The role of farming previously dedicated mainly to food production changed with an increasing recognition of the multifunctionality of agriculture and rural areas. It seems obvious to expect that farmers and rural actors adapt themselves to these new conditions, which are innovative and redefine their job. In many regions farmers can increase their income basis as rural entrepreneurs, developing new services and exploring new markets. Often, however, there is a gap between the need for change and farmers' willingness to adjust, and the insufficient capacities of innovation agencies and advisory services to effectively support changes. In this contribution we discuss the kinds of gaps between present societal demands, the related farm-level adjustments, and the capacities of innovation agencies and advisory services. We explore a conceptual framework that understands innovation processes as the outcome of collaborative networks where information is exchanged and learning processes happen. We argue that technical and economic factors used to analyse drivers and barriers alone are not sufficient to understand innovation processes. The related social and institutional aspects of cross-sector as well as intra-sector processes are explored. Overall, we emphasize that innovation functions as a process where farmers' and rural entrepreneurs' knowledge, motivations and values play an important role. We emphasize that institutions, administrations and extension services, whose mission it is to support changes, can become barriers to innovation if they do not acknowledge that the needs of farmers and of society have changed. The paper builds on the conceptual level work carried out in the on-going EU funded IN-SIGHT research programme with multidisciplinary teams from seven European countries. (Contains 2 tables, 1 figure and 5 notes.)