**3.3 The role of digital transition in guaranteeing sustainable development from a macro-perspective**

The digital revolution represents a huge opportunity to increase productivity, innovation, and employment, ensure wider access to education and culture and reduce territorial disparities; it represents a great social and environmental opportunity also because it is a source of access to an Integrated network of New big data [124, 125]. The digital marketplace allows for efficient transactions by ensuring financial gains for the producers despite offering reasonable prices, thus, merging socio-environmental and economic value [105].

However, the biggest open question in the literature and on policymakers' agendas is how the two transitions should be balanced. Indeed, the amount of pollutant emissions resulting from the increasing use of new technologies is often underestimated. To clarify. It is well known that new technologies are created to improve energy efficiency, to ensure a better allocation of resources and to give impulse to the circular economy, to foster decarbonization but also to reduce pollution and the loss of biodiversity, or to launch highly automated and intelligent production and business processes, etc.; however, it should not be forgotten that there are no technologies with

#### *Digital Innovation and Sustainable Development: Two Sides of the Same Coin DOI: http://dx.doi.org/10.5772/intechopen.112294*

zero impact on the environment currently (there are technologies with low or minimal impact on the environment, but not "zero impact"). Computers, data centers, the ever-growing connectivity of electronic devices, and simultaneous data sharing require continuous and increasing consumption of electricity, that if not generated from renewable sources emits greenhouse gases, especially CO2 emissions [126]. For example, according to a study by the Royal Society reported by the World Economic Forum, a single user who uses e-mail for work (with an average mail consumption) emits around 135 kilos of CO2 per year, which denotes that digital technologies contribute between 1.4 and 5.9% of the total to annual global emissions - impressive numbers when one considers that all international air traffic is responsible for just 2% of the total [127]. A turnaround is urgently needed. According to the Global e-Sustainability Initiative (GESI), the turning point is the increasing ability to generate, capture and transmit digital data and to analyze them in order to put them at the service of sustainability goals.

A recent study [124] has explored how digitalization can assist in attaining SDGs in the following five sectors, demonstrating how benefits can be achieved in each of them: food-water-energy nexus, industry, citizens' health and wellbeing, climate change, and biodiversity protection. For instance, digital technologies are up-scaling sustainable agricultural land and resources management and strengthening the associated productivity, services, and livelihood security worldwide (1st and 2nd SDGs- No poverty, Zero hunger); big data, advanced automated controls and the integration of the internet of things play an essential role in ensuring accessible water for all citizens, reducing energy consumption and enhancing energy efficiency and provide sustainable alternatives (6 and 7 SDGs -Clean water and sanitation, Affordable and clean energy); Digitalization contributes in decreasing CO2 emissions associated to transportation systems (11th SGD -Sustainable cities and communities); In climate research, multi-spatial–temporal climatic data form a baseline to understand climate variability and future projections, and to know how to preserve impacts on biodiversity (13th SDG - Climate action,); Sustainable and smart manufacturing, one of the key aspects of Industry 4.0, is secured by computer control and machineto-machine communication (9th SDG- Industry, innovation and infrastructure); Digital tools play a vital role in promoting well-being and improving quality of life through facilitating access to health care, e.g. with Telemedicine or Implementation and normalization of e-Health system (3rd SGD- Good health and wellbeing). Thus, the interconnection of SDGs to Digital transition is undeniable. In all the areas just listed, it is required that the workforce be highly skilled in the use of digital technologies; that is why the digital transition - which pursues this end - can be the unique process that will transform the economy and make it sustainable. "The benefits of big data integration in our daily lives can promote quality of life and drastically assist humanity towards the sustainable challenges to ensure human, biodiversity, and earth resilience" [124]. Governments can also track the recovery and facilitate research on policy effectiveness more promptly through the analysis of Big Data captured by digital payments.

Del Río Castro et al. [100] wrote another recent study regarding the use of digital technologies towards the achievement of the UN Sustainable Development Goals (SDGs); however, the authors largely ground their study on extra academic literature, with an explicit focus on the SDGs. This issue has led to the writing of a new scientific article "Sustainability through digital transformation: A systematic literature review for research guidance" [104] focused on analyzing the nexus between digitalization and sustainability. This relation emerged as extremely fragmented to

the author regarding sectors, functions, and even methodologies, thus calling for unified perspectives and overarching theoretical frameworks in the future developments of the topic; however, as mentioned by the author, the academic environment has drastically worked in picking up on the relationship between sustainability and digitalization, especially after the outbreak of the COVID-19 pandemic, and the number of published articles is continuing to rise. Not surprisingly, as mentioned in the previous paragraph (3.2), all policymakers' agendas and government agreements intend to pursue sustainable and digital growth paths by 2030 (e.g. the National Recovery and Resilience Plan in Italy is mostly based on two major missions: Mission 1 - Digitalisation, innovation, competitiveness and culture', i.e. digital transition, and Mission 2 - Green revolution and ecological transition [see 125]. These stimulate researchers to study these topics and create new literature.

Until now, as Guandalini I. states "Looking at the organizational types discussed on the relation between digitalization and sustainability, a first dramatic line can be drawn between 'business' and 'government'" [104]. The first line of research will be addressed in the following paragraph (3.4), but on the second line, it can be argued that the main themes involve policy development [123], support to specific stakeholders, or administrative sustainable optimization through digital technologies [128–130]. Consequently, the technology sector should provide data to enable monitoring of energy consumption and carbon emissions; regulators should develop guidelines on the energy proportionality of digital applications; political leaders should outline new rules to neutralize the negative consequences of uncontrolled digitization. With increasing regulations and environmental awareness of the government, the approach to innovation from the macro perspective has a huge impact on society: the macro-level approach, which consists of environmental and social factors like government and policies [131] provides new solutions that add environmental and social value, and that push firms to invest in new sustainable and digital solutions [132–135]. Finally, attention should be paid to the use of big data: cybersecurity of strongly interconnected systems through the cloud should be reinforced by institutions, while simultaneously attempting to close the digital poverty gap between countries. According to several authors [123, 136–138] big data represents the 'new oil' of the digital with their contribution to monitoring sustainability on a large scale and to sustainable IoT in relation to the concept of Industry 4.0 and digital manufacturing.

## **3.4 The digital transition in a sustainable corporate landscape**

Improving the sustainability of enterprises has become the winning strategy to address the particular environment that the COVID-19 pandemic and geopolitical conflict have led in these years. UN Sustainable Development Goal 9 aims to develop a resilient infrastructure, increase internet access to the least-developed countries, improve technological capabilities, and promote the integration of small-scale industries and enterprises into global value chains [139]. Indeed, the coronavirus pandemic led many firms to cut investments and postpone their further plans. However, there is growing awareness that its recovery could thus be a shock that accelerated the corporate sector's twin green and digital transformation, contributing to a more sustainable and resilient post-pandemic economy. Investments in digital technologies, indeed, are key drivers of the green transition and these motivate twin transitions. Nowadays, as a result of the studies, the biggest challenge of entrepreneurship is its contribution to achieving environmental and digital transitions [140, 141]. Indeed, a huge number of scientific articles explicitly address digital opportunities for sustainability as part

#### *Digital Innovation and Sustainable Development: Two Sides of the Same Coin DOI: http://dx.doi.org/10.5772/intechopen.112294*

of a business strategy in a new era of scientific and technological progress [47, 142]; for instance, Chen and Kamal [143] and Lee et al. [144] recognize that digitalization in the manufacturing sectors has a positive effect on sustainability development if challenges of technological and social changes are addressed.

Digital innovation and digital transformation enable companies to a dual aim: i) to achieve greater flexibility and efficiency, optimize production processes, generate value propositions for innovation ecosystems, and respond to market needs [145–147] and ii) to enable them to maintain market competitiveness and staying at the forefront of technological innovation [148]. The process of digital transformation manifests in new institutional arrangements, bringing about novel values, practices, and structures, for example accepted and customizable digital modules - ERP systems- or standard-setting digital infrastructures like product platforms and blockchain technology [149]. Digital transformation can have a strong potential in facilitating internationalization, e.g. with knowledge, leadership, digital servitization, and technological factors [150] or it may also bring out negative effects, e.g. the lack of technological knowledge and cultural factors, the inability of technological infrastructure in some international contexts, the new security risks associated with these technologies and the personality traits that limit participation, perception, learning and optimal use of these tools [151]. From a social perspective, for instance, digitalization changes labor market conceptions significantly [152], while from an ecological perspective, the increase in energy consumption can be enormous [153]. However, these negative effects on internationalization encourage firms to use smart digital channels to develop improved and efficient strategies [139]. As reported in the annual survey "EIB" [154], the percentages of firms that adopted advanced digital technologies in 2021, are 62% for EU and 66% for US firms, of which 46% of EU firms and 59% of the US have adopted steps to make investments more digital. However, the response from these firms was rather uneven with digital technology-leading firms forging ahead and US firms being more responsive [116]. Veugelers et al. [116] find that EU and US firms that have adopted advanced digital technologies are more likely to invest to tackle the physical and transition risks from climate change because more probably to have already invested or have further plans in Green technologies investments.

To sum up, although there are several studies in the literature on the evaluation of sustainable development and management ability in enterprises [155–157] there is a lack of further exploration into how to improve corporate sustainability from the perspective of digital transformation. Furthermore, it has been shown that those who adopt better management practices for technology adoption and firm performance have more possibility to twin green and digital technologies and track environmental, social, and corporate governance (ESG) metrics through these new technologies [158]. Thus, enterprises must continue to accelerate along this road with the help of their governments. For example, the adoption of investment in R&D to develop or introduce new products, processes and services, and innovative strategies, is relevant to the development of policies that will help move firms that are not green and not digital towards more sustainable investment decisions and expand and train their workforce; to avoid the twin transition leading to a twin polarization, policymakers should remove the barriers that trap the firms in persistent inactivity [116]. Ji et al. [103] state that "governments must realize that digital transformation is an important means to improve corporate sustainability". Moreover, as stated by Feliciano-Cestero et al. [139], Digital transformation can imply the use of digital technologies in many areas of business strategy, such as digital platforms, digital services [151, 159–162], digital ecosystems,

internet technologies [163–168] and information and communication technology [143, 162, 169], among the use of other advance technologies, as automation, artificial intelligence and big data analytics [147, 148, 167, 170–174].

From a territorial perspective, the Ministry of Enterprise and Made in Italy [175] has provided for an aid scheme to support new innovative and sustainable business investments in Italy, known as 'Sustainable Investments 4.0'. The measure provides for the granting and disbursement of subsidies in favor of investment programs proposed by micro, small, and medium-sized enterprises that comply with the current principles of environmental protection and high technological content, consistent with the Transition 4.0 plan, with priority given to those capable of making a particular contribution to the sustainability objectives defined by the European Union and to those aimed, in particular, encouraging the transition of enterprises towards the circular economy paradigm. Entrepreneurship has been considered a potential solution to big social and environmental challenges such as climate change and social inequalities [176–178]. According to recent studies, digital technologies enable the development of novel business models and entrepreneurial opportunities; they can be supportive of tackling the challenges sustainable entrepreneurs face [114, 149, 179–181]. As mentioned by Ferreira et al. [110], the environmental transition should serve as a driver of competitive advantage, while the digital transition needs to reach beyond the conviction that companies can resolve all their issues through an injection of technology but rather through constant updating and continuous staff training so that this transition does not emerge as an obstacle.

In the literature, there is an interest in the relationship between sustainability and digitalization and mapping the potential of digitalization benefits for sustainability issues of companies [182]. Several authors contribute to the theoretical development of sustainable entrepreneurship by presenting the concept of "value spillover" with captures the socio-environmental value (e.g., education and raising awareness). Accurately, as stated by Gregori and Holzmann "value spillover coupled with the role of digital technologies for enabling the formation of communities, co-creation activities, and broader stakeholder integration offers new perspectives on entrepreneurial value creation for sustainability" [105]. To summarize, entrepreneurship represents a path towards securing both the environmental transition and the digital transition [110].
