The impact of ICT, technological innovation, and digitalisation on achieving sustainable development goals in G20 economies
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Abstract
Digital transformation exhibits a dual nature: while it acts as a catalyst for sustainable development through innovation, efficiency, and inclusion, it simultaneously generates new risks such as energy intensity, inequality, and digital dependency. This study examines the long-run relationship between information and communication technologies (ICTs), digitalisation, technological innovation, and economic growth in the context of sustainable development for 14 G20 countries over the period 2000-2021. The analysis employs second-generation panel data techniques that account for cross-sectional dependence, heterogeneity, and structural breaks. The Durbin-Hausman and Westerlund-Edgerton cointegration tests confirm the existence of a long-term equilibrium relationship among the variables. Long-run coefficients are estimated by the Common Correlated Effects Mean Group (CCEMG) and Augmented Mean Group (AMG) models. The results indicate that digitalisation and economic growth have significant effects on sustainable development, whereas ICT exports and technological innovation display weaker linkages. The Dumitrescu-Hurlin panel causality test further reveals bidirectional causality between digitalisation and sustainable development, and unidirectional causality running from economic growth to sustainable development. Overall, the findings highlight the dual role of digital transformation as both a driver and a disruptor of sustainable development, emphasizing the need for balanced policy strategies that maximize digital benefits while minimizing sustainability risks assessment.
Keywords
Abstract
Digital transformation exhibits a dual nature: while it acts as a catalyst for sustainable development through innovation, efficiency, and inclusion, it simultaneously generates new risks such as energy intensity, inequality, and digital dependency. This study examines the long-run relationship between information and communication technologies (ICTs), digitalisation, technological innovation, and economic growth in the context of sustainable development for 14 G20 countries over the period 2000-2021. The analysis employs second-generation panel data techniques that account for cross-sectional dependence, heterogeneity, and structural breaks. The Durbin-Hausman and Westerlund-Edgerton cointegration tests confirm the existence of a long-term equilibrium relationship among the variables. Long-run coefficients are estimated by the Common Correlated Effects Mean Group (CCEMG) and Augmented Mean Group (AMG) models. The results indicate that digitalisation and economic growth have significant effects on sustainable development, whereas ICT exports and technological innovation display weaker linkages. The Dumitrescu-Hurlin panel causality test further reveals bidirectional causality between digitalisation and sustainable development, and unidirectional causality running from economic growth to sustainable development. Overall, the findings highlight the dual role of digital transformation as both a driver and a disruptor of sustainable development, emphasizing the need for balanced policy strategies that maximize digital benefits while minimizing sustainability risks assessment.
