Why do some countries build innovation systems that foster learning, experimentation, and technological progress, while others struggle to move beyond dependency and stagnation? This book examines this central question through a multidisciplinary lens, combining insights from innovation systems theory, institutional economics, development studies, and global political economy. It offers a comprehensive framework for understanding the systemic roots of innovation failure in emerging and transition economies. It shows how fragmented institutions, weak absorptive capacities, and short-term policy horizons create persistent barriers to learning and capability building and how these obstacles can be overcome through coordinated governance, strategic coherence, and adaptive policymaking. Drawing on real-world examples and comparative evidence, this book is appropriate for researchers, graduate students, and policymakers concerned with innovation, industrial policy, and economic transformation in developing and emerging economies.