Several countries are experiencing demographic decline, a phenomenon marked by shrinking and aging populations. Developed countries and, in particular, Italy, Japan, and South Korea are affected by these changes more intensely, prompting significant political attention in the last two decades. The combined effect of decreasing fertility rates and population aging is expected to profoundly transform several aspects of contemporary societies, as it threatens economic growth, public budgets, and the capacity of the public sector to sustain essential services and schemes such as healthcare, long-term care, public pensions, and education. Digital innovation is often perceived by governments and organizations as a potential solution to mitigate these challenges and even revert the demographic decline. Yet, these actors also acknowledge that current demographic trends can affect the capacity of local administrations to innovate, despite empirical research is critically lacking in this area. This study aims to address this gap by investigating how demographic decline affects digital innovation in Italian municipalities, using data from 110 provincial capitals.