The idea that public sector organizations must innovate in order to meet the ever growing demands on them is now well established. We have, throughout this book, worked towards an understanding of innovation capacity and what contributes to it. We identified some of the main challenges that senior administrators and politicians regarded as important in their municipalities. They included issues like financial cuts, environmental and infrastructure problems and pressing societal issues like educational deficiencies, changing demography and unemployment and economic revitalization. Our respondents also mentioned a wide range of innovations that they regarded as significant in their cities and that should address the main challenges that they faced. These included new services, organizational developments, urban planning and IT developments and citizen engagement.