In recent years, despite its hostile environment and harsh climate, the wilaya of Ghardaïa has emerged as a leader in dairy production in southern Algeria. This article sought to analyze how the innovation system in the dairy sector has, positively or negatively, influenced the development of the sector in this region and identify the socio-economic factors and institutions that have contributed to it. To do so, a functional-structural approach was taken. The data used were collected from semi-directive interviews and focus groups with different stakeholders involved in the dairy milk sector. Market restructuring, but also the collective organization,
which is very common in the region, were found to be the main factors positively affecting the dairy sector. In addition, lobbying by the dairies and the asymmetry of power between dairy farmers and agri-food industrialists, a lack of collaboration and interaction between actors, a lack of coordination in knowledge development, and a lack of formal financing mechanisms to invest in livestock, turned out to be the factors hindering the innovation system. Finally, although the dairy sector in Ghardaïa attracts investors from the North of Algeria, and is thus a pronounced success in economic and organizational terms, the question of its sustainability is not being considered in these southern territories.
