In today’s era, a country’s economy and society are continuously improved by entrepreneurship that utilizes digital technology. The current study, conducted among university students in Pakistan, examines the roles of digital aspects in moving toward digital innovation (DI) and digital entrepreneurship (DE).

The study is based on quantitative and cross-sectional data. A survey questionnaire was used to obtain responses from respondents recruited through the convenience sampling technique.

The results from structural equation modeling (SEM) analysis suggest significant effects of technology orientation (TO), entrepreneurial orientation (EO), and DI on DE. The impact of DI on DE is also significant. On the other hand, digital technology self-efficacy (DTSE) is not found to be a significant predictor of DI and DE. Moreover, DI is found to be a significant mediator, which mediates the relationships of TO and EO with DE. On the contrary, DI did not mediate the significant relationship between DTSE and DE.

The study’s findings would benefit policymakers and planners in developing policies to encourage the usage of digital technologies to provide solutions in entrepreneurship. The findings also support promoting DE to tackle business challenges and achieve organizational and academic goals.

The study emphasizes the roles of digital technology, innovation, and entrepreneurship in a developing context.