Strategies to facilitate better cooperation between business and higher education institutions are explored with a focus on policies that colleges, businesses, and public policy makers can implement to utilize educational resources for economic development. Consideration is given to: developing informal university-industry networks, universities as business consultants, university-run industrial extension services, university-industry cooperative research, the state role in promoting innovation, and new business start-ups. For each of these topics, recommendations for university and state officials are offered and examples of activities at a number of colleges and universities are cited. Recommendations for the university include: identify what the university has to offer the private sector; establish business participation criteria that balance business needs and university resources; seek advice from the business community on technical services that they would find valuable; consider personnel exchanges and experimental industry faculty positions; explore the possibility of a center for excellence program; and contribute the college's resources and space to incubator projects. (SW)