In the past literacy was considered to have the ability to read and write. Today the meaning of literacy has changed to reflect changes in society and the skills needed by individuals to participate fully in society. It involves listening, speaking, reading, writing, numeracy and using everyday technology to communicate and handle information.
As the 21st century is characterized by the on-going change from industrial society to a "knowledge society", the so called "up-skilling" of employees and the need for higher qualifications levels is evident across Europe. It is in this context that individuals of today, and of the future, require a good standard of basic literacy education to enable them to access the job market as well as to participate in the process of lifelong and vocational further learning.
Illiteracy, defined as the inability to read and write, is nearly eradicated in Europe, but the phenomenon of 'functional illiteracy' between adults is becoming increasingly serious.
For a relatively high percentage of EU citizens, insufficient literacy and numeracy skills lead to exclusion from social and occupational participation and to a loss of employment. Job requirements are increasing even in sectors with low-qualification demands. Basic skills in literacy and numeracy are more important than ever. They provide the foundation for vocational training that can lead to employment, self-sustainment and personal independence.
In economic terms, the lack of literacy competences generates additional costs for undertakings and affects their ability to modernise. These extra costs are linked to high accident rates, extra salary costs to offset the lack of skills of individual employees and extra time for supplementary personnel supervision; further costs result from the non-production of wealth linked to the absence of optimal qualifications.
The employability deficit also has an impact on workers themselves. Apart from the accidents it causes, illiteracy is a source of absenteeism and demotivation.
There are good reasons why literacy is at the core of Education for All (EFA) - a good quality basic education equips pupils with literacy skills for life and further learning; literate parents are more likely to send their children to school; literate people are better able to access continuing education opportunities; and literate societies are better geared to meet pressing development challenges1.
 From the UNESCO website. http://www.unesco.org/new/en/education/themes/education-building-blocks/literacy/