This paper links development approaches with innovation systems theory and social inclusion concerns. In exploring the relationship between development and knowledge, we propose a sequential analytical model that considers values, facts and policies as a coherent whole. This allows us to go deeper into the question of how policies for promoting the production and use of knowledge able to foster different facets of social inclusion can be formulated and implemented. We propose to call such policies “democratization of knowledge policies”; they are one of the means to achieve inclusive development. We provide examples of how these policies work in practice, and explore how the university, a vital part of any national innovation system, can play a role in the emergence and consolidation of democratization of knowledge. Universities that embrace that role may be considered developmental universities; they fulfill it in great part by providing effective incentives to include in their research agendas the kind of problems whose solutions can lead to an enhancement of social inclusion. However, developmental universities cannot function in isolation. It is argued that their effectiveness depends on the rise of a sustained and strong demand able to put knowledge at the direct service of shared social goals, among which diminishing inequality is particularly important. The paper presents a case that illustrates an ongoing transformation towards a developmental university.