NEW YORK -- The Fashion Institute of Technology, which is celebrating its 50th anniversary this year, is facing bigger challenges than ever. While grappling with city and state budget cuts, FIT is also trying to keep pace with a rapidly changing fashion industry.

"The school is at a crossroads," said Allan F. Hershfield, president of the college, in a recent interview in his office. "Technology is changing so rapidly. And we also need to prepare ourselves globally so we can remain vital into the 21st century. Over the next few years, we have to intensify our ties to all the industry we serve and also pay attention to the new ones as they come up."

To stay vital past the millennium, FIT -- whose graduates include such industry luminaries as Calvin Klein, Norma Kamali, Byron Lars, Victor Alfaro, Andrea Jovine and Michael Kors -- is seeing more of a need to be innovative. Its new strategies range from adding more cutting-edge equipment to more creative fund-raising.

Some of these steps include:

A Quick Response-Electronic Data Interchange Center, which simulates information flow between retailers and manufacturers and which opened this year.

Creating the world's first college fragrance studio, where students can develop their own fragrances. It also opened this year.

Starting this fall, requiring fashion-design students to take such "survival" courses as business management, production and strategies for starting a business.

Launching an international marketing program within the next few years. The school currently offers a specialization in international trade.

Developing a separate computer-graphics program to be phased in within a few years.

Making foreign language a requirement for an increasing number of its undergraduate degrees over the next few years.

Establishing a center that would provide much-needed classroom space, additional auditoriums for special events and an incubator that would provide space for entrepreneurs to develop and test products.

Expanding its exhibits at the 20-year-old Museum of FIT beyond fashion. From this October through January 1995, for example, the Museum will showcase about 200 recycled products, from lamps made of reused thermos bottles and wire mesh to kelly bags made of recycled inner tubes.

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