The global economy becomes more dependent on knowledge, on growth of production effectiveness and on harmonized interaction of all components of innovation system. It is necessary to develop smart specialization strategies for regions to increase innovation potential of regions and the whole country. In the innovation sector Riga region is the most competitive region of Latvia. In Latvia only 20% of enterprises are involved into innovative activities. The financing from state budget for science and research is less than in developed EU countries. One of the essential problems in the development of innovations in Latvia is insufficient cooperation between entrepreneurs and scientists. To promote and develop innovations in Latvia and its regions, it is necessary to increase government and private investments in the research and development; to develop innovation incubators, centres of competences in the regions.