For smart cities, data-driven innovation promises societal benefits and increased well-being for residents and visitors. At the same time, the deployment of data-driven innovation poses significant ethical challenges. Although cities and other public-sector actors have increasingly adopted ethical principles, employing them in practice remains challenging. In this commentary, we use a virtue-based approach that bridges the gap between abstract principles and the daily work of practitioners who engage in and with data-driven innovation processes. Inspired by Aristotle, we describe practices of (...) data-driven innovation in a smart city applying the concepts of virtue and phronêsis, meaning good judgment of and sensitivity to ethical issues. We use a dialogic case-study approach to study two cases of data-driven innovation in the city of Helsinki. We then describe as an illustration of how our approach can help bridge the gap between concrete practices of data-driven innovation and high-level principles. Overall, we advance a theoretically grounded, virtue-based approach, which is practice oriented and linked to the daily work of data scientists and other practitioners of data-driven innovation. Further, this approach helps understand the need for and importance of individual application of phronêsis, which is particularly important in public-sector organizations that can experience gaps between principle and practice. This importance is further intensified in cases of data-driven innovation in which, by definition, novel and unknown contexts are explored. (shrink)