Book excerpt: Many middle-income countries (MICs) that saw rapid growth in the 1990s and 2000s have been facing the danger of remaining in the 'middle-income trap' unless they shift from labour-intensive, low value-added production to higher value-added activities that require more advanced skills. Intermediate skills and vocational education and training (VET) systems that generate these skills are critical for addressing the challenges for MICs in achieving high-road development. This book examines the skill systems in Mexico and Turkey, with a focus on auto parts producers, and the implications of these systems for these countries' development. It adopts a multi-layered understanding of the term 'skill system', which comprises firm-level hiring and training practices as well as the national and global dynamics that influence these practices. Drawing on discussions around globalization and the convergence of economic activity vs. national institutions and divergence, as well as interviews with auto parts producers and stakeholders of the skill systems, the book examines how the participation of local firms in global supply chains and these firms' institutional environment affect the firm-level skilling practices. It highlights key differences in the role of the state in the skills systems of Mexico and Turkey and investigates the implications of skilling practices for the high/low-road development prospects of both nations.