Despite growing interest in the phenomenon of 'latecomer innovation,' the nature of this challenge - and its relationship to globalization - remain poorly understood. This article develops a theoretical framework that outlines the central policy challenges facing late innovators. It maintains that globalization has not fundamentally altered these challenges, but rather underlined the importance of surmounting them successfully. The article then employs this framework to compare China and India's progress in this regard. It finds that China has confronted the basic reform challenges more successfully, has more impressive innovation outputs, and has integrated into global networks more successfully. Yet it also notes the weaknesses of China's approach and the potential for these to constrain its development in the future.