Inclusive growth requires more and better innovation. “Knowledge-based capital” is an additional indicator of skills, measuring the capacity to innovate and disseminate innovation. The stock of knowledge-based capital is far lower in Latin America (13 % of GDP) than in OECD countries (30% of GDP). Furthermore, in Latin America it consists mainly of the stock of tertiary education, whereas in the OECD countries it consists mainly of R&D expenditure (Figure 6). These situations illustrate why it is important to strengthen ties between higher education institutions and the private sector in the field of science and technology to better steer and promote R&D activities. It is of paramount importance to strengthen developments in governance for science and technology institutions so that an efficient, comprehensive institutional framework can be developed to disseminate technology and innovation. More attention needs to be devoted to the complementarity between Latin America’s education system and innovation capacity.