to build and strengthen links between the VET sector and the cooperative research centers to achieve the following goals: (1) improve the timely flow of new knowledge into the VET sector; (2) enable centers to utilize VET's strong links with industry; and (3) promote teacher currency through professional development opportunities for VET personnel within the cooperative research centers. (Twenty-seven tables/figures and 45 references are included. Lists of the cooperative research centers and consultants are appended, along with the survey of annual reports pro-forma and the phone interview protocol.) (MN)