The focus of this report is the relationship between human development and culture. Culture is given a very broad definition to include not only the arts, literature and different forms of heritage, but also the assortment of other expressions through which a society shapes and reflects on its coexistence. The Report finds that modernization and globalization are threatening Chileans' sense of identity and argues that the country's structural modernization will be sustainable over time only if the process takes into account a wide range of factors such as the aspirations, fears, and feelings of its people. The average citizen must have the skills and sufficient cultural resources to understand the meaning of the changes taking place and to incorporate them in to his or her daily reality. The Report is an attempt to show that culture matters; that there can be no human development unless people feel that they belong to a national community of values, history and-above all-a common future. The Report has become an important tool for the design of public policies in Chile.