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This paper raises questions regarding the ability of new qualifications frameworks and assessment systems to promote innovation and social inclusion. Of interest in this paper is the centrality of tacit skill in promoting innovation. Tacit skill is central to innovation, although its positional character is not well understood by policy-makers. It is argued that the relationship between tacit skill and innovation throws doubt on the relationship between assessment led change, and on the social and economic objectives of New Labour (in the UK) and the Labour-led Coalition (in New Zealand). This paper also reviews recent changes in the funding of higher education in New Zealand and in the UK, and explores the impact of economic change on the competition for advancement through education. This paper concludes by arguing that innovation and social inclusion are not compatible.