<p>By altering resource allocation and value-creation logic, digitalization has wrecked practical experiences gained over lengthy stretches of incremental innovation. To bridge the gap between established business procedures and the integration of new technology, we merge the concepts of digitalization strategy, innovation ecosystem, and modular architecture to help enterprises navigate highly unstable environments of the digital era. We also discuss how digitalization can change and enhance the hub firm’s innovation performance through the innovation ecosystem’s structure. Therefore, we designed a feedback model based on modular architecture perspectives to investigate value creation mechanisms through the dynamic synergy between stakeholders in the innovation ecosystem and digital resources during the ongoing digitalization processes. We further discover that digitalization spurs the hub firm’s innovation performance via two subsystems: the digital incremental innovation subsystem and the digital enabling innovation subsystem. These subsystems characterize numerous activities that occur during digitalization processes. Additionally, we identify that the hub firm’s digitalization has influenced the ways in which users, businesses, and the government have provided feedback and propose that building an innovation ecosystem to empower participants is a prolific lens to study digitalization, thus theorizing its implications for the organizational configurations of hub firms, which ultimately results in better performance.</p>