This study investigates the pivotal role of youth-driven digital innovation in family businesses and its transformative impact on economic growth. Young family members bring fresh perspectives and advance use of technology, modernizing traditional enterprises and enhancing competitiveness. Using a mixed-methods approach with surveys, interviews, and case studies, the research reveals that youth-led digital strategies improve operational efficiencies, expand market reach, and create new business models, thereby stimulating economic growth through increased productivity and employment. The study also addresses challenges such as resistance to change and resource constraints, and discusses policy implications for supporting digital innovation in family businesses.