This paper focuses on how states can better align postsecondary education with their economic needs, which will position them to compete in the global economy by producing a highly-skilled workforce and by unleashing postsecondary education institutions' power to innovate.

A truly innovative postsecondary system must do the following:

1. Foster among its graduates the critical skills and capabilities needed to enhance state economic competitiveness.

2. Produce a well-qualified K–12 teacher corps that is highly skilled in the science, technology, engineering, and math (STEM) disciplines.

3. Create new knowledge by investing in research and development (R&D) and by establishing policies that facilitate the translation of new ideas into innovative products, processes, and services.

The report also introduces a new vehicle for aligning postsecondary education to state economies--the postsecondary education compact. Through the compact, state governments, the postsecondary education system, the Boards of Regents, and the private sector collaboratively embrace a public agenda to ensure that postsecondary education policies, programs, curricula, and resources address current, emerging, and future economic realities.