Trends that will influence Kentucky's future were examined along with policy options for responding to those trends. According to the analysis, the effects of the new economy on Kentucky has been mixed. Although many Kentuckians have benefited from the new economy, the state's least educated and poorest residents are falling further behind the rest of the nation. The inequalities in the areas of income and access to information technology are especially significant. Kentucky has recognized that education is the key to closing these gaps. Access to health care and Kentucky's increasing elderly population are additional areas of concern. Kentucky policymakers will need to devote special attention to the following areas: (1) reducing income inequalities; (2) closing the digital divide; (3) plugging health care gaps; (4) investing in people, especially by increasing investments in early childhood, K-12, postsecondary, and adult education; (5) building social capital; and (6) managing demographic change. (Fifty-three tables/figures are included. Discussions of the following items are appended: income inequality; computer and network usage; selected variables examined in a 2000 survey of 3,000 Kentucky high school students; factors affecting the probability of school attendance; and background information and sample characteristics from a survey completed by 962 Kentuckians aged 45 and older.) (MN)