Presently, sheep (1096 millions) and goat production (677 millions) are the second and fourth largest livestock groups at the world level, respectively. In industrialized countries, sheep farming is more important (40.0%) than goat production (4.6%). During the last 15 years, the number of sheep has diminished at the world level, whereas the number of goats has strongly increased. Overall, production of small ruminants (meat, milk and fiber) grew substantially in developing countries, but stagnated or decreased in industrialized countries. Significant progress in research was achieved during recent years with small ruminants, particularly in the field of biotechnology. Transgenesis and other relevant areas of research will develop further in the near future, meanwhile, cloning, embryo transfer, etc. have already interesting applications. Identification of genetic mechanisms explaining the polymorphism of certain characters, e.g. alpha-s1 casein content of goat milk can have interesting consequences in future selection programs. However, there are still large discrepancies between the availability of scientific knowledge and its application in sheep and goat husbandry in most production areas. Consequently, a strong effort has to be made to improve research efficiency and particularly technology transfer. Due to the high research costs, the organization of regional research and development networks should allow, in the end, the best results. Development actions in the sheep and goat sector show a definite delay compared to other animal productions. To become more efficient, research in this field must apply more specific methods directed to the reality of small ruminant production. Research and extension planners must accept the role of the breeders as far as decision making is concerned, and define sustainable policies, especially at the levels of structures of national and international development, but also by providing efficient tools to facilitate decision making.