You know better than I that West Virginia’s economy has been defined by what we now call legacy industries -- steel and heavy manufacturing complimented by coal mining. For many decades, these industries provided a stable, secure living for the state’s citizens. But, as with most legacy industries, the workforce is shrinking as new technologies and increased competition challenge the traditional model.

States like West Virginia and others throughout the Upper Midwest are now in pursuit of new industries, ones that will provide a substantial number of the jobs at the wages people in these states have come to expect. We are not a centrally-planned economy though; we cannot simply order these industries to open in Charleston or Wheeling or Huntington. Instead, we must create the conditions and the environment that attract growing industries to our state. That starts by understanding the framework of the world economy.

Globalization has brought many new countries, representing nearly half the world’s population, into the economy. Some of these countries are in a race to the bottom, competing fiercely to steal the lowest skilled, lowest paid jobs in the world for their citizens. As all of us are now learning, there will always be someone, somewhere in the world that is willing to work for less.

Rather than engage in this competition for low wage jobs, we seek to attract, and create, the highest skilled, highest paid jobs in the global economy. And we must do so because to maintain our economic strength and leadership requires us to fill a new role, that of the global innovator.

The United States needs to position itself at the cross-roads of the world’s cutting-edge industries, driving the innovations that lead to new products, product features, and services using biotechnology, nanotechnology, and other intersecting industries as yet undiscovered. This is where the high value jobs of tomorrow will be found and where Americans must work to continue improving our standard of living.

Of course, there are competitors for these jobs as well. Western Europe has been characterized as economically stagnant. While there is some truth to this, there is also tremendous strength in these countries. Germany is still the world’s largest exporter of goods, in no small measure because of their engineering prowess. And the U.K. trails only the United States in delivering services to the world.

While Europe represents the established competition, the Far East and the Sub-Continent provide the emerging one. Most of us are familiar by now with China and India and the progress they have made. India in particular sees its future not in competition with China for low skill manufacturing, but in competition with the West for services. There are others too. South Korea has the most advanced wireless network in the world, providing access over cell phones to things Americans only dream about right now. And even Japan, awaking after a 15 year slumber, is once again driving the electronics market.

Given these economic realities, how can West Virginia and its many economic regions create the conditions and environment to foster success? It starts by understanding that the systems and structures that we built to feed and support our old economy need to transform to meet the demands of today’s economy. Let’s begin with education.

It’s hard to overstate the critical role a quality education plays in creating growth and prosperity. One-third of productivity growth in the U.S. between 1950 and 1993 was due to increased levels of education. And it is a simple fact that countries whose students achieve high scores in math and science reap the rewards in terms of faster economic growth.

That is why so much attention has been paid recently to STEM – Science, Technology, Engineering, and Mathematics. Major parts of President Bush’s Competitiveness Agenda are about improving math and science education while well respected institutions like the National Academy of Sciences and the Council on Competitiveness have identified STEM education as the foundation of an innovation economy.

Improved K-12 education, particularly in math and science, is only the beginning. 90 percent of the fastest growing jobs in our economy require a post-secondary education. That’s a sea change in just a few years. Not that long ago, a high school diploma virtually guaranteed a job good enough to finance a home, raise a family, and save for retirement. That’s just not the case anymore. Nearly two-thirds of the high wage, high growth jobs created over the next decade will require a college degree – a degree that only one-third of our citizens now have.

Secretary of Education Margaret Spellings recently released a series of recommendations from her Commission on the Future of Higher Education designed to encourage more Americans to pursue higher education. They include creating seamless pathways from K-12 to Community College to University and better aligning post-secondary education with the expectations and demands of employers.