The qualitative study aims to illustrate the mechanisms and dynamics of the interaction between demographic decline and digital innovation. Biella and Vercelli—two municipalities and provincial capitals in the region of Piemonte—present the ideal conditions for a comparative case study. These two towns, at a mere distance of 40 km from each other, have similar population sizes, socio-economic conditions, budgets, and administrative characteristics. Yet, they have different levels of digital innovation. Specifically, while Vercelli focused on the digital provision of services, Biella prioritized digital inclusion, seeing it as a prerequisite to digital innovation. To reach this goal, Biella launched an initiative to increase the population’s digital literacy, targeting primarily people over the age of 54. Using qualitative evidence, we argue that the difference in levels of digital innovation can be at least partly attributed to the demographic decline. In particular, Biella’s population is aging at a considerably faster rate than Vercelli’s, and some aging indicators show extremely high values. These findings support the broader theoretical argument that demographic decline can hinder digital innovation and illustrate how intense aging can make administrations prioritize other endeavors instead.