This Economic and Sector Work paper, “Enhancing Agricultural Innovation: How to Go Beyond the Strengthening of Research Systems,” was initiated as a result of the international workshop, “Development of Research Systems to Support the Changing Agricultural Sector,” organized by the Agriculture and Rural Development Department of the World Bank in June 2004 in Washington, DC.

Rural extension plays a significant and irreplaceable role in an innovation system that creates, designs, validates, and promotes new ideas, solutions, technologies, and forms of management focused on the resolution of problems and satisfaction of the needs of farmers and rural inhabitants and the organizations that represent them. In view of the above, this document presents proposals for making rural extension a key part of innovation systems focused on rural territorial development.

The report builds on the 'towards a vision for agricultural innovation in Chile in 2030' report and is further based on a series of background papers and a consultation process that took place between December 2010 and May 2011. The current study is the third in a series of three that were agreed between the Government of Chile and the World Bank to support the development of a long-term agricultural innovation strategy. The first paper reviewed the functioning of the three main public technological institutes and recommended how their performance can be improved.

Situate within new institutionalism literature, this paper builds a complex system model of institutional analysis for adaptive governance. This model combines Young’s institutional environmental analysis method, elements of subsequent environmental governance projects models, and ideas of multiple institutional levels and drivers. By applying the model, policy instruments are identified that build agricultural producer livelihoods improving their adaptive capacity to respond to climate change and drought.

The paper discusses the work force development (Wfd) tool that places explicit focus on three functional dimensions of Wfd policies and institutions: (a) strategy; (b) system oversight; and (c) service delivery. Strategy refers to the alignment between workforce development and a country’s national goals for economic and social development. System oversight refers to the governance arrangements that shape the behaviors key stakeholders involved, including individuals, employers, and training providers.