Low skill levels among rural workers put rural manufacturing at a competitive disadvantage, according to the "skills shortage" theory. Data from the ERS Rural Manufacturing Survey, conducted in 1996, suggest that is not happening. Skill requirements are rising, but manufacturers who reported major problems finding workers with specific skills were relatively rare, among both rural and urban firms. Moreover, the most common problem was in finding reliable workers with an acceptable work attitude, traits not usually considered skills and difficult to address through typical skill development programs. But the survey data also suggest a critical skills challenge for rural areas. Among high adopters of new technologies and management practices, the demand for computer, interpersonal teamwork, problem-solving and other "new" skills is rising exceptionally rapidly. Such firms are much more likely than others to report major problems finding adequately skilled workers (although the problem is no greater in rural areas than in urban). This suggests that, in the long run, rural participation in the new economy depends less on remedial skill training for rural workers than on helping them acquire cutting-edge new skills.