The need for the benefits of innovation to permeate mainly towards the less advantaged sectors of the population has directed attention towards small cities or towns in transition towards sustainability. The aim of this research is to enable small cities to manage their assets efficiently, investing in socio- technological innovation and creativity as a way to promote sustainable and inclusive development. A methodological guide for the development of energy and water management strategies allows small cities to provide intelligence by efficiently appropriating available technologies aimed at improving the quality of life of the population, which necessarily leads to greater care for the environment and the reduction of social inequality. Towns or small cities must offer smart solutions to the challenges of contemporary urban and rural life, solutions that improve the quality of life of their citizens and the economic viability of the city. Therefore, it is not enough to apply modern Information Communications Technology ICT to towns to make them smart. Efforts should extend to improving the ability of a given people to attract and advance their own innovation potential.