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.

Weak public infrastructure may contribute to poverty and inequality. Studies have found that roads are a key factor affecting rural incomes in developing countries. Yet, there is relatively scant evidence of the economic impacts of rural roads at the individual household level. This study contributes to the literature by empirically analysing the effects of rural road construction on household income and income inequality in Nepal.