From its inception, Penn State has played a role in Pennsylvania's economy. As a land-grant university, it has functioned as a change agent, transferring research and knowledge to increase farm yields, encouraging business and "the mechanic arts," and transmitting technology to the general population. While the university still does those things and much more, the key driver in today's global economy is innovation, and the university's role has expanded beyond transmission of knowledge. This article describes how Penn State is evolving into a catalyst for economic transformation through innovation and global competitiveness. The authors distinguish between the old economy and the new innovation economy, which is "knowledge-based." They outline how Penn State's Outreach initiatives "focus on the adult learner, regional economic development, and engagement with communities and businesses," with "new university leadership...[repositioning] Penn State institutionally with state government," as their strategy designed to address Pennsylvania's economic development challenge. (Contains 2 tables and 3 charts.)