In iCRA, we have thought long and hard about innovation. We were therefore proud to lead a 5-year project on behalf of Agrinatura and FAO, supported by the European Union, which sought to identify and demonstrate how to strengthen the capacities of individuals, organizations and partnerships to innovate in smallholder agriculture.  This report of that Project –  Capacity Development for Agricultural Innovation Systems, or “CDAIS” – summarises what we all learned about the capacity for innovation, as experienced by over 30 innovation partnerships across 8 countries. These partnerships represented a range of contexts: crops, livestock, aquaculture, value chains, seed, extension, etc, in countries with very different organizational landscapes (Guatemala, Honduras, Angola, Burkina Faso, Rwanda, Ethiopia, Bangladesh, Lao PDR). The common feature was the need for the different actors in these partnerships and countries to work together to achieve their goals. The report shows how to develop  “functional capacities”, as a vital complement to “technical” and “agribusiness” capacities, to allow partnerships to build trust, jointly innovate and improve agricultural livelihoods.