Vocational education is crucial in the context of economic growth on an international level as it equips the workforce with the expertise needed to be efficient and competitive in the business sector. Sudden industrial changes with progressing technology have rendered the need for specialists more specialized and dynamic in nature. Vocational education systems are mediums of meeting this need by transferring industry-based knowledge to students. However, with all its growing importance, vocational education systems across the world are faced with a fundamental dilemma: a mismatch between the needs of industry and the type of skills that the education systems offer. The gap in demand and supply is critical for both graduates and business organizations because it enables the graduates to fail to meet industry requirements, and business organizations cannot hire people who possess required skills. Mitigating the supply-demand deficit is essential to vocational training success and industry responsiveness. Vocational training systems must succeed at meeting changing industry demands and training employable skills in demand by the employer. This calls for a paradigm shift for vocational education institutions to operate, from static and traditional curricula to more fluid, industry-driven models of education. Only through having the education materials as closely coordinated with real industry demands as possible can vocational education systems ever have any hope whatever of preparing students with the skills and knowledge they need to thrive in an increasingly competitive job market. The aim of the following work is to examine the problems of successful industry-education integration, i.e., the demand-supply gap. It will determine the causes and ways in which this gap develops, and its implications for vocational education schools and industry, as well as ways to overcome these. The research will examine the reason for the gap, how it is a problem to students and industry, and how industry needs and vocational education courses can better be aligned. This problem, besides being highlighted in regards to the improvement of educational quality, is also vital for graduate employability. Efficient integration of industry needs into vocational training can maximize students’ performance in the labor market as well as provide quality adaptable employees to industries with specified capacity to ensure productivity and innovation. Therefore, this study aims to present useful lessons and policy recommendations to facilitate greater cooperation between industry and education to allow vocational education systems to respond to evolving labor market demands.