Flexibilty within a framework of internal labour markets is now widely seen to be an important factor in the ability of manufacturing firms to respond quickly to changes in market conditions — which is increasingly coming to be the form that competitive advantage takes in advanced industrial economies. An emerging and flourishing literature has identified a number of ‘new production concepts’ being developed in manufacturing industries, that depart from time-honoured Taylorist systems of job fragmentation and skill minimisation. The new concepts, such as ‘flexible specialisation’, ‘human-centred production’, and ‘diversified quality production’, are all in one way or another seeking to characterise a form of ‘functional flexibility’, that both enhances productivity and offers workers themselves a greater sense of involvement with their activity. The new concepts rest on the identification of a critical linkage between work organisation, skill formation and advanced manufacturing technology; they point to a convergence between the previously separate worlds of work and of learning.