More than two thirds of the population of the European Union live in cities. They consume about 80% of energy and produce up to 85% of European gross domestic product, but they are also significant producers of waste and high consumption of products. Cities have become centres of innovation, new technologies, and the source of many challenges the Union faces, from environmental pollution to social inequalities. Cities and regions are the most prominent contributors to persistent economic and environmental problems. Cities, however, offer new and more effective solutions for a better quality of life for inhabitants. The most efficient cities could be named intelligent cities, i.e., Smart Cities. Regional policy must become an accelerator of the growth of the innovative performance of cities and regions with a focus on key areas such as research, development and innovation, the business environment and the use of the potential and resources of cities and regions. Innovations, together with innovation policy, are conditioning the degree of technical and technological equipment of the region’s economy and thus complete a complex of mutual relations that cumulatively shape and become the organizational structure, and a parameter of the development of cities and regions.