The main purpose of this study is to present the conceptual basis that supports science, technology, and innovation (STI) policy in Latin America and the Caribbean (LAC). It starts by clarifying STI relationship, both conceptual and empirical, to economic growth and it explains how market and coordination failures hinder innovation. Then, it discusses a variety of demand-and supply-side policies aimed at addressing these private sector and institutional insufficiencies. In the specific case of LAC, it examines the region's underperformance in innovation relative to both emerging and advanced economies, and analyses the degree to which scientific productivity and knowledge inputs have led to accelerated economic development. Finally, the publication presents five dimensions of success for STI policies based on international best practices that should stimulate innovation and economic growth and guide the IDB's work in STI in the region. Any dispute related to the use of the works of the IDB that cannot be settled amicably shall be submitted to arbitration pursuant to the UNCITRAL rules. The use of the IDB's name for any purpose other than for attribution, and the use of the IDB's logo shall be subject to a separate written license agreement between the IDB and the user and is not authorized as part of this CC-IGO license.