This paper questions whether public concerns about educational quality and slow economic development in Appalachia are being addressed adequately and suggests that the problem of lagging educational performance is rooted in the social and economic environment within which schools operate. Recent high unemployment in south central Kentucky and its relationship to low educational attainment in the region is examined and research is cited which suggests that opinion-shaping leaders and power brokers who enter the region as a socioeconomic elite are very important to progressive, modernizing educational change. Thus, the significance of change to the community, such as a new industrial plant, is linked to whether it brings a significant component of educated, administrative personnel with aspirations congruent with the requirements of a modernized society. These people exert influence by way of example (before parents and children), and through participation in school-support activities, educational administration, and political action. The paper recommends reconsideration of development policies that welcome labor-intensive businesses with large numbers of unskilled jobs. Instead, it is suggested that a new emphasis on education--not on working to establish seniority in low-skill jobs--should be seen as the way out of poverty, and that policies should welcome industries that employ more educated people. It is concluded that there is a need "progressive" firms to the community. Five references, three tables, and one map are included. (TES)