Innovation is the process by which knowledge is transformed into products and services which in turn fuels economic development to create wealth and generates improvements in the standard of living. with the advance of technology, social networks that play a fundamental role as a medium for the spread of information, ideas, and influence among its members have taken a form of digital city to offer a range of online services, including access to social environments, community services, and e-commerce to its infohabitants. This study investigates how social network theories can be used to design and manage a web-based digital city that connects entrepreneurs to influential factors of innovation (e.g., supply factor, demand factor, industrial support activities, business strategies and structures) and consequently enhances the innovation process. A conceptual entity-relationship diagram is proposed; design principles and an implementation prototype are discussed and presented.