On the eve of its fourth general elections, South Africa finds itself in the midst of a rearrangement of its political landscape after a decade and a half of governance by a unified African National Congress. This political realignment is occurring at the same time as economic gloom spreads around the globe in the wake of the American subprime crisis. South Africa’s response to this confluence of circumstances may very well become a test of its resilience, as two relatively constant variables in recent years, political and economic stability, come under pressure. Times of uncertainty and volatility pose significant risks, which need to be understood; at the same time, they should not blind us to the opportunities for innovation when tested policy and strategy fail to measure up to the challenges of the day. This is the perspective that the 2008 Transformation Audit wishes to employ in its four traditional focal areas – the economy, the labour market, skills and education, and poverty and inequality.