THE PROPOSITION WAS THAT THE CONVENTIONAL MODEL USED FOR OUR AMERICAN ECONOMY IS FUNDAMENTALLY FAULTY BECAUSE IT ASCRIBES TO THE PRIVATE PROFIT-SEEKING SECTOR THE BASIC DYNAMISM FOR AMERICAN ECONOMIC DEVELOPMENT. HOWEVER, THE NOT-FOR-PROFIT SECTOR, WHICH INCLUDES NONPROFIT INSTITUTIONS AND GOVERNMENT, ACCOUNTED FOR AT LEAST 27 PERCENT OF THE GROSS NATIONAL PRODUCT IN 1963. GOVERNMENTAL AND NONPROFIT INSTITUTIONS ARE BEING TRANSFORMED INTO ENTREPRENEURIAL STRUCTURES. THEY PLAY A CRITICAL ROLE IN THE DEVELOPMENT OF TRAINED MANPOWER SUCH AS PHYSICIANS, LAWYERS, ECONOMISTS, ENGINEERS, AND CHEMISTS. ECONOMIC ACTIVITIES IN NONPROFIT INSTITUTIONS AND GOVERNMENT HAVE SIGNIFICANT ECONOMIC EFFECTS ON PRIVATE ENTERPRISE IN UNDERTAKINGS SUCH AS URBAN RENEWAL, AND NUCLEAR POWER AND PRIVATE REGIONAL DEVELOPMENT. FISCAL AND MONETARY ARRANGEMENTS CAN CONTRIBUTE GREATLY TO PROVIDING NEEDED JOBS, BUT NEW ENTERPRISES, NEW PRODUCTS, AND NEW SERVICES ARE NEEDED. INNOVATION AND ENTERPRISE IN THE NOT-FOR-PROFIT SECTOR ARE THE PRECONDITIONS FOR EXPANDING EMPLOYMENT. BETTER SOCIAL INSTRUMENTS FOR MANPOWER ANALYSIS AND TRAINING ARE NECESSARY TO INSURE THAT MANPOWER SUPPLIES ARE IN REASONABLE BALANCE WITH NEEDS. SINCE TWO-THIRDS OF ALL OUR EMPLOYMENT TODAY IS IN THE SERVICE SECTOR WHICH IS HEAVILY ANCHORED IN THE NOT-FOR-PROFIT SECTOR, IT IS IMPORTANT TO EVOLVE A WAY FOR THE MARKET SYSTEM TO WORK BETTER IN THIS AREA. A GROUP DISCUSSION OF THE SPEECH, MODERATED BY HOWARD ROSEN, IS INCLUDED. THIS SPEECH WAS PRESENTED AT THE SEMINAR ON MANPOWER POLICY AND PROGRAM (WASHINGTON, OCTOBER 7, 1966). COPIES OF THIS DOCUMENT ARE AVAILABLE FROM MANPOWER ADMINISTRATION, OFFICE OF MANPOWER POLICY, EVALUATION, AND RESEARCH, U.S. DEPARTMENT OF LABOR, 14TH STREET AND CONSTITUTION AVENUE, N.W., WASHINGTON, D.C. 20210. (ET)