The innovation process is founded on a high-quality education system at all levels, which trains scientists and technologists capable of generating innovations. Education is the most decisive factor in human development, yet in Mexico current statistics reveal a critical situation at every educational level, as only 1 out of every 10 children entering elementary school obtains a university degree, and less than 0.01% of the population holds a doctoral degree. In addition, international tests such as the Programme for International Student Assessment (PISA) reflect the low educational performance of Mexican students in several subject areas. The deficiencies found in the national education system negatively impact innovation indicators. Although there have been major initiatives to reverse underperformance in education, science, technology and innovation (STI), the country has actually seen its global competitiveness ranking fall from 55th in 2013 to 57th in 2015, and structural reforms in education, science and technology proposed since 2012 have still not been successfully implemented. This paper analyses the current status of the education and STI systems in Mexico and sets out some strategies to improve public policies to profit from the great competitive advantages that Mexico has as an emerging economy, with about 52 million economically active people and great untapped potential if innovations policies are implemented successfully.