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Objectives Adaptations to digitalization and climate change of all aspects of society are important issues of innovation management at the local and regional levels. The paper demonstrates: 1) the components of smart specialization in order to achieve municipalities and regions strategy goals; 2) the use of the mechanism of smart specialization to realize the entrepreneurial potential of the regional economy; 3) the introduction of smart specialization for the innovative development of the Ukrainian municipalities based on the European experience; 4) the indicators of building resilience of municipalities and regions innovative management to smart specialization. Material and methods Combination of dialectical approach to the knowledge of the components of smart specialisation and the methods of induction, deduction for the realisation of the entrepreneurial potential of the regional economy based on cross-industry clustering became the basis for the development of recommendations for municipalities Results Extending the sustainability of innovative municipal and regional governance to smart specialisation is to take into account the importance of using the main postulates of the smart specialisation mechanism to realise the innovation potential of the regional economy. Conclusions The priority directions of the agro-energy cluster model should be the establishment of a cluster model of "Government-Business-Science-Education" interaction. In order to achieve this goal, scientists from the Western Ukrainian National University justified and developed the Programme for Supporting Innovation in Areas of Smart Specialisation in the Ternopil Region for 2020-2023, which aims to implement innovative approaches to capacity building of the regional economy within the framework of smart, sustainable and comprehensive development.