This study explores the ways in which innovation and entrepreneurship can be used to drive an inclusive and sustainable economic development. This paper is structured around four key themes: the importance of innovation and its role in economic growth; the role of entrepreneurship in promoting inclusive development and generating employment opportunities; key policies that support innovation-driven entrepreneurship and the strategies required to build a sustainable and inclusive entrepreneurial ecosystem. The study employed a combined mixed-method design, consisting of a quantitative survey of 200 stakeholders and qualitative interviews and case studies. The descriptive statistics, correlation, regression and ANOVA were used to analyze the quantitative data and the thematic and content analysis were used in analyzing the qualitative data. The results showed that innovation and entrepreneurship positively contribute to economic growth (r = 0.842, p < 0.01) as well as to inclusive development and employment (β = 0.214, R² = 0.689, p < 0.001). The ANOVA results revealed that stakeholders’ perceptions of policy show a statistically significant difference (F = 4.362, p = 0.001). The thematic analysis revealed several key strategies, including sustainable practices, inclusive financing, capacity building and policy support. The findings support all the hypotheses, emphasizing that innovation, entrepreneurship and inclusive policies should be utilized together to achieve resilient, sustainable and equitable economic growth.