Despite its strong clusters and high level of entrepreneurial activity in urban centres, the Hamburg Metropolitan Region (HMR) faces important policy challenges to economic development, including low labour productivity and human capital. This chapter examines how innovation can enhance economic growth and productivity in the HMR, by looking at key drivers of innovation: (i) education and human capital; (ii) entrepreneurship and dynamic small- and medium-sized enterprises (SMEs); and (iii) digitalisation.