1. INTRODUCTION

Education is asked to help society meet a number of economic challenges. These include the perceived need for a workforce with varied skills, equalizing the distribution of talent and wages across the population, and a more fluid employment environment where occupational boundaries are changing and more jobs are temporary. During the 1990s policymakers have become increasingly attentive to changes in the economy and the impact of those changes on different facets of U.S. society. Chief among their concerns is the relationship between education and economic health and how to best ensure that the United States maintains its economic position relative to other nations. Anxiety about international competition has directed attention to the quality of our education and training system and has been a central motivation for recent reforms to that system. Like other complex issues, sorting out the relationships between education and the economy that policy can affect is a difficult and often controversial task. The fragmented and decentralized nature of our education and training system only adds to the difficulty.

While policymakers and scholars may argue over the extent to which our education and training system fails to prepare individuals to participate fully in the new economy, few disagree that improvements are needed. But, while researchers sort out the exact nature of the changes and how to best alter education and training practices to meet new demands, the locus of responsibility for effecting change is also shifting. In particular, the current political climate favors reducing the federal role and placing more responsibility and fiscal control in the hands of state governments. This can be seen in proposed federal legislation to allocate federal education and training dollars to states in the form of block grants. It can also be seen in Congress' failure to reauthorize federal vocational education legislation in 1996, as lawmakers debate federal and state responsibilities.

At this point in time, it is safe to say that America's education and training policy is in flux. The continuing debates present an opportunity, however, to explore ways in which education might meet the challenge of a new economy. As one step in that direction, the National Center for Research in Vocational Education (NCRVE) decided to conduct a policy planning exercise. This document reports on the design and outcomes of that exercise, conducted with a diverse group of nationally recognized scholars, state and federal government officials, leaders of nonprofit organizations, and representatives of the business community. We begin with a brief description of the nature and purpose of policy planning exercises (Section 2) and follow that with a detailed description of the structure of the "Education and the New Economy" exercise (Section 3). We report the exercise output--the results of the deliberations of the various panels of participants (Section 4) and provide a synthesis of some of the key points made during the discussions (Section 5). We conclude with criticisms and suggestions for improvement made by participants at the end of the exercise (Section 6).

It is important to recognize that we do not in this report offer new data or analyses or any sort of blueprint or agenda for reform. We simply report the discussions and actions of knowledgeable persons faced with making allocative and strategic decisions in a structured-exercise environment. In doing so, we hope to draw out some implications of the issues and options facing education policymakers and to illustrate the potential value (and limitations) of policy exercises in the education arena.