In Latin America and the Caribbean anecdotal evidence from business leaders, the press, and numerous government reports suggest many firms express a serious concern that they face internal employee skills deficiencies that limit performance, a phenomenon that has been labeled as a “skills gap.” This article explores the extent of national skills gaps; the importance of skills gaps relative to other business challenges; the industries facing the most severe skills gaps; and the prevalence of skills gaps by firm size. Based on international example, the article also discusses the ramifications of skills gaps on firms and regional competitiveness.