Labour market policy is playing an ever important role in helping local economies to return to prosperity and build living standards in a global knowledge based economy. It is increasingly vital to help individuals to fulfil their potential in the labour market and to acquire the skills they need at various stages of their lifetime and in function of new economic opportunities that present themselves. And the demand for skills will need to be enhanced by helping enterprises to raise their productivity. These complex tasks require intensive action at the local level, in partnership with increasingly mobile enterprises and workers. On the ground, a range of government policies need to be co-ordinated and adapted to local conditions – above all, governments need to inject flexibility in the management of policies.