Latin America missed opportunities for rapid resource-innovate or even take advantage of technological based growth that similarly endowed countries-advances abroad. Second, the period of inward-looking Australia, Canada, Scandinavia-were able to take industrialization discouraged innovation and created a advantage of. Fundamental to this poor performance was sector whose growth depended on artificial monopoly deficient technological adoption driven by two factors.rents rather than the quasi-rents arising from First, deficient national "learning" or "innovative" technological adoption, and at the same time capacity, arising from low investment in human capital undermined resource-intensive sectors that had the and scientific infrastructure, led to weak ability to potential for dynamic growth.This paper-a product of the Office of the Chief Economist, Latin America and the Caribbean Region-was prepared as a background paper for the region's flagship report, From Natural Resources to the Knowledge Economy (2001). Copies of the paper are available free from the World Bank,