The report concludes that the current understanding of how the innovation process occurs demands a radical rethinking of the ways in which research for development is funded and in the strategies of international donors. Based on the understanding that the reworking of existing stocks of knowledge and creative imitation — rather than the creation of new knowledge through research — are the most important contributions of knowledge for development, new strategies should, the paper suggests, be put in place by donors to support these processes in developing countries. These new strategies should see an end of donors' hands-off project-based funding policies and a close engagement of donors with the innovation systems of recipient countries as whole. The authors stress the importance of investments in the business system and not only in public institutes and bodies.