This report describes new major education initiatives to enhance economic development in New York State. The 1970-1987 period has seen dramatic change in the labor profile impelled by technological and market forces transforming the economy. Apart from some fairly stable sectors, the state economy is characterized by a shift from manaufacturing to services and high technology goods, the rapid growth of producer and information services, the growth of small businesses, and the increased automation of production. These changes have produced a decline in blue collar jobs and a significant growth in services, wholesale and retail sales and finance, insurance, and real estate. To strengthen human resources for economic growth in the face of technological advances and increased competition, the state needs to upgrade three kinds of instruction: (1) basic literacy, computing skills, and liberal arts; (2) occupational skills and career education; and (3) professional preparation for critical areas such as medicine, engineering, and teaching. The state must also help schools address absenteeism, dropping out, and antischool behavior and increase business and industry's access to university research centers. The report describes 8 initiatives aimed at developing a skilled work force and 25 other programs to strengthen the educational foundation of economic development. Future steps, including model programs for economically distressed areas, are also outlined. (MLH)