Research to develop a fifth generation of computers is underway in several countries. These computers, which will be distinguished by the ability to provide knowledge information processing and respond to natural language commands, will have a profound impact on the labor market and hence on further education. Rather than being a separate curriculum area, computer studies should increasingly underlie the teaching and learning of each subject area, offering a knowledge-based approach to computer literacy. The role and form of face-to-face teaching must be reassessed, and institutional amalgamations may be necessary to meet the new perceived needs. Staff development must be focused both on using the expanded capabilities of the new computers and on addressing their social implications. Colleges should have information technology development units to develop pertinent curricula and materials, introduce artificial intelligence to teachers, and collaborate with subject specialist teachers in introducing the applications of advanced information technology into their subject areas. Company involvement in collaborative projects should also be encouraged. (Appendixes to this report include a glossary, selected quotations dealing with fifth generation computers and their likely impact, an introduction to micro-PROLOG and Augmented PROLOG for Expert Systems--APES--and an annotated bibliography.) (MN)