This report charts the economic changes occurring in the South during the past two decades, presents a status report on where the South is today, and offers an agenda for future development. The South has made great strides, diversifying its economy and improving racial inequities. Several of its cities have successfully engaged the new economy, but the disparity between these cities and areas that still depend on the old economic strategies of the South, especially rural areas, is increasing. Many in the rural South, and many Latinos and Asians migrating into the South, do not have the education for more than low-paying service jobs, so even though job growth is ahead of the rest of the nation, per capita income is less. The introductory chapter describes the impacts of globalization. The second chapter discusses job growth, business mix changes, foreign investment, exports, occupational mix changes, and information technology. Chapter 3 looks at the impacts of global forces on the region, including new-economy cities, rural stress, digital literacy, migration, immigration, aging, and education. Chapter 4 presents an agenda for the future, noting that the South must create more and better jobs, educate all its people for the modern economy, foster the discovery and application of new ideas, and foster a strong civic culture. The final chapter presents a 2-page demographic portrait of each Southern state. (Contains 22 references.) (TD)