This paper attempts to develop a framework to clarify some of the processes which take place in rural technological change. It moves beyond an acceptable description of dynamic interaction, towards a model based on states of dynamic disequilibrium, where analysis needs to focus on the forces which move the economy and give rise to changes in resource use and social welfare. An attempt has been made to model a part of what goes on inside the ‘black box’ of technical and institutional innovation: especially the way in which different private, government and non‐government organizations interact over time, and how their aims and objectives are reflected through the dynamics of the mechanization process. Some lessons for practitioners involved in technological change are proposed, which may act as guidelines for policy analysis and implementation.