This report argues that, while the Government's vision of a future education system as one based on "first-class learning based on high participation, high attainment and effective progression into further learning and work" is certainly commendable, it is also unrealistic and unattainable if the present market-based policies continue. Skills are a most important determinant of sustainable economic advantage. The transition young peopple make into the world of work shapes their attitudes to learning throughout their lives. However, new research into how young people make the transition from school to work highlights the flaws in the present system and pinpoints the need for a new balance to be struck between quality experience and achieving qualifications - much higher quality youth education and training is needed to build economic competitiveness, responsible citizenship and social cohesion. The report goes on to consider the factors which lead to poor performance and suggests alternative policies to secure the Government's objectives.