After years of steady and impressive economic growth, reductions in poverty, and political stability, Peru has reached a critical juncture. To sustain and expand the benefits of recent growth, Peru needs to diversify its economy and introduce more complex and technology-intensive production processes. Greater complexity, in turn, requires a more highly skilled and productive workforce. Peru has an extensive array of vocational education and training (VET) programmes that aim to build work-related skills, some of which provide very high-quality vocational education and training. Peruvians have also demonstrated a keen interest in developing their skills, supporting a robust VET sector of over two thousand providers with steadily increasing enrolments. But there is also ample evidence that the existing array of programmes and institutions are falling short of meeting the country's skills development needs. Despite growth in the supply of programmes and the numbers of graduates, there is still significant unmet demand for skills,particularly technical skills. The continued low levels of labour productivity and the high levels of underemployment among graduates of postsecondary institutions also point to gaps between what students are learning and the needs of the labour market.