This report proposes that state economic development policy and resources, and state personnel, with their knowledge of and access to the business community, can contribute to the intertwined issues of competitiveness and poverty. Following an introduction, chapter 2 examines four related issues: poverty, income equity, welfare dependency, and the urban underclass. Each issue is defined, and a policy context is provided by analyzing or summarizing policy approaches to the issue. Chapter 3 focuses on current state economic development practices that could be used in a state antipoverty strategy. It addresses "supply-side" activities that make production factors more attractive to businesses in ways that would also benefit poor people and distressed areas. Then it describes"demand-side" activities that help create new economic investment to benefit these groups and areas. Chapter 4 addresses two important facets of resource delivery: local implementation, and collaboration among resources. It reviews the four major sets of institutional resources available for a state antipoverty policy--education, welfare, job training, and economic development--and discusses linkage. It looks at the local implementation system, reviews building the competencies of local government, discusses approaches to collaboration, and describes successful collaborative efforts. Chapter 5 outlines policy approaches to addressing poverty, sets a framework for a state economic opportunity strategy, and describes its components. (197 references) (YLB)