Starting with an analysis of technological change and innovation cycles, this paper explores the effects of information technology on education in Australia over the past decade. Taking into account current programs and policies concerning the introduction of information technology in education, the paper outlines possible directions for future technological developments and educational responses to them. Part 1 addresses cycles of technological innovation, including product and process life cycles and convergence of technologies. Part 2 describes the responses of education to these technological developments, including engineering strategies, market strategies, public interest strategies, and transformational strategies. Part 3 is a speculative discussion of how technology will affect the future of education. The contrast between what is technologically possible and what is educationally desirable--and feasible--serves as a background to the analysis of policy developments which would assist education in managing the process of change that lies ahead. (Author/TE)