Digitalization, innovation and environmental policies aimed at achieving sustainable production

Abstract

Humanity is running out of time to curb climate change, and its effects are becoming ever more intense and harmful to humankind. A change in habits and production methods is required in order to slow the advance of this scourge. This research seeks to provide quantitative information on the nexus between digitalization and sustainable production (SP). The analysis focuses exclusively on the 27 EU member states (2015–2019), all of which are characterized by a proactive stance towards environmental degradation. First, a synthetic index is constructed using cross-efficiency, in order to assess Europe's position in terms of SP. This index is then taken as the dependent variable in an estimation of the effects of the different aspects of digitalization measured in the Digital Economy and Society Index, as well as the environmental and innovation policies adopted in the EU. The generalized method of moments is used to examine the effect of the trend in SP. Results reveal that the level of income per capita does not determine SP and that it is more amatter of society's commitment to implementing practices that foster SP. Furthermore, the evidence found indicates that Europe has not yet been able to break the negative link between GDP and sustainability, despite the positive impact of all facets of digitalization, innovation and environmental policies.