Sandro Montresor (Gran Sasso Science Institute)

“Digital technologies and eco-innovative production processes and models. Evidence of the “twin transition” from Italian firms“

Abstract. This paper investigates the extent to which the twin transition unfolds at the firm level, by correlating firms’ investments in digital technologies with their propensity to eco-innovate production processes and models. Extending previous studies about Information-and-Communication-Technologies (ICT) and eco-innovations (EI) and drawing on recent literature about the main technologies of the new digital economy, we expect their impact on production-process EIs to be heterogeneous. Artificial Intelligence (AI) technologies are arguably more eco-enabling than internet-based ones and of other technological applications (like additive manufacturing), whose eco-innovative role could however be complemented by AI. Using the first wave (2019) of the new Permanent Census of Italian Firms by the National Statistical Office (ISTAT), we test for these hypotheses with respect to a large sample (about 155k) of Italian firms of any size and manufacturing industry. Results confirm that the contribution of the digital to the green transition at the firm level is selective and mainly driven by investments in the AI area. Investments in other digital technologies work more selectively than in AI and affect the EIs at stake only in their more “green enabling” components. As expected, new eco-innovative production processes and models benefit from bundling investments in different digital technologies but providing AI investments are in the bundle.

Joint with Antonio Vezzani