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This project, conducted by the Centre for the Economics of Education and Training (CEET) during 2003, set out to investigate the relationship between innovation and the provision of appropriate education and training in regional Australia. The project was designed as a pilot study with two main purposes: (1) To test whether and how the issues could be investigated, with the aim of using the findings as a basis for larger and more comprehensive studies in the future; and (2) To collect and analyse information about innovation and the provision of relevant education and training in some specific regions that would advance understanding of the major concerns and issues, both within the particular area and more generally in regional Australia. The Gannawarra Shire of northern Victoria was chosen for this pilot study because contacts made in the Shire indicated considerable support for investigating the issues and offered opportunities for access to local government, enterprises and training providers. Preliminary discussions and examination of published material also indicated substantial innovation in the region. The project comprised a search for sources of information about the Gannawarra region including geography, population, industries and employment; analysis of this material to gain an understanding of the major characteristics of the region; consultations with relevant people and organisations within and outside the region; and a survey of individuals and enterprises on the Gannawarra Business Register. Opportunities for presenting the preliminary and final survey results within the Shire to local enterprises and training providers enabled the findings to be discussed and contributed to ongoing refinement of the conclusions. Key findings include: (1) Considerable innovation is occurring in the industries and enterprises of Gannawarra, contributing to changes in the types of training being sought; (2) A balance of formal and informal provision of education and training in Gannawarra, although further investigation is recommended to determine that the balance is optimal to needs; and (3) Establishment of Local Learning and Employment Networks (LLENs) by the Victorian Government has been successful in strengthening relationships between educational providers, communities and industry in Gannawarra. Two attachments are included: (1) Regional Development, Skill Needs and Training Questionnaire; and (2) Initiatives of the LLENs in Gannawarra Shire. (Contains 10 figures and 40 tables.)