Requirements for vocational skills in the engineering industry in Modena, Italy, and Vienna, Austria, were studied. In Modena, employees of a representative sample of 90 small, medium, and large firms in the mechanical processing, agricultural machinery, and sports car manufacturing sectors were interviewed. In Vienna, data were collected through 8 case studies and interviews with 14 industry experts and national-level educational officials, 30 human resource management experts in 25 firms, and 20 individuals responsible for technical areas in representative firms. In 1991-1995, the size of Vienna's engineering production and car manufacturing sector decreased sharply (from 1,080 firms employing 25,822 individuals to 145 firms employing 12,130 individuals). In Modena, the sector shrank only slightly (from 154 firms employing 8,447 individuals to 136 firms employing 8,104 individuals). The following trends characterized Vienna's engineering production and car manufacturing industry: development of problem solving; increase in worker responsibilities and level of skills required; greater production orientation; emphasis on formalized knowledge versus experience; and acquisition of a globalization strategy. In Modena, the following trends were noted: flexible specialization; management of innovative function areas and integrated processes; emphasis on discovery, multifunctionality, and problem solving; rise in technical and specialist knowledge; and greater quality orientation. (Contains 27 tables) (MN)