Educational institutions have neglected an urgent need to prepare workers for high-skill, high-performance jobs. Among the challenges states face are the following: (1) strengthening the basic skills achievements of all students, especially those from disadvantaged environments; (2) linking schools, colleges, communities, and work; (3) assessing skills and other outcomes that show what students know and can do; (4) conducting state-level comprehensive planning and coordinating programs, services, and financial resources; and (5) developing incentives and accountability mechanisms that promote and ensure successful efforts. Five areas through which higher education can work in partnership with elementary and secondary education, business, industry, labor, and government to build and support a high quality work force readiness system are as follows: program quality, school-college-work connections, skills assessment, state planning and coordination, and incentives and accountability. (A notes section contains 92 citations to other reports on educational quality and skill needs.) (KC)