Chile is increasingly looking toinnovation as a pillar of its competitiveness and an engineof growth to close the income gap with the Organization forEconomic Cooperation and Development (OECD) economies. Thecountry has doubled its per capita income since the 1990s.The growth slowdown in the late 1990s and early 2000s,however, raised concerns about that the old sources ofgrowth. While the rate of growth has picked up again,spurred by a favorable external environment, there is anincreased awareness of the importance of innovation togrowth and a desire to move toward a more diversified andknowledge-based economy, following the example of othersuccessful resource-rich economies such as Australia andFinland. Higher government commitments to innovation haveraised new challenges. The remaining of the report isstructured as follows. Chapter two discusses the importanceof innovation to Chile's economy and highlights theneed to define innovation policy within a comprehensiveframework that encompasses the entire production system.Chapter three organizes thinking around some basicgovernance principles for innovation systems drawing formthe public governance literature, the broader innovationliterature, and international experiences. Chapter fourapplies those principles to Chile's public institutionsand agents that will be responsible for defining andimplementing innovation policies. Chapter five examines therationale and guiding principles of regional innovationpolicies and offers recommendations for Chile'sregional innovation systems and their governance framework.Chapter six summarizes the main conclusions.