This report is part of the Investing in People Project, in which states worked to develop and implement work force preparation and training strategies to meet the challenge of a competitive global economy. The choices that states, firms, and individuals must make in order to enjoy a high standard of living are discussed. In order to achieve a high standard of living, states need to change their focus from "cheap" and "quick" job training to long-term educational changes that will ensure highly skilled workers and to persuading industries and companies to become high-performing competitors in the world marketplace. The three sections of this report discuss the following: (1) the new world economy and the realities of change, including the worldwide marketplace, changing products and technology, current state economic development strategies, and smart workers and smart businesses; (2) new realities and changing roles, such as new awareness of change and choices, new structures and helping industries themselves, and managing the transition; and (3) education, work force skills, and economic competitiveness, including the need to move businesses up the performance curve, smoothing the school-to-work transition, training the 75 percent of students who do not graduate from college, and job training for adult workers. Contains 24 references. (KC)