This report documents the results of a study sponsored by the California Department of Transportation to explore the role of new technology in the development of the California aviation system, and to identify potential state initiatives that could address both solutions to future problems and opportunities for economic development through the application of new technology. New technologies considered by the study include both those currently being implemented and those envisaged for the future, and include technologies directly applicable to the aviation sector as well as those that may influence the demand for air transportation. The report describes technology opportunities in the areas of aircraft, air traffic control, airports and surface transportation, and documents an extensive series of meetings and discussions with industry experts, and the results of a conference on New Technology and the Aviation System that was organized as part of the study. The report reviews the current state of the California aviation system and discusses the relationship between aviation and economic development. It examines the role of strategic planning in identifying and pursuing technological opportunities, and proposes a framework to incorporate a strategic element in the California aviation system planning process. The report concludes by identifying and describing a proposed program of nine state-sponsored initiatives that would lay the groundwork for a more aggressive application of new technology.