It is important to achieve effective innovation in computer-assisted instruction (CAI). Meaningful innovation can be achieved only by changing the system--that is, by changing not only the technology, but also the institutions and persons involved. Two institutions are proposed: a National Institute of Education which would support creation of a research and development base for educational innovation and a system of institutions and technology designed to make instructional use of the computer in higher education truly effective. To achieve innovation, one must plan institutions to encourage and facilitate it, paying careful attention to financial incentives. Instructional use of computers today has a cottage-industry character. Two trends may change this situation: commercial time-shared computer service and cheap, standardized mini-computers programed through an exchangeable medium such as a cassette. Change would require the concerted efforts of higher educational institutions, time-sharing industries, publishers, and the government. (SM/JK)