The objective of this research was to provide a review of the state-of-the-art literature related to sustainability and digitalization in SMEs to identify current trends and future perspectives within this vital sector. The focus is on German SMEs, which are considered benchmarks, given these firms’ critical role in the country’s economy and job market. A total of 55 peer-reviewed articles were analyzed with the support of the Atlas TI 24.1 software package, focusing on definitions, frameworks, research questions, hypotheses, primary findings, and direct reports from interviewees. Major current trends were identified, clustered in two groups: (1) digitalization, digital transformation, Industry 4.0, and performance; and (2) sustainability, innovation, entrepreneurship, and risk management. Three future perspectives were identified: disseminating digitalization in the market; incorporating sustainability into business models; and increasing investments in government support programs. While the study is focused on German SMEs, its findings are applicable to similar economies within the European Union and can serve as a reference for developing countries’ sustainable development goals (SDGs). This research advances knowledge on how SMEs play a critical role in the context of sustainability and digitalization, both now and in the future.
The role of small and medium-sized enterprises in development: What can be learned from the German experience?
Small and medium-sized enterprises (SMEs) play an important role for development. Of importance are Schumpeterian SMEs, which include start-ups that trigger innovation, boost productivity and bring about structural change. Normal SMEs, which only adjust to market pressure, are also important for development and employment. Germany is a role model for SMEs. This is due to several important factors: Germany's local banking system, which is not profit oriented (made up of Sparkassen, or savings banks); the dual vocational system, with its combination of practical and theoretical education; the high social capital of strong employers' associations and trade unions; government support of SME clusters and a big, government-owned development bank (the KfW). SMEs in developing countries typically suffer from limited access to long-term and affordable finance, insufficient institutions for developing a skilled class of entrepreneurs and workers, a low income, and poor policies to support economic and social upgrading of SMEs. Economic upgrading in developing countries is necessary, but it will not be successful without social upgrading. Germany - with its high social capital within the framework of a social market economy, its financial and education system, and its government support for SMEs - can stimulate debates about SMEs in developing countries.
The relationship between organizational culture, sustainability, and digitalization in SMEs: A systematic review
Organizational culture, environmental sustainability, and digitalization have an impact on the business development of Small and Medium-Sized Enterprises (SME). Dimensions associated with organizational culture (e.g., attitudes, norms, assumptions) give a sense of identity and determine behavior. The latter include general approaches concerning the organizational impact on the natural environment (environmental sustainability) or the adoption of digital technologies (digitalization), which can cause profound transformations of the business model. These three concepts have been investigated separately and scarce attention has been paid to their relationship. To enable SMEs to successfully manage this complex relationship, our study cumulates existing knowledge, offering the first integrative view on organizational culture, level of environmental sustainability, and level of digitalization and their interactions. Through a systematic literature review protocol supplemented where possible by meta-analysis we selected 80 significant papers out of 811 peer-reviewed papers analyzed. We developed a network map to display the relations between the three concepts. Quantitative path analysis was used on three bidirectional main paths. For qualitative analysis we developed a novel extension to the Belief-Action-Outcome (BAO) framework, presented for the first time in the paper. Our findings reveal thirteen key dimensions and identify ten links between the key constructs. Strategic orientation, internal capabilities, management, and attitudes are the most investigated cultural dimensions. Furthermore, we integrated interchangeably used terms (e.g. Green IT and Green IS) introducing the novel concept of green digitalization tools. The meta-analysis revealed trends in applied research methods, geographical locations of research, top journals, and a growing interest in the relationship. Finally, we identify gaps in existing research and challenges for future research.
Evaluating Sustainable Digitalization: A Carbon-Aware Framework for Enhancing Eco-Friendly Business Process Reengineering
In an era where sustainability is paramount, understanding the environmental impact of digitalizing business processes is critical. Despite the growing emphasis on sustainable practices, there is a lack of comprehensive methodologies to evaluate how digitalization impacts environmental sustainability compared to traditional processes. This paper introduces a carbon-aware methodological framework specifically designed to assess the sustainability of business process reengineering through digitalization. The Digital Green framework quantitatively analyzes the environmental costs associated with digital transformation, ensuring that truly sustainable digitalization results in lower resource consumption relative to the complexity of the process being digitalized. To demonstrate its effectiveness, the framework was applied to a case study involving the reengineering of an administrative process at a small university in southern Italy. The case study highlighted the framework’s ability to quantify the environmental benefits or detriments of digital transformation, thus guiding organizations toward more sustainable digital practices. This research contributes to the field by offering a concrete tool for aligning digitalization efforts with ecological sustainability, and by paving the way for integration with initiatives such as the Green Software Foundation’s Software Carbon Intensity (SCI) specifications.
The Impact of Digital Business on Energy Efficiency in EU Countries
Digital business plays a crucial role in driving energy efficiency and sustainability by enabling innovative solutions such as smart grid technologies, data analytics for energy optimization, and remote monitoring and control systems. Through digitalization, businesses can streamline processes, minimize energy waste, and make informed decisions that lead to more efficient resource utilization and reduced environmental impact. This paper aims at analyzing the character of digital business� impact on energy efficiency to outline the relevant instruments to unleash EU countries� potential for attaining sustainable development. The study applies the panel-corrected standard errors technique to check the effect of digital business on energy efficiency for the EU countries in 2011�2020. The findings show that digital business has a significant negative effect on energy intensity, implying that increased digital business leads to decreased energy intensity. Additionally, digital business practices positively contribute to reducing CO2 emissions and promoting renewable energy, although the impact on final energy consumption varies across different indicators. The findings underscore the significance of integrating digital business practices to improve energy efficiency, lower energy intensity, and advance the adoption of renewable energy sources within the EU. Policymakers and businesses should prioritize the adoption of digital technologies and e-commerce strategies to facilitate sustainable energy transitions and accomplish environmental objectives.
Digital skills shortage is hampering German SMEs’ digital transformation | KfW
One third of SMEs cannot meet their digital skill requirements. The problem applies not just to basic digital skills, such as the use of standard software and digital devices, but also to advanced skills such as programming and statistical data analysis. Most SMEs attempt to build digital skills through further training. But short training measures with often limited skill-building effects predominate. More intensive training is hampered primarily by financial barriers. One third of SMEs describe the direct costs as a problem, while one quarter are challenged by employees’ absence from work. Digital learning formats enable more flexible learning, so they have the potential to stimulate further training in small and medium-sized enterprises.
Digitalisation in Europe – 2025 edition - Interactive publications - Eurostat
Digital technologies are transforming the world we live and work in. They touch many different aspects of our lives, from everyday tasks like making phone calls and shopping to how businesses and public services operate. Digital transformation is one of the key priorities for the EU. The digital decade initiative sets out the EU targets that will guide digital transformation until 2030.
Digitalisation in Europe – 2025 edition - Interactive publications - Eurostat
Digital technologies are transforming the world we live and work in. They touch many different aspects of our lives, from everyday tasks like making phone calls and shopping to how businesses and public services operate. Digital transformation is one of the key priorities for the EU. The digital decade initiative sets out the EU targets that will guide digital transformation until 2030.
(PDF) Strategic Technology Adoption for Sustainablity Performance in SME: A Comprehensive Review
PDF | This systematic literature review investigates the strategic adoption of technology for sustainability and resilience in small and medium-sized... | Find, read and cite all the research you need on ResearchGate
Role of digitalization in environment, social and governance, and sustainability: Review-based study for implications
Digitalization gives people access to a vast network of untapped data, which has the potential to help society and the environment. Smart systems connected to the internet can systematically provide a unique opportunity to solve difficulties related to long-term sustainability. The goals are to create an egalitarian, ecologically sustainable, and healthy society. Technological resources are envisioned as game-changing instruments. Three key concerns integration benefits are highlighted here: (i) sustainable development goals, (ii) socio-economic development, and (iii) the role of digital technology in environmental sustainability. This viewpoint describes the potential that digitization can create a future sustainable society. The technological network would unite the urban and rural worlds under a shared banner of sustainable development, keeping all social elements in the loop. Nations that take a comprehensive strategy will be able to provide equitable growth and an efficient, sustainable, and digital existence for their citizens. As a result, digitization provides better living conditions, active public involvement, clean governance, and transparency in public welfare programs and processes. People who are well-informed, self-aware, and digitally equipped will be better learners, thinkers, reformers, participators, and change and growth agents, marching forward on sustainable progress. The advantages of digitization in hastening the transition to sustainable industrial processes and improving people's health and happiness are explored. Finally, the perspective encapsulates the advantages of digitization by offering a holistic vision of how technology could aid in addressing major challenges such as endangered world biodiversity and climate change.
Shaping Europe’s digital future
The Digital Strategy website provides updates and resources on EU policies key to the digital transformation.
EU Open Source Strategy | Shaping Europe’s digital future
The EU Open Source Strategy is a cornerstone of the Tech Sovereignty package, supporting open source ecosystems across the EU - encouraging the development and uptake of European alternatives.
Digital Degrowth: Radically Rethinking our Digital Futures
We are fast approaching the point of “peak digital”, with the continued mass production and excessive consumption of digital technologies set to become a key driver of climate crisis, ecological breakdown and ongoing societal instability.<br /> <br /><i>Digital Degrowth</i> is a call to completely rethink our digital futures in these fast-changing times. It explores how degrowth thinking and alternate forms of “radically sustainable computing” might support ambitions of sustainable, scaled-down and equitable ways of living with digital technologies. Neil Selwyn proposes a rebalancing of digital technology use: digital degrowth is not a call for simply making reduced use of the digital technologies that we already have – rather it is an argument to reimagine digital practices that maximise societal benefits with minimal environmental and social impact. Drawing on illustrative examples from across computer science, hacker and environmental activist communities, this book examines how core degrowth principles of conviviality, autonomy and care are already being used to reimagine alternate forms of digital technology.<br /> <br />Original and stimulating, this is essential reading for students and scholars of media and communication, sustainability studies, political ecology, computer/data sciences, and across the social sciences.
Digitalization and Signatures: Evidence from a Survey among German Citizens
We assess the knowledge of two legal norms central to the digital transformation of the German population in representative population survey: the revised requi
EU-AI | Igor L.
The geopolitical landscape is shifting from physical borders to digital infrastructure. Here is a factual breakdown of how a $500 billion investment in "Sovereign AI" is changing global power dynamics. The Shift: From Land to "Substrate" Historically, a nation’s power was defined by its territory and legal systems (the Westphalian model). Today, power is increasingly tied to the compute substrate—the physical hardware and energy required to run AI. 1. Infrastructural Enclosure The "Sovereign Compute Coalition" (SCC) represents a massive consolidation of power. Major private entities are acquiring the three pillars of modern national strength: * Hardware: High-end AI chips (e.g., Nvidia). * Energy: The massive power grids needed to fuel them. * Data Centers: The physical "brains" of the digital economy. 2. The Rise of Technocracy As private companies own these essential tools, governments may find themselves in a position where they effectively "rent" their ability to govern. This moves decision-making power away from elected officials and toward those who control AI infrastructure. 3. Europe’s Strategic Response Europe is launching several initiatives to avoid becoming a "client state" of foreign tech providers. The strategy focuses on four main channels: * 8ra Initiative: Building a decentralized, multi-provider cloud-edge architecture to ensure data remains under European control and interoperable across borders. * ReArm Europe: A strategic defense package (presented in March 2025) aimed at boosting industrial competitiveness and reducing strategic dependencies in technology and defense. * Sovereign LLMs: Developing domestic models, such as Mistral, that are designed to align with European data privacy standards and cultural values. * Energy & Procurement: Using public procurement and new regulatory frameworks to create demand for homegrown, sustainable energy-efficient compute solutions. The goal of these moves is #DigitalSovereignty : the ability for a region to control its own digital destiny without relying exclusively on transnational monopolies. Data tells the real story. Are you following it? Follow #datanomics
The Matrix of Convivial Technology – Assessing technologies for degrowth
This article introduces the notion of convivial technology as a conceptual framework for technologies suitable for degrowth societies. This paper is inspired by Ivan Illich's notion of convivial tools but reconsiders it in the light of current practices and discussions. Looking for a definition of convivial technologies it uses qualitative empirical research conducted with degrowth-oriented groups developing or adapting grassroots technologies like Open Source cargo bikes or composting toilets in Germany. The basic ethical values and design criteria that guide these different groups in relation to technology are summed up into five dimensions: relatedness, adaptability, accessibility, bio-interaction and appropriateness. These dimensions can be correlated with the four life-cycle levels material, production, use and infrastructure to form the Matrix for Convivial Technology (MCT). The MCT is a 20-field schema that can be filled in. Experiences with the tool in different fields are presented. The MCT is itself a convivial tool as it allows for degrowth-oriented groups to self-assess their work and products in a qualitative, context-sensitive and independent way. It is a normative schema that fosters discussion concerning degrowth technologies in contexts of political education. And it is a research method as it helps collecting data about underlying ethical assumptions and aspirations of individuals and groups engaged in developing technology.
A brief 🧵 for all outside the #atproto bubble on why, from a digital industrial policy perspective, this step is deeply bewildering. There's @eurosky.social – open source, non-profit, fully aligned with the EU's open source strategy. It provides all that W has, & more. And yet, the Commission...
European Commission
We have now joined W, a new European social media network. We’re present on 15+ platforms, and are especially happy to join one based in Europe and with the ambition to foster open and safer online conversations. Keep the conversation going - whether from W, Bluesky or other compatible apps.
