Fraunhofer Institute for Systems and Innovation Research ISI
Fraunhofer Institute for Systems and Innovation Research ISI

Project

Digi & Green Economy

Interactions between the process of digitalization and the transition to a green economy

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Background

Green economy is the model for an environmentally compatible economy, which has positive links between ecology and the economy, and increases social welfare. Green economy means that the economy develops within ecological guard rails based on underlying environmental goals. Despite the debate surrounding the guiding principle of sustainable development that has been going on for more than two decades, its principles are still far from becoming widely established in the economy and society. Transformation towards a green economy goes beyond technical eco-innovations and implies a transformation in the structure of institutions and mechanisms at multiple levels (corporate, sectoral, among consumers), and is characterized by path dependencies, feedback loops, and breaks.

At the same time, the increasing availability of digital data, networking, automation and new user interfaces are transforming business models and restructuring entire industries. Digitalization is fundamentally changing the way we do business, live and work, and is progressively penetrating every area of the economy and life. It has already progressed so far that things are now being realized that were once only visions, such as artificial intelligence (AI), the internet of things (IoT) or digital platforms.

This blurring of the fields and applications of ICT is taking place with unusually high innovation dynamics and diffusing rapidly so that digitalization can be seen as the main motor driving technology and social change in the modern age. Many future manifestations of digitalization with regard to the green economy and sustainability are still unclear at present, although they can be shaped in principle.

In view of the increasing blurring of digitalization, there is a need for environmental and climate policy to observe the major digital trends, understand their combined effects and employ a suitable practical approach to classifying the developments in policy arenas. The actors involved are only just starting to consider the outlined developments of digitalization and the green economy not as separate events but rather to focus on their joint analysis. This is precisely what this project aims to do based on selected examples.