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This paper aims to establish the uptake of Internet of Things (IoT) by small and medium enterprises (SMEs) in the digital era in emerging economies. This study aims to 1) determine adoption of IoT by SMEs during digital era in emerging economies, 2) establish challenges faced by SMEs in implementing IoT in emerging economies, and 3) develop a framework for digital transformation for SMEs in digital era in emerging economies. Systematic literature review approach was used. Articles from Scopus database ranging from 2018 to 2023 was used. 57 articles were shortlisted out of 153 articles. PRISMA framework was therefore used to perform systematic review analysis. Results demonstrate that in emerging economies, SMEs do not or are slowly adopting IoT concepts, making them less competitive. The results also determine that although IoT has great promise in SMEs, the key constraint is a lack of strategic implementation frameworks for its deployment and widespread adoption. This study was therefore carried out to develop a framework that supports digital transformation for SMEs in the digital era for emerging economies. Results have significant managerial and practical implications as they offer some insights to SME managers on how they can improve on the uptake and adoption of internet of things in digital era.