Digital transformation (DT) is reshaping governance worldwide, yet its translation into genuine innovation and sustainable public value remains poorly theorized in non-OECD contexts. The United Arab Emirates (UAE) provides a compelling case: while national programs such as Smart Dubai and the UAE Artificial Intelligence Strategy 2031 demonstrate visionary ambition, many public entities still struggle with fragmented systems, uneven skills, and cultural inertia. This review paper synthesizes global and regional literature to examine how DT drives Business Model Innovation (BMI) through two enabling capability systems—Enterprise Architecture (EA) and Digital Business Strategy (DBS)—and how Entrepreneurial Orientation (EO) moderates these effects. Guided by Dynamic Capabilities Theory (DCT), the paper integrates evidence from studies on collaboration, governance, technology integration, and capability development to develop a UAE-specific conceptual model. The review identifies critical gaps in linking strategy, structure, and culture, arguing that EA and DBS make digital transformation operational and directional, while EO makes it transformational. The proposed framework offers both scholarly and managerial pathways to advance public-sector innovation in the UAE.
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