By Dale Mezzacappa, The Philadelphia Inquirer Knight-Ridder/Tribune Business News

PHILADELPHIA--The future is technology, said IBM chairman and CEO Louis V. Gerstner, but America's schools are still rooted in the past.

So his giant company is giving $2 million over five years to the Philadelphia school system for a pilot project designed to bring city schools into the 21st century.

Gerstner said Philadelphia was only the second school district - after Charlotte-Mecklenberg in North Carolina - to get some of the $25 million IBM has set aside for its Reinventing Education program. The two systems were chosen from more than 200 applicants.

Gerstner heaped praise on Superintendent David Hornbeck's 10-point Children Achieving reform agenda, saying the district was making all the right moves toward gutting bureaucracy, retraining teachers, getting community members involved, setting high standards, and trying to establish a system of accountability.

``We have very specific criteria for becoming a grantee,'' Gerstner said. ``We are interested in school districts that have a clear vision and are committed to systemic change.''

A longtime critic of American schools, Gerstner said IBM would finance the creation of two model ``lab'' schools integrating technology into every facet of teaching.

The schools, which have not been chosen, will be a middle school and elementary school that feed into Olney High School. Olney High also will be central to the plan.

The schools will function like ``teaching hospitals,'' said Gerstner, with teachers coming from their home schools to learn new approaches to instruction that they will bring back, maintaining contact with the lab school through computer networking.

``The school classroom is the last bastion of ignorance in the use of technology,'' Gerstner said. ``...It's as if school systems went to sleep 50 years ago.''

Schools have not used the computers they have very well, he said. ``Schools created computer labs. They were something down there, like gym - now's the time for gym, or recess, or computer lab,'' he said. ``What hasn't been done is to engage teachers to use information technology to transform how they teach...language, science, writing. Computers can now correct grammar.''

In addition, he said, teachers should be able to plug in and do research on what they're teaching.

Before Hornbeck arrived on the scene, the Board of Education passed a $27 million bond issue to upgrade technology in the schools. Hornbeck said his ultimate goal was to have one computer for every six students; the current ratio of computers less than six years old is one for every 40 students.

Hornbeck is reorganizing the system from geographical regions into K-12 clusters around the 21 neighborhood high schools. Olney was chosen, Hornbeck said, because IBM wants to focus on students with limited English skills and those in special education. Of the first six ``clusters'' being put into operation, Olney is the one with the biggest multicultural population, he said.

The IBM grant will count toward the $50 million needed from the private sector to match the $50 million challenge grant to the Philadelphia district from former Ambassador Walter Annenberg. The challenge grant is designed to encourage top-to-bottom reform.

Mayor Rendell showed up at the announcement to thank IBM for its grant, but reiterated that the city has no more money to give the school system and that Hornbeck still has a way to go to convince city and state politicians that the district is doing everything it can to economize. END!A$3?PH-IBM

AP-NY-04-13-95 1125EDT

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