**3.1 The digitalization-sustainability relationship**

Sustainability and digitalization stand as macro-trends shaping the current economy and society, thus urging major transitions [99, 100]. First, the two mega-concepts must be defined. Even though there is no univocal definition of the concept of 'sustainability', the most widespread definition is that was developed by the UN Brundtland Commission in 1987, which defined it as a "development that meets the needs of the present without compromising the ability of future generations to meet their own needs" [101, 102]. Rapid and continuous technological progress has marked the birth of a digital age which is changing society and economy [103]. Given the breadth of the topic, the consensus on the conceptualization of digitization and its derivatives, such as digital technology, big data, digital transformation, artificial intelligence, and cloud computing, has appeared imprecise in literature [104]. Gregori & Holzmann [105] argue that, on one hand, digitalization entails an emerging digital logic that has distinct relationships with logics of sustainability, but on another hand, implies a supporting logic for the development of value propositions that include the three key aspects of sustainable development: economic, environmental, and social value. However, the distinction between digitization and the digital transition has to be kept in mind: digitization means the translation of business processes into digital language so that they can be managed automatically; digital transition, in contrast, has economic, psychological and social dimensions, that is it does not only include the tools adopted by the company, but also and especially the organizational system and the digital knowledge of people.

Bleicher and Stanley [106] define digital transition as a major driver of growth and sustainability. At the base of sustainable change, it is argued that a more digitally oriented corporate culture has to be established before the implementation of technologies. Among the elements that play in such favor, Information and Communication Technologies (ICTs) and the Internet of Things (IoTs) have a fundamental role in advancing sustainability and in improving transparency or assessment abilities thanks to the contribution of big data analysis and management [100, 107]. Furthermore, a high level of development enhances entrepreneurial attitudes through various support policies that promote the digital transition [108, 109]. According to Ferreira et al. [110], entrepreneurial attitudes can have a positive impact on both the digital transition and the environmental transition. The digital transition of companies can be triggered through increased awareness in identifying opportunities and entrepreneurial abilities, without ignoring the complex environment in which these are inserted [111–113]. Entrepreneurship should be seen as a vehicle of economic, social, and digital transformation. In business terms, the two concepts of sustainability and digital transformation could converge into the so-called 'digital sustainability', which can unify the two strategic objectives to drive positive societal and environmental changes [114]. This chapter aims to better analyze and explore all these topics.

#### **3.2 Twin transitions: Consequences of Covid-19 on European policies**

Recently, economic, health and social emergencies have raised awareness of the environmental crisis (started in the 1970s) and have confirmed that digital transformation is one of the main enablers for building more sustainable economies and societies. The importance of technology is visible in the ability of a country to respond to a crisis: it was demonstrated that countries with a more developed communications infrastructure, with more advanced digital technology systems, are better placed to preserve economic activities and jobs [115]. Although defined as two different topics, the environment, sustainable mobility, infrastructure, technological innovation, artificial intelligence (AI), blockchain, Big Data, Internet of Things (IoT), etc. are all closely interrelated; The ecological and digital transitions represent

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

the new production paradigms of our society, as they are a source of growth and economic competitiveness that result in more innovative and sustainable industries and businesses, thanks to the development of new technologies. These reasons lead to defining the two transitions as 'twin transitions' as well as 'two sides of the same coin': sustainability cannot be achieved without technology; they must be studied and examined jointly. As mentioned by Veugelers et al. [116], the COVID-19 crisis has led to wider recognition of the importance of sustainable and digital transformation, which are global, profound, and irreversible transformations that have become two key targets of economic recovery. Modern digital innovations, such as machine learning techniques or AI, have seen exponential growth in their value, estimated to add around 14% to the global economy by 2030 [114, 117]. The containment from coronavirus and the need to provide a recovery of the world economy have confirmed the increasing role of new technologies and the importance of a required transition towards a more digital economy and society [115].

From a political point of view, the ecological transition and digital transition are crucial points in the current EU strategies, such as the EU's Digital Strategy and European Green Deal, which are the promotors of the recovery plan for Europe. Combined with the National Recovery and Resilience Plans (NRRP) for each EU member state, the initiatives are seen as a unique opportunity to transform the EU economy, making it both greener and more digital in a twin transition [116]. These transitions are also envisaged by several European macro-policies, in particular by the Next Generation EU (NGEU), through which the Recovery and Resilience Facility (RRF) has the ambitious goal of restructuring the entire European socio-economic system and providing substantial economic resources amounting to €68.9 billion in grants and €122.6 billion in loans, of which 37.5% of the plan will support climate objectives and 25.1% of the plan will support the digital transition [118]. At this point, it is necessary to give a definition of both transitions.

The green transition is an opportunity to put Europe on a new path of sustainable and inclusive growth, which also aims at reducing the dependence on fossil fuel imports and at improving the energy and resource security of the Union. From the general perspective of tackling climate change with the European Green Deal including the 'Fit for 55' package, the European Union needs to increase the annual yearly investments by more than 500 billion euros, compared to the previous one and other additional investments. The principle of equity will be a central pivot for these policies. The European Green Deal was launched by the Commission in December 2019; to this end, during one periodical meeting, the European Council stated that "The transition to climate neutrality will bring significant opportunities, such as potential for economic growth, for new business models and markets, for new jobs and technological development" [119]. The Fit for 55 package accelerates Europe's climate change challenge plan and contains 13 legislative proposals on energy and climate, which have the common aim of putting the European Union on track to meet the target of reducing greenhouse gas emissions by 55% by 2030 as set out in the Climate Act.

The coronavirus pandemic has accelerated the digital transition of our societies and highlighted the importance of digital technologies for Europe's future economic growth. To set out the Union's digital targets for 2030 and achieve these ambitions, the European Commission proposed "The Digital Compass", which requires stepping up investments in key digital technologies, including cyber security, cloud computing, artificial intelligence, data spaces, blockchain and quantum computing, and semiconductors, as well as in the relevant skills. To foster the digital transition, also in this case, the European Union needs to increase annual yearly investments by more than 100 billion euros. According to the Commission, the digital transition will also contribute to the green objectives, with synergies in many areas of a smart circular economy, ensuring equity and aiming at increasing the innovation and productivity of the EU economy, offering new and equal opportunities for people and businesses [120]. EU's digital strategy leverages the potential of ICT technologies to facilitate innovation, progress, and economic growth and aims primarily at developing the digital single market. The Digital Decade policy program, with concrete targets and objectives for 2030, will guide Europe's digital transformation with Skills, Digital transformation of businesses, Secure and sustainable digital infrastructures, and Digitalisation of public services. The Commission will pursue the EU's digital ambitions for 2030 through concrete terms and projected trajectories at the EU and national level, with key performance indicators to track progress towards the digital targets and an annual cooperation cycle to monitor and report on progress multicountry projects combining investments from the EU, Member States and the private sector [121].

In addition, as stated by Seele and Lock [122] digital technologies can considerably contribute to sustainable development goals. In an ever-changing and increasingly digitalized world, indeed, it is necessary to analyze the role that the technology development can play in achieving a more equitable society, in line with the 17 Sustainable Development Goals set in 2015 by the UN in the 2030 Agenda and with the integrated vision of the three dimensions underpinning the concept of sustainability: economic, social and environmental [102]. For instance, the development of smart systems connected to the Internet of Things or the development of digital tools useful to generate, use, transmit, or source electronic data for organizational activities, can generate unique opportunities to strategically address challenges associated with the United Nations Sustainable Development Goals (SDGs), ensure at the same time an equitable, environmentally sustainable, and healthy society [100, 123, 124]. These new tools that contribute to achieving specific targets could be defined in literature with the concept of "Digital Sustainability", defined by Mondejar, M. E. et al. [124] as "the effort of developing and deploying smart technologies to secure sustainable economic growth while considering and integrating the SDGs".