Innovating public administrations, for instance by means of E-Government, becomes an increasingly important issue in order to satisfy growing demands of citizens and to reduce costs of public service provision. Demographic change in industrialized countries, namely societal aging and depopulation, has various influences on the development of E-Government strategies. On the one hand, elderly citizens use services of their local government more often than people of younger age-groups. On the other hand, they are less likely to use complex electronic services in general and E-Government in specific. In addition, municipalities have to deal with increased cost pressure and the aging of the workforce within their local administrations as a result of the demographic change. Our quantitative analysis focuses on identifying the perceived importance of problems related to the demographic change in German and Japanese public administrations, addresses what areas of reform are related to these problems and points out implications for the development of innovation strategies by means of E-Government. We contrast the developments in both countries with respect to both demographic situation and public innovation in order to derive possible implications for the future.