From digital literacy to Innovation 5.0: the strategic role of agility in enhancing entrepreneurial success

Purpose The purpose of this study is to investigate the influence of digital literacy (DL), entrepreneurial self-efficacy (ESE) and digital entrepreneurial orientation (DEO) on entrepreneurial success in digitally evolving economies. It introduces Innovation 5.0 as a mediating mechanism and explores the moderating role of agility in enhancing innovation outcomes. The research addresses how digital capabilities translate into performance within the dynamic and volatile entrepreneurial ecosystems of the Middle East. Design/methodology/approach Drawing on dynamic capabilities theory and social cognitive theory, the study uses a quantitative, cross-sectional design using data from 375 digital entrepreneurs across different Middle Eastern countries. Structural equation modeling was used to evaluate a moderated mediation model, with multigroup analysis used to assess robustness. Findings The results demonstrate that DL, ESE and DEO significantly enhance entrepreneurial success, with Innovation 5.0 serving as a strong mediating variable. Agility significantly moderates the relationship between DEO and Innovation 5.0, reinforcing its strategic role in performance optimization. The findings highlight the interplay between personal capabilities and technological innovation in fostering entrepreneurial resilience and competitiveness. Research limitations/implications The study is limited by its cross-sectional design, which restricts causal inference, and its focus on three Middle Eastern countries, which may limit generalizability. Future research should adopt longitudinal designs and expand comparative analysis across more institutional contexts. Practical implications Policymakers and ecosystem builders can leverage these findings to develop targeted interventions that enhance entrepreneurs’ agility and digital capabilities. Educational and training programs emphasizing Innovation 5.0 principles and agile strategies may foster more resilient, human-centered digital entrepreneurship. Originality/value This study contributes to the emerging literature on Innovation 5.0 by integrating it within a dynamic capability framework in the context of Middle Eastern entrepreneurship. It provides empirical evidence of the synergistic effects of agility, digital competencies and innovation in fostering entrepreneurial success under conditions of uncertainty.