The Panel identified a few areas for possible elaboration as pioneer projects in order to illustrate some of the concepts of reinforcing linkages between research and development activities and the production system. This pioneer project attempts to address the question of how to link small and medium industries, particularly in rural and remote areas, with existing research and development-related services. In order to bring a technology from development to demonstration to innovation, a complex set of resources is needed, involving input from research and development institutions and universities, consulting engineering firms, financing enterprises. The methodology uses a systems approach, beginning with the identification and assessment of needs, from which a specific project definition evolves. The methodology is also appropriate for subregional and regional technological co-operation, as a means of identifying and resolving priority problems that require resources from more than one developing country.