This is one of a series of training modules developed following several workshops on agricultural innovation systems (AIS) and value chains development (VCD) organized for principle investigators of ASARECA’s programs in 2010 and 2011. The modules were compiled to assist in facilitating similar training that participant trainees may organize. The principle behind teaching and presenting the two concepts of innovation systems and VCD is based on the fact that they are strongly related, and there is opportunity for thinking and applying the two together in most agricultural programs.

Globalization, urbanization and new market demands - together with ever-increasing quality and safety requirements - are putting significantly greater pressures on agrifood stakeholders in the world. The ability to respond to new challenges and opportunities is important not just for producers but also for industries in developing countries. This paper aims to present what "innovation response capacity" entails, especially for natural resourcebased industries in a developing country context.

There are divergent views on what capacity development might mean in relation to agricultural biotechnology. The core of this debate is whether this should involve the development of human capital and research infrastructure, or whether it should encompass a wider range of activities which also include developing the capacity to use knowledge productively. This paper uses the innovation systems concept to shed light on this discussion, arguing that it is innovation capacity rather than science and technology capacity that has to be developed.