This literature review examines the role of human capital formation in building innovative capacity in firms. The aim of the review is to develop a model of human capital development factors to be used as a basis for a larger research project where the factors that develop innovation capacity in enterprises will be investigated. The review finds that human capital stimulus factors are developed through appropriate human resource management practices, the learning and development system (in the enterprise) and the tertiary education system. The review also finds that the three key issues in developing human capital for innovation in enterprises are people, knowledge and creativity management. (Contains 1 footnote and 3 figures.)