The state is dealing with a sharp decline in revenues because of a deep and sustained drop in the price of oil. This budgeting dilemma shows the weakness of our state. Alaska should not be so reliant upon one industry. This is even more important when you consider the increasing consolidation of big oil corporations. Our state runs the risk of losing its freedom to determine its own destiny.

These indeed are challenging times. It is possible for Alaska to prosper in the rapidly emerging global marketplace of the information age. We can do so by building on our strengths and assets and making strategic investments. We must recognize how the world has changed. We cannot afford to look longingly into the past and pray for restoration of yesterday. We must adapt.

It has become common wisdom that a new economy is under construction. We are moving from an economy powered by cheap, plentiful petroleum-based energy to one powered by cheap, plentiful semiconductors. Several trends support this view. More people now work in the computer-hardware, software and services industries combined than in the auto, auto-parts, steel, mining and petroleum-refining industries combined. Bio-technology now employs more Americans than the machine-tool industry.

Alaska can adapt to this new economy. We can do so by investing now in its knowledge infrastructure. This will require that the state provide stronger support for the University of Alaska, which is to the information age what steel mills were to the industrial age. Applied research is the high temperature furnace of a knowledge-based economy -- forging basic components by which other more refined products are manufactured.

Alaska is an immense state whose 33,000 miles of coastline is half again that of the continental United States. Our size is made even larger by our location in predominately arctic and sub-arctic environments.

Applied research in fisheries and oceanographic systems could create a "knowledge niche" for Alaskans in the new economy, especially in bio-technology applications for our ocean industries.

We need more applied research in fisheries, rural economic development, global climate change and ecosystem management. Investments need to be made in the School of Fisheries and Ocean Sciences, the Alaska SeaLife Center in Seward and the Fisheries Industrial and Technology Center in Kodiak.

We need new investment in areas that are directly related to growth in the new economy. A new logistics emphasis will support the air transportation industry and Anchorage International Airport's growing role as a major cargo center for global markets. New investments in health research and better linkages with local hospitals will provide support for the increasing importance of quality health care in Alaska.

Additional investments also should be made in technology-enhanced delivery courses, and programs, instructional development and technical support for instructional technology and distance learning activities. Development of a "High Speed Point of Presence" (POP) on the Internet would put the university and the state in a position to attract high-tech industry and federal partnerships by substantially expanding bandwidth between Alaska and the Lower 48. This will allow expanded use of digital video, interactive graphics, large scale data manipulation and access to information resources. These are fundemental building blocks for the new economy.

It is time to reverse the brain drain out of this state. We must protect our enormous investment in K-12 education. Alaska is dead last in the United States in attracting our college-bound students. The national average of college bound students attending college in their home state is 81.7 percent. In Alaska, it's 40 percent. If we are to be competitive in a new economy powered by knowledge workers, we must have a university which attracts bright minds to Alaska so they can learn in Alaska, forge new innovations in Alaska, create new industries for Alaska.

It is time to get off the oil-roller coaster, diversify our economic base and implement a strategy of investment for prosperity in the new economy.