This article distinguishes research - the discovery of new knowledge - from innovation, which is understood to be the transformation of practice in a community or the incorporation of existing knowledge into economic activity. From a survey of roles served by vocational education institutions in a number of OECD countries the paper argues that vocational education institutions have a potentially crucial role in mediating between the creators of new knowledge - researchers and their institutions - and the users of knowledge. They are ideally placed to develop this role since innovation is a local activity and vocational education institutions are much more widely geographically dispersed than research intensive institutes. The paper concludes by posing six steps vocational education institutions should follow to establish a role in national innovation.