Past rural policies are reviewed, noting the effects of globalization and information technology. Rural business profits can be maximized by direct cost or value-added competition, but cost competition limits the development of productive capacity and leads to unequal income distribution. In contrast, value-added competition could create steep earning and learning curves, promote broadly shared prosperity, and strengthen civic society and democratic institutions. Two necessary elements of high value-added strategies are human resource development and telecommunications. The skills most in demand are computer, interpersonal/teamwork, and problem solving skills. Rural manufacturers have the most trouble finding workers with these skills in counties with low high school graduation rates. Rural areas have closed their educational achievement gaps with central cities, but both still lag behind suburban areas, and all fall short in preparing students for a more competitive and knowledge-intensive world. Rural enterprises are less likely than their urban counterparts to provide worker training. There is evidence that imaginative incentive regulations and competitive market disciplines would make it economically feasible to bring high-quality telecommunications to rural areas. Rural policy should encourage value-added competition by encouraging the development of high-performance companies through education and training systems and have safety nets for conditions over which people have little control. Rural policy should not give inordinate attention to agriculture, but should consider agriculture to be an important component of the rural and national economies. (Contains 32 references.) (TD)