This book explores the coevolution of firms, sectors, regions, and national economies in the Global South and explains their economic performance as a dynamic outcome of interactions between the multiple levels of innovation systems. This book counters prevailing views on economic development and offers a unique contribution to the literature on economic catch-up. Whereas the traditional linear view of development has taken a “more is better” approach, this book advocates that latecomers should pursue detours or leapfrogging, which conforms with a “less is better” approach. Instead of the conventional prioritization of manufacturing, this book proposes prioritizing domestic ownership and knowledge in specific sectors and regions and asserts that no country has successfully developed a high-income economy without generating a certain number of globally recognized big businesses. Instead of placing priority on free markets as the Washington Consensus does, this book argues that economic catch-up is only possible with active and planned government interventions, which are needed to overcome latecomers’ disadvantages regarding barriers to entry at the middle-income stage.