Isabel María Álvaro Alonso

Digitalization as the link between sustainability and competitiveness - a case study of Europe

Abstract:
We are confronting a climate emergency and environmental degradation that demand immediate attention. The European Union has played a proactive role in establishing ambitious targets to address these urgent challenges. However, the approach taken, characterised by excessive regulation, has led to a phenomenon known as ‘greenlash’, where sustainability is perceived as an impediment to competitiveness. This perception is misplaced; competitiveness and sustainability share common objectives and are highly compatible. To fully realise the synergies between both, digitalisation serves as a crucial lever. Digital solutions promote efficiency, energy transition, and the circular economy, among others, thereby accelerating the decarbonisation of the economy while maximising economic benefits. Nevertheless, despite the European Union having coined the concept of the ‘twin transition’, it has not yet unlocked its full potential, limiting the enabling effect of digitalisation and Europe’s competitiveness.