Innovation is what separates those that are thriving from those that are falling behind. The U.S. education system is desperately in need of innovation. Despite massive financial investments and numerous reform initiatives, the results remain the same--too many schools are failing our children.

To evaluate the extent to which states have created an environment that fosters innovation in education, the U.S. Chamber's Institute for a Competitive Workforce issued Leaders and Laggards: A State-by-State Report Card on Educational Innovation along with the Center for American Progress and Frederick M. Hess of the American Enterprise Institute. Their findings are disturbing--rigid bureaucracies, opaque and inefficient state finance systems, and barriers that prevent the removal of poor-performing teachers, to name just a few.

Tackling these challenges will require the administration, Congress, state governments, and businesses to unite behind fundamental reform. The principles that made this country great can do the same for education--principles like innovation, adaptability, creativity, accountability, and responsibility.

The Obama administration is sending the right signals on education reform. More importantly, they are matching rhetoric with money, namely the $4.35 billion Race to the Top fund. This grant program will be a catalyst for greater innovation, accountability, and higher standards in American schools. What remains to be seen is if the administration can resist heavy pressure from special interest groups hostile to sweeping reform.

Congress also has a role to play--strengthening and improving No Child Left Behind (NCLB), while respecting the fundamental features of this historic legislation. NCLB has already led to improvement among low-income African-American and Hispanic students, and we must build on this success.

States and local districts need to adopt sound business management principles in their schools, including giving principals more authority over budget and personnel decisions. Local officials must also insist on greater transparency surrounding spending, staffing, student achievement, and other aspects of school management.

Finally, the business community must actively engage on education reform. After all, who knows more about innovation, adaptability, and efficiency than the American businesses that contribute $2.5 billion to K-12 schooling annually? It's time that this money and know-how goes to support fresh ideas.

Innovation is the essential ingredient for reforming our education system and must be vigorously pursued in schools across the country. When it comes to our children's future, failure is not an option.