This scoping paper draws on a review of the literature, with the aim of exploring how students’ capacity to innovate, can be developed in the Technologies domain of Systems Engineering. Innovation and the need to innovate has generated much rhetoric from business leaders, various State and Federal governments, as well as other agencies such as the Office of the Chief Scientist. The Melbourne Declaration on Educational Goals for Young Australians (Barr et al., 2008) places an emphasis on the role that schools through their educators and the curriculum play in building the capacity of students to think and act as innovators and creators of technologies. There is, however, tension between the traditional methods of teaching, and the need to embrace a more interactive mode that encourages 21st century skills of collaboration, communication, critical thinking and creativity (Keane, Keane, & Blicblau, 2016). Technacy, considered as a literacy is concerned with not simply teaching the purely functional skills, but rather, the ability to put technology into a social and environmental context (Seemann, 2009). While literacy and numeracy are critical aspects of educating students, Technacy is the new fluency that must be incorporated in the school curriculum to help develop Australia’s innovative capacity going forward. This paper will explore Technacy in education, and specifically on how the Technacy principles can be applied to the technology genre of design-led Systems Engineering, to assist teachers in developing students’ capacity to innovate.