The number of inhabitants of Serbia is decreasing, as well as the number of pupils and students. The education system will have to adapt to demographic change and find ways to positively impact it. To better develop the increasingly scarce human resources, the education system will have to increase its quality, efficiency, and equity. This applies to both children and adults in schooling. This is the only path towards a population with increasingly developing abilities and solid preparation for the labour market, which will benefit every individual and the entire society. There are a number of challenges on the way to achieving this goal: we need to increase spending on education, improve infrastructure to adapt to new demographic circumstances and drastically improve the quality of teachers’ work and their social position. Moreover, serious efforts will be needed to raise the quality of teaching and curricula and to support students in order to mitigate failure at all levels.