This paper addresses the topic of how innovation based on information and communication technologies (ICTs) can contribute to human development. A theoretical framework is developed in two stages. Firstly, ICT-based innovation is conceptualized as involving technological, social and institutional innovations. Secondly, Sen’s capability approach is drawn on to theorize how such innovations can contribute to human development. The theoretical framework is used as a basis to explore a rich case study of the development and use of a hospital information system within the public sector of the State of Himachal Pradesh in India. The paper analyses both the potential that the system has to promote positive development outcomes in the State, but also the challenges which constrain that impact. Three human development themes are identified and discussed: strengthening processes to include the disadvantaged; empowering the patient and making communal voices count. Finally, it is argued that the theoretical approach in the paper may have applicability in other contexts where ICT-based innovations are aiming to support human development outcomes.