(FORTUNE Magazine) – THE TEACHER CAPTIVATES the class as he paces back and forth, commenting, cracking jokes, asking questions. ''Everybody loves a sincere speaker,'' says the wiry young instructor, immaculately dressed in tan pants, white shirt, and brown striped tie. ''Have your facts straight. Don't go off on a tangent.'' In discussing the fear of public speaking, he suddenly yanks off his glasses, pretending that he can no longer see his audience, and says, ''You folks look scary out there.'' The students guffaw. Now, choose one: You are in (a) a European business school, (b) an esteemed private college, (c) a corporate communications seminar. Answer: a vocational high school. The teacher, Robert Moses, is an instructor at the Chicago High School for Agricultural Sciences, a ''magnet'' school set up to attract youngsters -- 87% of whom are black or Hispanic -- from throughout the city. All carry a full academic load, including courses in a foreign language and computer technology, and 75% of the seniors have been accepted at four-year colleges. Dow Chemical has awarded scholarships and summer job guarantees to four of them. Why? Like most major corporations, Dow is looking for entry-level workers who can communicate, solve problems, work with technology, and learn quickly. Guess what? A new generation of vocational schools is beginning to turn them out. In America vocational schools have long been written off as the ultimate oxymoron, emphasis on moron. Remember Bill Cosby's old routine on shop? In it he recalls, ''A guy says, 'If you put a bullet in the furnace, it will explode.' This was the brightest kid in our class.'' No longer. Says John Furman, a training coordinator for General Motors: ''I recently spoke to some vocational students who were using computers to simulate rocket launchings. It's not like in the Fifties, when they'd just be given a piece of wood to saw.'' Today some 26,000 public high schools, community colleges, and technical institutes offer vocational education. This story considers only publicly funded vocational education, not the myriad private training centers, which range from fly-by-night operations to Katharine Gibbs, a highly respected secretarial school. For industry, vocational education could be a godsend. According to the Bureau of Labor Statistics, jobs for technicians will grow 38% by the year 2000 -- faster than any other major occupational group. As automation spreads, companies need smarter, more flexible employees who can perform a variety of tasks, from installing and monitoring welding robots to reprogramming them if production rates drop. Professor Ernest Lynton at the University of Massachusetts dubs this new breed ''blue-and-white-striped-collar workers'' -- production employees who are paid to think. COMPANIES CANNOT train them all. Says Jack Bowsher, a retired director of IBM external education: ''When someone comes to work here, we double the cost of training, because we have to pay salaries too. More and more, industry is asking: 'How do we get people trained before we hire them?' Vocational schools do this.'' American corporations have an important reason to help make vocational education better -- self-interest. By working with local institutions on curriculum, by lobbying state education departments and local school boards for funding, by donating up-to-date equipment, by loaning employees to serve as teachers and mentors, companies can help guarantee themselves a better- trained, more productive work force. OVER THE PAST five years, General Dynamics has hired 40 machinists for its Pomona, California, division from nearby vocational schools. Most have since been promoted, a few to salaried supervisor. ''We don't have to look for top- grade machinists anymore,'' says John Whiteside, a vice president of human resources. ''We think this is the best way to go.'' Toyota, too, is revved up about American vocational training. Forecasting a need for 7,000 more mechanics by 1995, the company gives tools, cars, trucks, and scholarships to 55 U.S. vocational schools and colleges. In the past three years Toyota has hired over 500 graduates to work in dealerships. Modern vocational education does something at least as important as train labor: It helps keep youngsters in school. Though only half of those who enter high school go on to higher education, American schools persist in treating non-college-bound students like second-class citizens. So, many drop out. Quality vocational programs can motivate students to stay in school -- and maybe even go to college -- by making academics more palatable and by providing highly marketable skills. The revolution in vocational schools is part of the broader educational reform movement. Under pressure from academic proponents who want to strengthen the liberal arts curriculum in high schools, at least 43 states in the past four years have reexamined their vocational education policies. The results: Schools are experimenting with new teaching methods that integrate basic academics and hands-on learning. They are offering broad clusters of courses such as health sciences or electronics, instead of occupationally specific programs like brake repair. And they are forming closer ties to businesses and community colleges so that students can easily make the transition to work or college. Says John Bishop, a professor at Cornell University's School of Industrial and Labor Relations: ''I think vocational education is doing a better job of what it's trying to do than academic classes are doing.'' As the demand for skilled workers grows, improving the system of technological training becomes good economic as well as social policy. The 1984 Carl D. Perkins Vocational Education Act, which provides roughly $1 billion a year to improve the quality of secondary and post-secondary schools, is up for reauthorization this year. New amendments in the House version would add $200 million to encourage high schools and community colleges to create coordinated programs of instruction. Dubbed ''tech prep'' or ''2+2,'' these promising programs would link the last two years of high school with the first two years of college. Though poor schools are still common, here's what good vocational education can do: -- Make academics relevant. Within the graffitied halls of ivy, a debate rages: Is job-specific training valuable for high school students, or are they better off learning basic sciences, languages, history, and math? The question assumes that job training and academics are mutually exclusive. They are not. To the contrary, many people learn academic subjects better in a context they can understand. Says Joyce Schroeder, who teaches applied math to carpentry students at the Great Oaks Joint Vocational School district near Cincinnati: ''We're talking about kids who hate math. But if you can show them they need it for blueprints, they'll do it.'' Great Oaks is one of Ohio's 49 area vocational centers, multimillion-dollar technical complexes built to allow school districts to stretch their vocational education budgets by pooling money, equipment, and students. To make students at these centers more marketable, Ohio's Department of Education authorized a statewide applied academics program that puts more math, science, and communications into the vocational curriculum. For example, Rosalie Bernard, an English teacher at Montgomery County Joint Vocational School outside Dayton, and Jim Frederick, an auto body instructor, team teach a course in communications -- as it relates to auto body work. Students regularly give oral presentations on their job skills, perhaps explaining how to put on a fender. Says Bernard: ''Our advisory committee of shop owners and foremen told us the kids they are getting today are skilled, but they can't communicate. They don't know how to defuse customer anger. And that's the one thing the business community wants.'' Once each semester, the class simulates a typical day in an auto body shop, with customers calling, vendors complaining, and employees whining. ''Who is your priority?'' asks Frederick. Several boys respond with the correct answer: ''The customer!'' One of the hottest vocational courses is Principles of Technology, taught in 1,200 schools in 47 states. It was developed by the the nonprofit Center for Occupational Research and Development (CORD) in Waco, Texas, in partnership with state vocational education agencies. The course teaches basic physics concepts, such as force and energy, through a series of hands-on experiments. For instance, students learn about thermal resistance by measuring the effectiveness of the insulation in their houses. This beats watching a teacher write equations on a blackboard. Says Dan M. Hull, president of CORD: ''Only 12% of high school students study physics. Yet physics is the foundation of most new technologies. So we said, 'Let's take physics and put it in work clothes.' '' The ''clothes'' are expensive: Lab equipment for the course, which includes oscilloscopes and lasers, runs about $30,000 per school. But a study conducted by John Dugger, an associate professor of industrial education and technology at Iowa State University, suggests the investment pays off. Two groups of students -- 257 who were enrolled in Principles of Technology and 275 who were enrolled in a regular physics course -- were tested on basic physics concepts at the beginning and end of their junior or senior year in high school. The mean score for the physics group rose 11 points, to 66. The Principles of Technology group improved their results by an average of 33 points, bringing their mean score to 81. Says Dugger: ''If we could take the methods of vocational education and combine them with the content of academics, we could really make progress in education. Principles of Technology is doing some of that.'' -- Keep kids in school. Some educators believe that reducing dropouts is the weakest justification for vocational education. In fact, it may be the strongest. One reason: A high school diploma raises earning power by almost 25%. Second reason: Close to 30% of labor force entrants through the year 2000 will come from racial and ethnic groups that have the highest dropout rates. Roughly 40% of blacks and 50% of Hispanics drop out of high school. The Bureau of Labor Statistics estimates that these groups will account for 45% of total labor force growth over the 1986-2000 period. Proof that vocational education lowers the dropout rate is scant. But hear what Chris Horrocks, a student in a special electronics program for dropout- prone youngsters at Silver Creek High School in San Jose, California, has to say: ''I hated school when I started high school. It was the worst thing in my life. Now I can connect schoolwork to my interest in computers. It gives a purpose to learning.'' Vocational programs also offer many students the chance to prove they can excel at something and provide them with the attention they normally do not receive in large comprehensive high schools. Says Chris Beasley, an electronics student at the Montgomery County Joint Vocational School: ''Here, the teachers care if we graduate.'' To motivate ''high-risk'' kids to stay in school and, not unimportant, to meet the work force needs of local industry, in 1981 Hewlett-Packard and Lockheed Missile & Space Co. joined forces with the Sequoia Union High School District to start the Peninsula Academies. These three-year vocational programs in computers and electronics are taught in two high schools in Atherton and Redwood City, California. Some 40 local companies provide equipment, mentors, on-site labs, and summer jobs for students. Now career academies -- sometimes described as ''schools within schools'' -- have spread throughout California: 18 academies in 16 cities offer similar programs. The state's pending 1989-90 budget calls for funding 15 more. On average, academy students have higher attendance rates and grade point averages than their nonacademy peers do. They also drop out less. For the first group of students to complete three years in an academy program, the statewide dropout rate was 7.3%, vs. 14.6% for a control group of nonacademy students.

What makes for a successful program? A supportive school district and a lot of industry involvement. In Oakland, for instance, students enrolled in the Oakland Health Academy at Oakland Technical High School go to one of seven local hospitals to receive training on such equipment as radiology machines, which the school could never afford.

Last year Oakland Health Academy graduated its first class. When the students started the program, their average achievement test scores ranked in the 30th percentile nationally. Four years later, 98% of these students received diplomas, and 86% went directly to two- or four-year colleges. -- Encourage post-secondary education. Fred Monaco, director of career and vocation education in Pittsburgh, has an arresting thought: ''General education is the enemy.'' He's referring to the roughly 30% of high school students who take the general education, or general studies, program, picking up a math credit here, a woodworking elective there, and finding themselves at graduation equipped for neither college nor work. In Pittsburgh the school board recently decided to eliminate the general education curriculum altogether, after a study showed that these students dropped out at a rate five to six times higher than those in college-prep or vocational programs. Opposition to general education is growing. Around the country, schools are trying to steer these students, who tend to consider the high school diploma the end of their formal education, into a new ''technical track'' that provides a clear path to college. The Perkins reauthorization bill, with its emphasis on 2+2 programs that link the last two years of high school and the first two years of college, could help the movement. Says Chuck Bradley, a manufacturing manager with Texas Instruments in Austin, Texas: ''I'd like to see general studies dropped and 2+2 programs become standard.'' Bradley is a member of an advisory board -- its members come from 13 companies, including IBM, Lockheed, Motorola, and 3M -- set up in 1986 to help the Leander school district and Austin Community College develop a tech prep curriculum geared to the needs of the local electronics industry. Now students at Leander High School can take two years of junior-college-level courses, AC/ DC Electronics and Semiconductors. After graduating, a student who goes on to Austin Community College and takes a minimum of six hours of classes automatically receives an additional 12 hours of credit for the electronics courses. Says Elbert Marcom, assistant vice president for academic affairs at the college: ''This creates excitement for secondary students, because they can see a four-year scheme. These kids are capable of handling much more technical material then we've been willing to admit.'' -- Provide jobs. Ohio and Illinois need welders. The construction industry projects a serious worker shortage in the mid-1990s. Millions of jobs beckon high school graduates with skills. The diploma alone is not enough: Between < 1967 and 1987, says the Bureau of Labor Statistics, high school graduates accounted for 60% of the growth in unemployment. According to a study by John Bishop at Cornell, vocational school alumni are less likely to be unemployed and earn 7% to 8% more than other high school graduates -- but only if they find jobs in their field. The trouble is, about half do not.

Vocational education needs to be more market-driven: The schools should be supplying what the labor market demands. Under a new Illinois plan called Education for Employment, the state will provide funding for vocational schools only if they offer programs in job areas where workers are needed. Companies have been invited to the schools to look at the curriculums -- some of which have not changed much since 1950. In the aftermath of the visits many obsolete courses have been dumped. The matching of educational skills to the job market is critically important for blacks and Hispanics. Says Charles Benson, director of the National Center for Research in Vocational Education at the University of California at Berkeley: ''I can assure you the federal government is not addressing the problem of steering disadvantaged people into careers with good job prospects.'' Under the proposed Perkins legislation, most federal money would flow to areas with a high percentage of poor kids. Yet nothing in the bill ensures that those youngsters would get into high-quality programs. The government should set aside money to reward schools that successfully bring black and Hispanic youngsters into careers with promising futures. -- Retrain older workers. While companies can take comfort in knowing that vocational schools are beginning to roll out a new, 1990s line of employees, they still face the uneasy situation of what to do with the obsolete workers they already have. Says Ernie Morris, president of Fred Jones Manufacturing in Oklahoma City: ''The single most important item in this country for the next ten years will be employee education and retraining.'' Perhaps no vocational school has responded more aggressively to the needs of the burgeoning adult education market than Oklahoma City's $20 million Francis Tuttle center. Built in 1981 and supported by tax dollars from five surrounding school districts, Tuttle caters to a society of lifelong learners: Students range in age from 16 to 60. High school students attend free; full- time adults pay $365 a semester. Classes run from 7:30 A.M. to 10 P.M., six days a week, and new students are allowed to enroll each Monday. Last year 10,000 adults updated their skills at Tuttle. When a student signs up for one of Tuttle's 28 programs -- whether it's building and grounds maintenance or instrumentation and control -- he or she takes an aptitude test that determines the starting point. From there, the student sets his own pace in individualized instruction that combines textbooks and videos with hands-on labs. The reward for passing all the course requirements: a certificate of completion or, in some cases, an associate degree. Says Carol K. Blalock, who entered Tuttle at 45 to learn automated manufacturing and robotics after being laid off from her electronics assembly job at AT&T: ''One reason I thought this was such a great program was that if you already understood something, you could whiz on through. I could get marketable skills in a shorter period of time.'' To lure industry to Oklahoma, the state offers to train workers for new facilities at no cost to the company at technical centers like Tuttle. Laments James A. Caillier, president of Delgado Community College in Louisiana: ''We're losing our industry to Oklahoma because they've done such a good job of packaging their technical programs.'' The U.S. can no longer afford to squander its human resources. To better mine its talent, the country must adopt an education policy that acknowledges the vast diversity of its students and offers options suited to their individual needs and learning styles. Vocational education is one option -- Toyota, IBM, and Lockheed are among the corporations that consider it a vitally important one.

CHART: NOT AVAILABLE CREDIT: SOURCE: OCCUPATIONAL OUTLOOK QUARTERLY, BUREAU OF LABOR STATISTICS CAPTION: THE FASTEST-GROWING OCCUPATIONS