The following is an excerpt from Joel Klein’s discussion of New York public education at the annual Social Enterprise Reception on February 5, 2008. Klein is chancellor of the NYC school system — the largest system in the United States, where over 1.1 million students are taught in more than 1,400 separate schools.

I think education is important in ways that are obvious to every human being out there. You think about what education did to your life, you think about the teachers who changed your life, you think about the knowledge you developed.

For the country and for the city, education is important for two reasons, and one is that we have a racial and ethnic achievement gap in this country that is the greatest shame of this great nation.

The idea that skin color or poverty can determine the quality of the education you get is wrong. It’s fine for rich people to have bigger houses, larger cars, more diamonds — but a better education is morally wrong.

That moral issue takes on another dimension as we move forward in an increasingly globalized competitive economy, and I think it’s going to create enormous economic challenges.

We cannot have an education underclass in an increasingly competitive global economy. If you watch what’s going on in the rest of the world, there are people out there — quite literally — looking to eat our lunch.

And it is so critical to the transformation to have people who are bringing entrepreneurial, innovative juices — who instinctively get accountability, who understand leadership and care deeply about management. In the world of education, when I talked like that in the beginning, people looked at me like I was nuts. This was an alien language.

But at its core, education is a service-delivery challenge — if you don’t lead it, manage it and create the proper incentives in order to make it happen, it won’t happen. It’s about cultural transformation. That’s why the kids from business school want to come and be a part of it.

The core leaders that I have at many levels in the system are not people who came from the education schools — they’re people who came from the business schools, and from the business sector.

That causes me a lot of political heat, but that’s just fine, because if you don’t inject entrepreneurialism, accountability, innovation, differentiation, all of those things — you know what? We’ll continue to get the same pitiful results that we have gotten for the last 50 years in American education.