Innovational Duality and Sustainable Development: Finding Optima amidst Socio-Ecological Policy Trade-off in post-COVID-19 Era

Sinha, Avik and Adhikari, Arnab and Jha, Ashish Kumar (2021): Innovational Duality and Sustainable Development: Finding Optima amidst Socio-Ecological Policy Trade-off in post-COVID-19 Era. Published in: Journal of Enterprise Information Management (2021)

Abstract

Purpose: This study attempts to analyze the socio-ecological policy trade-off caused by technological innovations in the post-COVID-19 era. The study outcomes are utilized to design a comprehensive policy framework for attaining sustainable development goals.

Design/methodology/approach: Study is done for 100 countries over 1991-2019. Second-generation estimation method is used. Innovation is measured by total factor productivity, environmental quality is measured by carbon dioxide (CO2) emissions, and social dimension is captured by unemployment.

Findings: Innovation-CO2 emissions association is found to be inverted U-shaped and Innovation-Unemployment association is found to be U-shaped. Research implications: Study outcomes show the conflicting impact of technological innovation leading to policy trade-off. This dual impact of innovation is considered during policy recommendation.

Social Implications: Policy recommendations in the study show a way to internalize the negative social externality exerted by innovation.

Practical implications: The policy framework recommended in the study shows a way to address the objectives of SDG 8, 9, and 13 during post-COVID-19 period.

Originality/value: This study contributes to the literature by considering the policy trade-off caused by innovation and recommending an SDG-oriented policy framework for the post-COVID-19 era.

• Item Type: MPRA Paper
• Language: English
• Keywords: Innovation, SDG, COVID, CO2 emissions, Unemployment
• Subjects: Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics

References

AL-Dalaeen, Q.R., Sivarajah, U. and Irani, Z. (2021), “Determining sustainability key performance indicators for food loss reduction”, Journal of Enterprise Information Management, Vol. 34, pp. 733-745.

Amri, F., Zaied, Y.B. and Lahouel, B.B. (2019), “ICT, total factor productivity, and carbon dioxide emissions in Tunisia”, Technological Forecasting and Social Change, Vol. 146, pp. 212-217.

Anholon, R., Rampasso, I.S., Martins, V.W., Serafim, M.P., Leal Filho, W. and Quelhas, O.L. (2021), “COVID-19 and the targets of SDG 8: reflections on Brazilian scenario”, Kybernetes, Vol. 50, pp. 1679-1686.

Anthony Jr, B., Majid, M. A. and Romli, A. (2018), “A collaborative agent based green IS practice assessment tool for environmental sustainability attainment in enterprise data centers”, Journal of Enterprise Information Management, Vol. 31, pp. 771-795.

Antweiler, W., Copeland, B.R. and Taylor, M.S. (2001), “s free trade good for the environment?”, American Economic Review, Vol. 91, pp. 877-908.

Arrow, K.J., Chenery, H.B., Minhas, B.S. and Solow, R.M. (1961), “Capital-labor substitution and economic efficiency”, The Review of Economics and Statistics, Vol. 43, pp. 225-250.

Bag, S., Pretorius, J.H.C., Gupta, S. and Dwivedi, Y.K. (2021), “Role of institutional pressures and resources in the adoption of big data analytics powered artificial intelligence, sustainable manufacturing practices and circular economy capabilities”, Technological Forecasting and Social Change, Vol. 163, p. 120420.

Balsalobre-Lorente, D., Sinha, A., Driha, O. M. and Mubarik, M. S. (2021), “Assessing the impacts of ageing and natural resource extraction on carbon emissions: A proposed policy framework for European economies”, Journal of Cleaner Production, Vol. 296, p. 126470.

Benavente, J.M. and Lauterbach, R. (2008), “Technological innovation and employment: complements or substitutes?”, The European Journal of Development Research, Vol. 20, pp.318-329.

Beynon, M.J., Jones, P. and Pickernell, D. (2019), “The role of entrepreneurship, innovation, and urbanity-diversity on growth, unemployment, and income: US state-level evidence and an fsQCA elucidation”, Journal of Business Research, Vol. 101, pp. 675-687.

Boone, J. (2000), “Technological progress, downsizing and unemployment”, The Economic Journal, Vol. 110, pp. 581-600.

Chen, M., Sinha, A., Hu, K., and Shah, M. I. (2021), “Impact of technological innovation on energy efficiency in industry 4.0 era: Moderation of shadow economy in sustainable development”, Technological Forecasting and Social Change, Vol. 164, p. 120521.

Cheng, Y., Awan, U., Ahmad, S. and Tan, Z. (2021a), “How do technological innovation and fiscal decentralization affect the environment? A story of the fourth industrial revolution and sustainable growth”, Technological Forecasting and Social Change, Vol. 162, p. 120398.

Cheng, Y., Sinha, A., Ghosh, V., Sengupta, T. and Luo, H. (2021b), “Carbon tax and energy innovation at crossroads of carbon neutrality: Designing a sustainable decarbonization policy”, Journal of Environmental Management, Vol. 294, p. 112957.

Chien, F., Anwar, A., Hsu, C.C., Sharif, A., Razzaq, A. and Sinha, A. (2021), “The role of information and communication technology in encountering environmental degradation: Proposing an SDG framework for the BRICS countries”, Technology in Society, Vol. 65, p. 101587.

Chudik, A. and Pesaran, M.H. (2015), “Common correlated effects estimation of heterogeneous dynamic panel data models with weakly exogenous regressors”, Journal of Econometrics, Vol. 188, pp. 393-420.

du Can, S.D.I.R. and Price, L. (2008), “Sectoral trends in global energy use and greenhouse gas emissions”, Energy Policy, Vol. 36, pp. 1386-1403.

Elavarasan, R.M., Pugazhendhi, R., Jamal, T., Dyduch, J., Arif, M.T., Kumar, N.M., Shafiullah, G.M., Chopra, S.S. and Nadarajah, M. (2021), “Envisioning the UN Sustainable Development Goals (SDGs) through the lens of energy sustainability (SDG 7) in the post-COVID-19 world”, Applied Energy, Vol. 292, p. 116665.

Evangelista, R. and Savona, M. (2002), “The impact of innovation on employment in services: Evidence from Italy”, International Review of Applied Economics, Vol. 16, pp. 309-318.

Gagliardi, L. (2019), “The impact of foreign technological innovation on domestic employment via the industry mix”, Research Policy, Vol. 48, pp. 1523-1533.

Gashenko, I. V., Khakhonova, N. N., Orobinskaya, I. V. and Zima, Y. S. (2020), “Competition between human and artificial intellectual capital in production and distribution in Industry 4.0”, Journal of Intellectual Capital, Vol. 21, pp. 531-547.

Gozgor, G. (2017), “The impact of globalization on the structural unemployment: an empirical reappraisal”, International Economic Journal, Vol. 31, pp. 471-489.

Greenan, N. and Guellec, D. (2000), “Technological innovation and employment reallocation”, Labour, Vol. 14, pp. 547-590.

Grover, P., Kar, A.K., Gupta, S. and Modgil, S. (2021), “Influence of political leaders on sustainable development goals–insights from twitter”, Journal of Enterprise Information Management. DOI: 10.1108/JEIM-07-2020-0304

Grossman, G. M. and Kruger, A. G. (1991), Environmental influences of a North American free trade agreement, Working paper. 3914, National Bureau of Economic Research.

Gupta, S., Bag, S., Jabbour, C.C. and Sarkis, J. (2021). “SI: Call for papers: Reimagining Post-Pandemic Enterprise Information Management and Achieving Sustainable Development Goals”, Journal of Enterprise Information Management, available at: https://www.emeraldgrouppublishing.com/journal/jeim/reimagining-post-pandemic-enterprise-information-management-and-achieving-sustainable (accessed 3 9 2021)

Gurbuz, I. B. and Ozkan, G. (2020a), “Transform or perish: Preparing the business for a post-pandemic future”, IEEE Engineering Management Review, DOI: 10.1109/EMR.2020.3014693

Gurbuz, I. B. and Ozkan, G. (2020b), “Transform or perish: Preparing the business for a post-pandemic future”, IEEE Engineering Management Review, DOI: 10.1109/EMR.2020.3014693

Gygli, S., Haelg, F., Potrafke, N. and Sturm, J.E. (2019), “The KOF globalization index–revisited”, The Review of International Organizations, Vol. 14, pp. 543-574.

Hörisch, J. (2021), “The relation of COVID-19 to the UN sustainable development goals: Implications for sustainability accounting, management and policy research”, Sustainability Accounting, Management and Policy Journal. DOI: https://doi.org/10.1108/SAMPJ-08-2020-0277

Jha, A. K., & Bose, I. (2015). Innovation styles, processes, and their drivers: an organizational perspective. In Technology, innovation, and enterprise transformation (pp. 143-163). IGI Global. DOI: 10.4018/978-1-4666-6473-9.ch007

Kovacs, O. (2018), “The dark corners of industry 4.0–Grounding economic governance 2.0”, Technology in Society, Vol. 55, pp. 140-145.

Levinson, A. and Taylor, M.S. (2008), “Unmasking the pollution haven effect”, International Economic Review, Vol. 49, pp. 223-254.

Lilien, D.M. (1982), “Sectoral shifts and cyclical unemployment”, Journal of Political Economy, Vol. 90, pp. 777-793.

Mbarek, M.B., Abdelkafi, I. and Feki, R. (2018), “Nonlinear causality between renewable energy, economic growth, and unemployment: evidence from Tunisia”, Journal of the Knowledge Economy, Vol. 9, pp. 694-702.

Mensah, C.N., Long, X., Boamah, K.B., Bediako, I.A., Dauda, L. and Salman, M. (2018), “The effect of innovation on CO 2 emissions of OCED countries from 1990 to 2014”, Environmental Science and Pollution Research, Vol. 25, pp. 29678-29698.

Modgil, S., Gupta, S. and Bhushan, B. (2020), “Building a living economy through modern information decision support systems and UN sustainable development goals”, Production Planning & Control, Vol. 31, pp. 967-987.

Modgil, S., Singh, R. K. and Hannibal, C. (2021), “Artificial intelligence for supply chain resilience: learning from COVID-19”, The International Journal of Logistics Management. DOI: https://doi.org/10.1108/IJLM-02-2021-0094

Mukarram, M. (2020), “Impact of COVID-19 on the UN sustainable development goals (SDGs)”, Strategic Analysis, Vol. 44, pp. 253-258.

Nundy, S., Ghosh, A., Mesloub, A., Albaqawy, G.A. and Alnaim, M.M. (2021), “Impact of COVID-19 pandemic on socio-economic, energy-environment and transport sector globally and sustainable development goal (SDG)”, Journal of Cleaner Production, Vol. 312, p. 127705.

Organisation for Economic Co-operation and Development (OECD), 2020, New Approaches to Economic Challenges (NAEC), available at: https://www.oecd.org/naec/New_Decade_New_Approaches.pdf (accessed 1 8 2021)

Pan, S.L. and Zhang, S. (2020), “From fighting COVID-19 pandemic to tackling sustainable development goals: An opportunity for responsible information systems research”, International Journal of Information Management, Vol. 55, p. 102196.

Pesaran, M.H. (2006), “Estimation and inference in large heterogeneous panels with a multifactor error structure”, Econometrica, Vol. 74, pp. 967-1012.

Pesaran, M.H. (2007), “A simple panel unit root test in the presence of cross‐section dependence”, Journal of Applied Econometrics, Vol. 22, pp. 265-312.

Phillips, P.C. and Sul, D. (2003), “Dynamic panel estimation and homogeneity testing under cross section dependence”, The Econometrics Journal, Vol. 6, pp. 217-259.

Serajuddin, U. and Hamadeh, N. (2020), New World Bank country classifications by income level: 2020-2021, World Bank, available at: https://blogs.worldbank.org/opendata/new-world-bank-country-classifications-income-level-2020-2021 (accessed 12 6 2021)

Shahbaz, M. and Sinha, A. (2019), “Environmental Kuznets curve for CO2 emissions: a literature survey”, Journal of Economic Studies, Vol. 46, pp. 106-168.

Sharif, A., Godil, D.I., Xu, B., Sinha, A., Khan, S.A.R. and Jermsittiparsert, K. (2020), “Revisiting the role of tourism and globalization in environmental degradation in China: Fresh insights from the quantile ARDL approach”, Journal of Cleaner Production, Vol. 272, p. 122906.

Sinha, A., Shahbaz, M. and Balsalobre, D. (2019), “Data selection and environmental Kuznets curve models-environmental Kuznets curve models, data choice, data sources, missing data, balanced and unbalanced panels”, In Environmental Kuznets Curve (EKC) (pp. 65-83). Academic Press.

Sinha, A., Sengupta, T. and Alvarado, R. (2020), “Interplay between technological innovation and environmental quality: formulating the SDG policies for next 11 economies”, Journal of Cleaner Production, Vol. 242, p. 118549.

Thornton, J. (2020), “COVID-19 pandemic has derailed progress on sustainable development goals, says WHO”, BMJ: British Medical Journal, Vol. 369.

Unalan, S. and Ozcan, S. (2020), “Democratising systems of innovations based on Blockchain platform technologies”, Journal of Enterprise Information Management, Vol. 33, pp. 1511-1536.

Van der Waal, J. W., Thijssens, T. and Maas, K. (2021), “The innovative contribution of multinational enterprises to the Sustainable Development Goals”, Journal of Cleaner Production, 285, 125319.

Vivarelli, M. (2015), Innovation and employment, World of Labor, Institute of Labor Economics (IZA).

Wang, Z., Huang, W. and Chen, Z. (2019), “The peak of CO2 emissions in China: a new approach using survival models”, Energy Economics, Vol. 81, pp. 1099-1108.

Westerlund, J. (2007), “Testing for error correction in panel data”, Oxford Bulletin of Economics and Statistics, Vol. 69, pp. 709-748.

World Bank (2021), World Development Indicators, available at: https://data.worldbank.org/indicator (accessed 15 6 2021)

Xie, Z., Qu, L., Lin, R. and Guo, Q. (2021), “Relationships between fluctuations of environmental regulation, technological innovation, and economic growth: a multinational perspective”, Journal of Enterprise Information Management. DOI: 10.1108/JEIM-02-2021-0104

Zhu, C., Qiu, Z. and Liu, F. (2021), “Does innovation stimulate employment? Evidence from China”, Economic Modelling, Vol. 94, pp. 1007-1017.