Driven by the cultural digitalization strategy, intangible cultural heritage paper-tearing art faces dual challenges of a technical inheritance gap and unbalanced industrial value. Taking paper-tearing art as an empirical research object, this study reveals three core sticking points in its digitalization process: inaccurate digital restoration of craftsmanship, superficial IP development, and broken industrial closed loop. It innovatively proposes a “three-dimensional driving” path, namely realizing the living inheritance of craftsmanship through dynamic digital twin technology, activating cultural symbol value via localized IP narrative reconstruction, and building a cross-domain integrated commercial ecosystem to unblock consumption transformation channels. Empirical results show that establishing an industrial integrated ecological path with coordinated development of the cultural chain, digital chain, and consumption chain can provide a replicable model for the digital transformation of small and medium-sized intangible cultural heritage.