Impact of Digital Competitiveness on Sustainable Development: A Systematic Literature Review

doi:10.21203/rs.3.rs-5015873/v1

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Impact of Digital Competitiveness on Sustainable Development: A Systematic Literature Review

https://doi.org/10.21203/rs.3.rs-5015873/v1

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Digital competitiveness and sustainable development have attracted significant attention from researchers in academia. This study explores the impact of digital competitiveness on sustainable development through a thorough review of existing literature. It analyzes and discusses how digital competitiveness influences sustainable development. Using the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) framework, the paper conducts a systematic literature review of relevant articles sourced from the Scopus database. A total of forty-one articles spanning between 2000 and 2023 were reviewed. A striking finding from the evaluation is the prevalence of both positive and negative impacts across the literature. The study's findings have the potential to assist corporations, firms, governments, regulatory bodies, technology providers, academic and research institutions, financial institutions, and policymakers in developing strategies to achieve sustainable development goals through an investigation into the effects of digital competitiveness on sustainability. Further research can explore this area in economies that are less studied, such as low and lower-middle-income countries.

JEL code: Q01, O30

digital competitiveness

digital economy

digitalization

sustainable development

systematic review

PRISMA

How can governments customize digital sector strategies to tackle specific sustainability challenges?

What measures bridge the digital gap, ensuring fair access to digital infrastructure, notably in rural areas?

How do measures bridge the digital gap, ensuring fair access to digital infrastructure, notably in rural areas?

Which regulations effectively promote ethical digital technology use and protect data privacy?

How can international collaboration improve technology transfer for sustainable digital development, especially in resource-limited regions?

The global shift towards digital competitiveness, driven by ICT innovations, raises sustainability concerns amid growth prospects. Achieving the UN's 17 sustainable development goals demands collaborative efforts, leveraging digital technologies' potential(UN SDG, 2023). Despite this potential, optimizing the digital economy's competitiveness is crucial for researchers and policymakers amid the world's digital transformation(Beier et al., 2017; Hosan et al., 2022; World Economic Forum, 2023).

According to previous literature, most studies indicate that digital competitiveness has a positive impact on sustainability(Balogun et al., 2020; Bican & Brem, 2020; Kryshtanovych et al., 2023; Pu et al., 2022; Savchenko & Borodina, 2020; Vijayan, 2019; Volchik et al., 2021; Xu, 2022). No doubt in most of the region’s results proved that digital competitiveness promotes sustainability. But in few regions’ digital competitiveness infrastructure is not fully development. So, to promote sustainability we need to do proper investment in digital competitiveness area(Hosan et al., 2022; Imansyah et al., 2023; Ionescu-Feleagă et al., 2023). For the attainment of sustainability government institutions need to take responsibility of developing and implementing digital platforms(Ufua et al., 2021). Although, while promoting digital competitiveness we should not overlook the negative impact digital competitiveness(Bull, 2015). We should promote digital economy competitiveness in a sustainable way(Van Der Velden, 2018). As per the study of (Bhardwaj & Jain, 2024) strategic investments to promote digital competitiveness and sustainability, is vital for sustainable exports and SMEs' export competitiveness. Further, a study of (Baral et al., 2023) Industry 4.0-based circular economy positively impacts sustainability in SMEs through mediating variables such as economic, environmental, social, and operational performance.

In conclusion, while digital competitiveness presents many opportunities to improve sustainability, achieving its full potential will require addressing infrastructure development gaps, making strategic investments, considering the benefits and drawbacks, and implementing sustainable practices. To close these gaps and advance a digital economy that supports long-term sustainability, policymakers, governments, and industry stakeholders must work together. Understanding the impact of digital competitiveness on sustainable development is crucial for policymakers, businesses, and civil society. This research analyzes various economic contexts to elucidate the relationship dynamics, informing policy, business strategies, and societal interventions. The objective is to identify how digital competitiveness influences sustainable development across diverse economies through systematic literature review.

The need for a systematic literature review

The objective of the systematic literature review is to identify, combine, and evaluate data from previous studies rigorously and transparently. By synthesizing evidence, systematic reviews inform evidence-based decision-making and contribute to advancing knowledge within a field.

This paper adopts a qualitative research approach through a systematic literature review using the PRISMA model. Data is gathered from the Scopus database to assist in interpreting findings and identifying potential research gaps in this area. The Scopus database has been selected as the primary data source since it is the most widely utilized and expansive resource for evaluating scientific research in this field. According to a study (Boyle & Sherman, 2006), Scopus "provides the most comprehensive overview of the world's research output in the fields of science, technology, medicine, social science, and arts and humanities," with over 21,500 titles from more than 5,000 foreign publishers.

2.1 Resources

Research papers were selected from the Scopus database within the timeframe of 2000 to 2023, as papers prior to 2000 were not available. The keywords applied “digital economy," "digitalization, “digital competitiveness", "sustainable development," and "sustainable development goals.

2.2. Identification, screening, and eligibility

Throughout the review process, the initial step involves identifying and selecting suitable articles relevant to the specified keywords from the Scopus database. In April 2023, a search string was formulated based on predetermined criteria outlined in Table A1 as shown in Appendix in a separate supplementary file, resulting in an initial retrieval of 1876 articles from the Scopus database spanning from 2000 to 2023.

After completing the identification stage, screening of the selected articles took place using predefined inclusion criterion and further exclusion criterion. Table A2 as shown in Appendix in a separate supplementary file illustrates the five stages of inclusion and exclusion criterion. The primary criterion for selecting research papers (n = 1820) at the final publication stage was applied. Consequently, only articles (n = 816) meeting this criterion were included. Subsequently, articles in languages other than English were excluded, reducing the number to 761 articles. Finally, only journal articles were included through filtering, resulting in 711 journal articles.

Furthermore, titles, abstracts, and full papers were independently reviewed, as screening alone was not sufficient. Only papers that explored the relationship between the digital economy and sustainable development were selected. Consequently, 247 articles underwent full assessment for final inclusion, and ultimately, 41 articles were chosen for the systematic literature review after reviewing the full text of potentially relevant studies. The entire selection process of the 41 articles is depicted in Fig. 1, adopted from (19).

The review of 41 articles found that most utilized panel data analysis (32), followed by time series (4), experimental studies (3), and cross-sectional analysis (2). Panel data analysis often employed regression models, revealing a predominantly positive link between digital competitiveness and sustainable development, though exceptions existed. For instance, in European Union countries, the Digital Economy and Society Index showed both positive and negative effects on the Sustainable Development Goal Index.

Table 1

Countries investigated
No.	Types of economies	Samples	No. of articles
1	Lower middle-income economies	Vietnam	1
2	Upper middle-income economies	China, Serbia, Russia, Indonesia	21
3	High income economies	Poland, Italy, EU, Romanian counties, Slovak Republic	12
4	Mixed economies	OECD countries, Visegrad Group of Central European Countries, G-10 economies, 10 countries in the RCEP	7
Source: Authors’ Analysis

The articles predominantly focused on upper middle-income and high-income countries, with limited research on low-income, mixed, and lower-middle-income economies regarding the correlation between digital competitiveness and sustainable development (Table 1). There is a lack of studies in these economies, highlighting the need for deeper exploration, especially in low and lower-middle-income nations facing growth challenges. China contributed significantly to the research, with 18 articles, emphasizing its concentration in this area compared to other economies, where attention remains scarce.

Opportunities lie in exploring low-income and lower middle-income economies, following China's example of sector-specific research on digital competitiveness impact on sustainable development. Such analysis can guide economies towards achieving the 2030 sustainable development goals, especially in regions lacking full infrastructure development. Focusing on this aspect is crucial for progress towards sustainable development targets.

The study findings were primarily categorized into two groups: indicating either a positive correlation or a negative correlation between the digital competitiveness and sustainable development.

3.1.1. Linear positive relationship

The analysis revealed that 35 out of 41 articles highlighted a positive link between digital competitiveness and sustainable development, implying its assistance in achieving these goals. However, a negative correlation could lead to delays in reaching the 2030 targets, emphasizing the importance of digital competitiveness role in sustainable development efforts.

Table 2

Central themes and subcategories for exploring the link between digital competitiveness & sustainable development
Study	Countries	Year	Type Of Data	SDG	Method	Linear (Positive 1, Negative 2)
Lower middle-income economies
(Hung, 2023)	Vietnam	1 9 9 5 − 2 0 2 0	Panel Data	SDG	Regression analysis	1 (Vietnam's economic sustainability is positively impacted by digitalisation, green investment, and financial development, all of which promote sustainable growth)
Upper middle-income economies
(Voza et al., 2022)	Poland And Serbia	2022	Experimental Study	SDG 9	ANOVA Analysis	1 (The positive impact of digitalisation for SMEs is that it lowers carbon emissions and improves environmental sustainability)
(Mirolyubova & Voronchikhina, 2022)	Russia	2019	Panel data	SDG	Correlation Analysis	1 (Greater levels of regional digital transformation are associated with enhanced indicators of sustainable development in the economic, social, and environmental regions throughout Russia's regions)
(Imansyah et al., 2023)	Indonesia	2016	Panel Data	SDG 12	Input-Output Analysis	2 (Some ICT industries show greater sensitivity to CO2 emissions than average, which might raise environmental issues in Indonesia)
(Guo & Ma, middle incom2023)	280 Chinese Cities	2011–2019	Panel Data	SDG 11	Spatial Econometrics Regression	1 (Chinese cities' digital economies promote sustainable development by advancing green technology and modernising industrial structures)
(Liu et al., 2023)	Chinese Prefecture-Level Cities	2006–2019	Panel Data	SDG 13	Regression Analysis	1(digital economy shows positive impact on carbon emission intensity reduction)
(Y. Yang et al., 2023)	China (Cities in The Beijing-Tianjin-Hebei (BTH) Region)	2011–2019	Panel Data	SDG 11	Regression Analysis	1 (Digital technology enhances green development efficiency)
(Guo et al., 2022)	China	2012–2019	Panel Data	SDG 7.3	Spatial Durbin Error Model	2 (Due to infrastructure demands, data centres, and increasing electricity consumption from digital devices and networks, fast digitalisation may initially result in a rise in energy intensity)
(Wu et al., 2023)	China’s Listed Companies	2011–2020	Panel Data	SDG 17	Fixed-Effect Model Regression Model	1 (Corporate digitalisation reduces resource consumption, increases efficiency, and improves processes to improve both financial and environmental performance)
(Sun & He, 2023)	China	2010–2021	Panel Data	SDG 8	Regression Model	1 (Digital transformation promotes sustainable practices and environmental responsibility by greatly increasing the quality and quantity of green innovation)
(Zhuge et al., 2023)	316 Chinese New Ventures	2022	Experimental Study	SDG 9	Correlation & Regression Analysis	1 (Digital capabilities facilitate sustainable development by improving the environmental, economic, and social performance of new businesses)
(Jia, 2023)	30 Provinces in China	2013–2020	Panel Data	SDG 2	Regression Model	1 (In China, the digital economy greatly contributes to the development of sustainable agriculture)
(Zhou et al., 2022)	China (A-Share Listed Companies In 280 Cities)	2011–2019	Panel Data	SDG 8,9 & 11	Fixed-Effect Model and Random-Effect Model	1 (Sustainable development is significantly boosted by the digital economy)
(W. Yang et al., 2022)	30 Chinese Provinces	2011–2019	Panel Data	SDG 8,17	PVAR Model	1 (Digitalization significantly promotes green economic development, demonstrating a strong positive correlation between technological advancement and environmental sustainability)
(Xue et al., 2022)	278 Cities in China	2011–2019	Panel Data	SDG 13	Regression Model	1 (In China's cities, digital finance projects cut carbon emissions dramatically, suggesting the technology's potential for broad use and beneficial effects on the environment)
(Yu et al., 2022)	278 Cities in China	2011–2019	Panel Data	SDG 13	Regression Analysis	1 (In Chinese cities, the digital economy substantially contributes in reducing carbon emissions)
(C. Yang & Masron, 2022)	China	1995–2021	Time-series Data	SDG 7,13,15	Regression Model,	1 (China's green financing expansion increases energy use efficiency by more than 15% and lowers environmental pollution by more than 10%)
(He et al., 2022)	11 Coastal Provinces in China	2006–2016	Panel Data	SDG 14	Regression Model	1 (The Marine Equipment Manufacturing Industry in China benefits from digital technology through increased efficiency, innovation, and digital trade)
(Xue et al., 2022)	278 Cities (China)	2011–2019	Panel Data	SDG 13	Regression Model	1 (Digital finance encourages efficient and sustainable practices in financial operations and transactions, which helps to lower regional carbon emissions)
(Song et al., 2022)	China	2002–2019	Time-series Data	SDG 4 & 8	VAR Model	1(During the epidemic, China's digital economy maintained environmental regulations, improved resource efficiency, and promoted sustainable economic growth, all of which contributed to the country's social stability)
(Z. Wang & Zhao, 2021)	China	2021	Experimental Study	SDG 7	Sampling And Instrument Development	1 (Technology progression helps emerging nations create a sustainable digital economy)
(Jiao & Sun, 2021)	173 China’s Cities	2011–2018	Panel Data	SDG 11	Double difference technique	1 (In many Chinese cities, the development of the digital economy is favourably correlated with the expansion of the urban economy)
High income economies
(Ionescu-Feleagă et al., 2023)	European Union (EU) Countries	2019–2022	Panel Data	13 out of the total 17 SDGs (excluding goals 12, 13, 14 and 17).	Correlation Analysis	1 (The Sustainable Development Goal (SDG) Index in EU nations has a positive correlation with digitalisation)
(Huang & Zhang, 2023)	18 Manufacturing Industries In 38 Economies	2000–2014	Panel Data	SDG 13,17	Fixed-Effect Model	1 (Carbon emissions associated with exports are significantly reduced as a result of digitalisation, which benefits developed nations)
(Ferreira et al., 2023)	27 Member States of The EU (764 European Manufacturing Mines)	1850–2019	Panel Data	SDG 9	Partial Least Squares Method	1 (In European manufacturing multinational enterprises, digital technologies such as artificial intelligence, cloud computing, and big data analytics enable more environmentally and socially responsible production methods)
(Hong Nham et al., 2023)	European Countries	2009–2020	Panel Data	SDG 14	Correlation Analysis	2 (The short-term benefits of marine mineral sustainability may be limited by uneven digitalisation across public sectors, which could have different effects in different European nations)
(Miskiewicz, 2022)	EU Countries	2013–2019	Panel Data	SDG 7	Pooled OLS Regression Model	1 (Use of renewable energy is favourably correlated with improved e-governance, supporting EU countries' sustainable development goals)
(Imran et al., 2022)	EU Countries, 28 Countries (Including The UK)	2018–2021	Panel Data	sustainable development goals index (SDGI)	Panel Regression Modelling	2 (The integration of digital technology has inconsistent or negative impacts on the SGDI, exposing difficulties in their efficient application and influence on the objectives of sustainable development)
(Burinskienė & Seržantė, 2022)	27 EU Countries	1994–2022	Time-series Data	SDG 4,5,8,9 &12	Regression Model & Correlation	1 (Digitalisation makes it possible to strategically solve issues related to sustainable development, increase productivity, and advance societies that prioritise equality)
(Herman, 2022)	25 Countries from the EU	2018–2019	Panel Data	SDG 8 and SDG 9	Correlation And Regression Analysis	1 (Digital entrepreneurship enhances SDG attainment across EU countries by favourably correlating with creative and productive activities)
(Noja et al., 2022)	European Union (EU) Countries	2018	Panel Data	SDG 7,15	SEM	1 (Digital transformation, improved environmental performance, and energy innovations all have a positive impact on the sustainable economic development of EU member states)
(Camodeca & Almici, 2021)	40 Italian FTSE MIB Listed Firms	2016–2019	Panel Data	SDG 1–10, 12–16	Regression Analysis	1 (The adoption of digitalisation by Italian FTSE MIB companies is positively correlated with improved ESG scores, which furthers the achievement of the Sustainable Development Goals)
(Popescu et al., 2020)	Romanian Counties	2018	Cross-Sectional Analysis	SDG4	Cross-Sectional Linear Regression	1 (Digitalisation allows universities to expand into rural areas, improving access to education, stimulating local businesses, and encouraging environmental care)
(Habanik et al., 2019)	Slovak Republic	2000–2016	Time-series Data	SDG 9	Regression Model	1 (A focus on digital education and learning increases competitiveness in Slovakia's rapidly changing Industry 4.0 environment and promotes sustainable economic growth)
Mixed economies
(Huang & Zhang, 2023)	18 Manufacturing Industries In 38 Economies	2000–2014	Panel Data	SDG 13,17	Fixed-Effect Model	1 (Digitalisation and enhanced global value chain positions help lower the carbon emissions exported with, and support sustainable manufacturing methods)
(F. Wang et al., 2022)	10 Countries in The RCEP Regional Comprehensive Economic Relationship	2000 to 2020	Panel Data	SDG 3,4,10,11, &13	Correlation Analysis	1 (Trade openness and ICT adoption are key drivers of sustainable development because they promote digital inclusion and economic integration)
(Zhang et al., 2022)	G-10 Economies	2000–2019	Panel Data	Goal 7	Ordinary least square method	1 (Adoption of renewable energy is encouraged by increased usage of biomass and hydro energy, which both considerably contribute to sustainable growth)
(Spulbar et al., 2022)	35 Countries	2005–2018	Panel Data	SDG 1	A GMM Vector Autoregressive Model	1(Reduced rates of poverty are correlated with increased digital development, which improves economic opportunities in developing nations)
(Hosan et al., 2022)	Thirty Emerging Economies	1995–2018	Panel Data	SDG 7,8, 9, and 16	Advanced Econometric Methods	2 (High energy intensity hampers emerging countries' attempts to achieve sustainable economic growth)
(Esses et al., 2021)	Visegrad Group of Central European Countries	2015–2020	Panel Data	SDG 1,4,6,7,8,9,10,11,13,17		1 (During the pandemic, online learning enabled consistency, saving academic years and improving flexibility)
(Toader et al., 2021)	OECD Countries	2019–2021	Panel Data	SDG 4	ARDL	1 (Online education facilitated continuity during the pandemic, saving academic years and enhancing adaptability)
(Delgosha et al., 2021)	127 Countries	2017	Cross Sectional Data	SDG 9	Configuration Analysis	1 (Innovation and efficiency are enhanced via digitalisation, which fosters sustainable competitiveness)
Source: Authors’ Analysis

From 2000 to 2023, across various economies including lower-middle-income, upper-middle-income, high-income, and mixed economies, most articles consistently show a significant positive relationship between digital competitiveness and sustainable development, regardless of the specific Sustainable Development Goal (SDG) type. This trend is evident in countries like Vietnam, China, Russia, Indonesia, Serbia, Poland, Italy, European Union countries, Romania, and the Slovak Republic (Table 2).

The enduring positive relationship across all SDG goals underscores the lasting impact of digital competitiveness, especially when governments prioritize digital infrastructure development. Even in countries with underdeveloped digital infrastructure, achieving sustainable development goals is feasible through investments in the digital sector. Increased investment in digital competitiveness is anticipated to yield positive outcomes for sustainable development.

3.1.2. Linear negative relationship

Despite many studies indicating a positive correlation between digital competitiveness and sustainable development, some reveal a negative relationship. For instance, within the European Union, a regional study found no significant correlations between the Digital Economy and Society Index (DESI) and the SDG Index. Instead, negative relationships were observed between DESI and the Social Sustainability Index, particularly in specific EU regions during 2020 and 2021, with this impact intensifying over time. The study suggests focusing on both digitalization and sustainable development to amplify the positive influence of digitalization. Additionally, it recommends exploring causality between the two, extending analysis duration, and investigating relationships between each SDG Index component and DESI (Ionescu-Feleagă et al., 2023).

A study in China from 2012 to 2019 found spatial autocorrelation between the digital economy and energy intensity, with the digital economy significantly and negatively impacting energy intensity. This highlights its potential to contribute to sustainable development by reducing energy intensity. The study underscores the importance of strategic planning and policy measures to maximize digitalization's positive impact on energy efficiency (Guo et al., 2022).

Furthermore, research in Indonesia highlights the crucial role of ICT sectors in stimulating economic growth with high output and value-added multipliers. However, it stresses the need to address potential negative impacts on income distribution. The study underscores the importance of policy measures supporting ICT development while prioritizing social inclusivity to promote environmentally friendly and sustainable growth (Imansyah et al., 2023).

Integrating digital technologies with sustainability goals empowers organizations, governments, and individuals to positively impact environmental preservation, social equality, and economic advancement. Achieving this goal demands a comprehensive and collaborative approach, ensuring digitalization serves as a catalyst for positive change.

This study examines how digital competitiveness impacts sustainable development across different economies. Policymakers should prioritize comprehensive assessments of the digital sector and implement policies to ensure universal digital access and inclusion. Investing in digital infrastructure, particularly in underserved areas, is crucial. Measures like subsidies for affordable digital devices and enhanced digital literacy programs are essential for bridging the digital divide. Additionally, policies should address the environmental impact of digital technologies through energy-efficient practices and recycling. Encouraging collaboration among government, industry, and academia will foster innovation and attract investments for sustainable development. Regulatory frameworks should promote ethical use of digital technologies and data protection, while international cooperation should focus on technology transfer, cybersecurity, and global digital governance challenges. International cooperation is crucial for leveraging digital competitiveness, engaging in multilateral initiatives to tackle global challenges. Future investigations should explore the effects of digital competitiveness on the sustainable development of low, lower-middle-income, and mixed economies. It's essential to acknowledge the limitations of our study, particularly our reliance on the Scopus database for this systematic literature review. Subsequent research could utilize alternative databases such as PubMed, Web of Science, and Google Scholar to widen the scope of analysis. Additionally, our study exclusively examined articles published in English, indicating potential for further exploration in other languages.

Conflict of Interest Statement

The authors declare that there is no conflict of interest in this research work.

Author Contribution

NK wrote the introduction, and discussion part.VA wrote the methodology part and conclusion.All authors reviewed the manuscript.

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Impact of Digital Competitiveness on Sustainable Development: A Systematic Literature Review

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The need for a systematic literature review

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