Innovation has been championed as necessary to address the diverse and cumulative impacts facing coastal communities. Yet the status and capacity for innovation in coastal areas is not well understood. We present the results of a four-year study supported by the Australian Research Council examining vulnerability and governance in rapidly growing Australian coastal communities. We uncovered innovations to respond to vulnerability, as reported by stakeholders in coastal and community sectors, along with barriers to innovation. Innovation is occurring, but rarely at the scale that will effect transformation. All too familiar barriers to innovation include financial and human resource constraints, government ambit that reduces flexibility and a culture of failure avoidance. Innovations were most effective where individuals and groups drew on an extensive range and diversity of networks and sought impact beyond their organisational mandate towards community resilience. High individual and community capacity prior to impact (social networks, resource mobilisation skills, experience/knowledge) improved the efficacy and sustainability of innovations. The findings provide further evidence of the importance of investing in communities before, during, and following crisis—in other words, continually.