Panama’s experience in designing and implementing innovation policy is recent. The country has made progress in learning how to elaborate pluri-annual plans and monitor the implementation of innovation policy. Nevertheless, major challenges remain: especially in guaranteeing pluri-annual budgeting for innovation; in improving the co-ordination of the promotion of science, technology and innovation with the national development strategy; and in scaling up initiatives in key priority areas. This chapter focuses on: i) the institutional setting and governance for innovation policy; ii) the national innovation strategy and policy mix as outlined in Panama’s National Strategic Plan for Science, Technology and Innovation (PENCYT) 2010-2014; and iii) the main implementation challenges.