Twin Transition: Digital Transformation Pathways for Sustainable Innovation

Abstract

This paper examines how organizations and regions integrate digital transformation with environmental sustainability (“twin transition”). Based on 43 semi-structured expert interviews across 27 countries, we identify five empirically grounded insights. First, adoption is propelled by competitive pressure, external shocks, and rising regulatory and stakeholder demands. Second, success depends on internal capabilities—clear leadership vision and workforce skills—together with supportive regional innovation ecosystems. Third, deliberate technological synergies—especially digital twins for lifecycle optimization, Artificial Intelligence (AI)/analytics and Internet of Things (IoT) for monitoring, and blockchain for traceability—enable measurable gains in resource efficiency and environmental performance. Fourth, integration strengthens eco-innovation capacity, resilience to disruption, competitive positioning, and regional innovation dynamics. Fifth, persistent barriers remain; organizational silos, key performance indicators (KPIs) misalignment, rebound effects from digital infrastructures, and uneven regional capabilities. By linking enabling conditions, integration mechanisms, and barriers, the study advances theory and offers actionable guidance for managers and policymakers on realizing the twin transition, using descriptive counts to indicate salience within a purposive expert sample rather than to draw statistical inferences.