This paper, one of a series from the Western Interstate Commission for Higher Education's project "Higher Education and the Economy of the West," surveys the literature on all aspects of the relationship between higher education and the economy, and the teaching, research, and service missions of the academy, with special attention to reports and policy documents prepared by federal and state governments and independent and multistate development organizations. The paper addresses issues including the education challenges posed by a global economy, the essential education skills that workers will need, the role of technology in education and the economy and infusing internationalism and multiculturalism into the educational experience. Publications by economists, education scholars, policy experts, government panels, and higher education and economic agencies are reviewed. Topics addressed and sources cited include: characteristics of the "new" economy and the changing workplace; infrastructure and human resource development; putting research and development to work; expanding access to education; serving underrepresented racial and ethnic populations, working adults and lifelong learners, and rural populations; using technology to improve educational delivery; distance learning; improving undergraduate and graduate education; balancing liberal and professional education; strengthening general education; multiculturalism; internationalism; creating an active learning environment; improving the status of teaching as a profession; math and science education in the public schools; restructuring teacher education programs; university/school partnerships; university research, and collaboration with business and industry; managing university research; financing higher education; new tuition and financial aid models; and managing resources. (Contains approximately 200 references.) (CH)