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This paper reports on an investigation of emergent forms of educational practice arising as globalised processes and neo-liberal reforms confront nation-states and their specific national traditions and systems of education and training. Focusing on Victoria, Australia, the paper reports on the innovative 'capacity-building' educational practices that have developed within a small private training provider. Mainstream research has tended to theorise these capacity-building practices with functionalist research traditions, focusing on the interdependent organisational processes that sustain learning within organisations. Data from the case study provide partial support for this perspective on contemporary educational innovation but there are significant features of the registered training organisation (RTO) that are not adequately addressed within the functionalist framework. Critical social perspectives provide a way of extending the analysis of capacity-building by contextualising innovative educational practices within the wider social relations of contemporary capitalism. This reconceptualisation permits a more political understanding of capacity-building which is well illustrated in the case study.