Purpose. The purpose of the article is to provide an assessment of the governance of the agricultural system in Albania, by analyzing the challenges for the future operation of Agricultural knowledge and innovation system (AKIS) under the influence of two main factors, such as (і) the country’s innovation performance and (іі) universities and research institutions (URIs), for the rapid and effective adaptions of innovation and new knowledge. Results. In the Balkan region, there is a rapid dynamic (according to the income group) of countries related to innovation (Bulgaria is the 2nd after China), and some of them (Slovenia, Croatia) have overtaken old members of the EU; we prove the importance of Albania’s innovation performance and URIs for competitiveness and future operation of AKIS. Innovation and the frequent variability of technologies and effects on producers, consumers and markets can accelerate growth and competitiveness but can create also undesirable effects. The economic decisions, governance of the agri-system and resources under the influence of the rapid developments require an adequate research-decision-making focus. Science-based-guided institutions are essential for improving the country’s innovation performance and the role of URIs for the efficient adaptions of innovation, new knowledge and techniques in agri-sector as two main pillars for the future of AKIS in Albania. Scientific novelty. Most studies analyze the functioning of segments of the agricultural system (e.g. crop, livestock, etc.) or the value chain (e.g. producers, consumers) and identify the low presence of social capital in Albania, using the individual as the unit of analysis (e.g. farmer level) and the company (e.g. factors, sources). It is paid little attention to the renewal of social capital, especially in the context of current migration in Albania. Therefore, we provide an aggregate analysis of agricultural governance, by suggesting the efficiency of (formal) institutions for renewing (missing) social capital, improvement of innovation performance and the role of URIs to policy solutions and future AKIS. Practical value. Through a functional AKIS, the problem of innovation, policy formulation in the agri-sector and centralization approach or centralized policies can be overcome, by creating premises for an efficient-scientific-entity and a smart-regional-approach, including new networks of researchers and the environment for business sophistication and innovation ecosystems.