This paper considers the interaction between digital technology and cultural organisations and the\ud challenges and opportunities this presents for practice and for policy. The paper is based on one of\ud eight 'digital R&D' projects supported by NESTA, Arts Council England and the AHRC, designed to\ud analyse the effects of digital innovation in UK arts organisations.\ud \ud The paper focuses on a series of residencies in three UK arts organisations. The research aims to\ud identify the cultural conditions which support or prevent short-term digital innovation becoming\ud 'embedded' in the ongoing practice of a cultural organisation. The paper considers differing practices,\ud attitudes and expectations between creative technologists and arts organisations. These differing\ud 'cultures of innovation' may help us to understand why digital innovations often fail to move beyond\ud temporary and pragmatic problem-solving towards more challenging, transformational effects on\ud organisational strategy and culture.