Because their fiscal health depends on having a large base of high-wage taxpayers, states have an economic interest in increasing their citizens' skill levels. In today's global economy, high wages are increasingly tied to the high skills required to function successfully in high performance work organizations. Employer-provided skill upgrading for most U.S. workers is either inadequate or nonexistent as firms seek to minimize operating costs. Publicly supported efforts to train adult workers cannot succeed by simply building upon the foundations of existing state education policies/practices because nearly all current spending on human resource development supports primary, secondary, and higher education. Several states, including Alabama, California, Connecticut, Illinois, and Iowa, are involved in the following types of innovative activities to target training and education toward workers and firms in the private sector: provide high priority assistance to companies developing high performance organizations that take full advantage of broadly skilled workers and flexible production systems; finance worksite-based skill improvement; use tax and bond systems to meet the need for reliable funding of training programs; and use tax credits to train work forces through state-approved providers. (A list of 7 contact persons is appended. Contains 14 references. (MN)