Knowledge economy initiated important transformations in labour markets and in the nature of education. This process brought about new understanding of lifelong learning and the restructuring process in universities. On the other hand, within the context of knowledge economy cities are also in transformation. As the economic development responsibility is left to the individual cities, urban politics gains significance and providing local economic development appears to be the main policy area for cities. As a product of these intertwined transformations, University Continuing Education Units appear to be key actors for cities for their contribution to local development. This work explores this fact in detail, and analyses to what extent these units in the case of Turkey serve for this function. The results obtained in this study and the policy proposals developed will hopefully increase University Continuing Education Units’ contribution to local development.