High-quality economic development can be achieved by the improvement of total factor productivity driven by the digital economy. Based on the inter-provincial panel data of China from 2010 to 2020, the level of digital economy development is measured in multiple dimensions, and a spatial Durbin model is constructed for empirical testing. It is found that: the development of China’s digital economy promotes the improvement of total factor productivity and there is a spatial spillover effect, innovation efficiency plays a mediating role, and there is a nonlinear threshold effect of the level of government support on total factor productivity. As a result, the inclusive growth potential of the digital economy should be vigorously developed to achieve high-quality coordinated economic development driven by innovation.