This report was written for the Technology Policy Task Force of the Committee on Science, Space, and Technology, U.S. House of Representatives. The report examines the nature and history of technological change, its impact on large and small firms and their workers, and its policy implications. The paper stresses that individuals, schools, firms, and public agencies must recognize the importance of basic skills in adapting to change. It urges parents to monitor the schools and help them provide their children with the reading, writing, and problem-solving skills needed to enter and remain in the economic mainstream. The report notes that firms consistently offer to provide specific training to motivated new workers with basic skills. In addition, federal programs such as the Job Training Partnership Act and Trade Adjustment Assistance are needed to assist displaced workers. However, it was found that major programs providing incentives for companies specifically to retrain their workers in new technologies have yet to be developed at the federal level (although several states have initiated such programs). The report concludes that government at all levels should aid industries and individuals adjusting to new technologies; however, those assisted must use available resources conscientiously to help themselves. (KC)