R&D investment in Latin America remains significantly lower than in the OECD economies, and a large share of the investment is by the state, as shown by the OECD studies on innovation policies in Latin America (Colombia, 2014; Peru, 2011; Mexico, 2009; and Chile, 2007). Businesses in the region spend little on R&D, mainly because of conditions that limit the profitability of such investment. In particular, total R&D expenditure in Latin America stood at around 0.4% of GDP in 2010, with private R&D representing around a quarter of the total. Attracting FDI provides an opportunity to develop skills and innovation in Latin America, but only if the investment flows are more closely tied to policies on innovation and structural change. FDI can be understood as a vehicle for innovation, since it enables the introduction of new technologies and potential technology spillovers. Moreover, FDI creates ties with