This transition towards the adoption of digital innovation by the traditional entrepreneurship sub-sector is now what is considered as an integral part of the business practice. This systematic review investigates the interlinks between digital entrepreneurship, DT and innovation whilst highlighting the key drivers, challenges and opportunities for the entrepreneurs in a digital age. A comprehensive survey was carried out in three principal academic databases—Scopus, Web of Science and ScienceDirect, using specific keywords associated with digital entrepreneurship, digital transformation, innovation, and business. From the initial data set of 255 articles, the inclusion criteria narrowed the scope to 15 highly relevant studies published between 2019 and 2023. Interestingly, the results demonstrate that not only does DE lead to new business models but it can also contribute to sustainability by driving innovation in addressing economic, environmental and social issues. The review focuses on how do digital ecosystems empower the entrepreneurs in making use of data for both exploitation and exploration of businesses leading to business expansion by integrating the techniques of both exploitation and exploration by structural adaptive ambidexterity.