The rural economy has performed badly during the 1980s. While the recession of the early 1980s was responsible for much of the trouble, the slow rural recovery demonstrates the fundamental hurdles facing the rural economy. Central among these are economic disadvantages, including remote locations isolating rural producers from their markets, low population densities that inhibit innovation and efficient production, and a rural population that is ill-prepared for better jobs that could pay higher incomes. Rural residents should not count on major shifts in the economy that would produce a windfall solution to their current economic problems. Instead, the most promising solutions require community-wide actions to adapt to change and to exploit the creative opportunities for economic growth that arise during times of economic change. Low educational attainment in one rural population and the relative lack of organization and leadership in rural communities inhibit effective community action. By taking a broader view of their responsibilities within rural communities, schools can help rural residents create better futures for themselves. This paper presents a clearer definition of rural areas and discusses the misunderstandings about rural America and what its problems are. Strategies that put local communities in charge of their own development are discussed with an emphasis on innovation and education. An Appendix supplies information specifically for Kentucky, Tennessee, Virginia, and West Virginia. (Author/ALL)