This Chapter provides the context for analysing tertiary education policy. First, it summarises evidence on the impact and relevance of tertiary education, in particular its effect on economic growth and the benefits it brings to both individuals and societies. Second, it describes the main trends within tertiary education, with particular emphasis on growth and diversification, and reviews the contextual factors affecting the development of tertiary systems. Finally, it identifies the challenges currently facing tertiary education systems and which are addressed in subsequent Chapters. Countries are in the process of making a transition from a focus on quantity to a greater emphasis on the quality, coherence, and equity of tertiary education giving considerable room for tertiary education policy to play a role.