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This report asserts that the current US systems are not working effectively to produce the kinds of knowledge workers need for our new economy. The paper examines state policy and system improvements that would enhance the ability of workers to gain skills to advance to better jobs and the ability of employers to find skilled workers. These improvements include increasing access to postsecondary education and training; enabling current students to succeed and complete marketable credentials; increasing transitions between literacy, language, and postsecondary education and training programs; incorporating employer demand and state economic priorities in educational planning; expanding the capacity of postsecondary institutions; and measuring program results.