Heritage institutions house cultural and research content, which is the key source to stimulate innovation. Despite the potential, heritage collections are mostly inaccessible via digital mediums. We analyze the macro, meso and micro conditions of heritage organizations across Europe to identify the key determinants that foster innovation as reflected by the share of collection digitization and online publication. We find that organizations respond positively to an environment of high consumer digital literacy and sustainable resource allocation that enables slack, skilled staff and long-term strategic planning. Innovation is thus, in fact, enhanced by digital literacy from both producers as well as consumers.