SMEs represent a very important part of the European economy today, and within this SME group the creative sector is recently one of the fastest growing sectors. Our paper studies the innovation management of 105 creative SMEs in Flanders and the Netherlands, based on the innovation diagnostic instrument, developed by Mazzarol & Reboud (2006). On the side of the „innovation climate‟ we identified many stimulating factors such as the well developed infrastructure and proximity of logistics and suppliers and an innovative and stimulating life style in the global area of Flanders and the Netherlands. However, we identified many restricting legislations and regulations that seem to hamper seriously most creative SMEs. Above that, many creative SMEs fail to find sufficient access to capital to invest in their growing innovative activities. We observe that the Dutch creative SMEs find more easily access to external financial resources and governmental support and subventions than their Flemish colleagues. Finally, the use of managerial tools like a SWOT analysis or setting up a solid financial or business plan seems very uncommon but required among creative SMEs.