The twin transition —integrating green and digital transformations—has emerged as a strategic priority for achieving smart, sustainable, and inclusive economic growth. As the twin transition hinges on innovation at the green–digital interface, identifying the drivers of twin-technology (TT) development is critical for policymakers seeking to accelerate this progress. By identifying key factors influencing TT, policymakers can design targeted interventions to foster digital-enabled green innovation, leverage synergies between the two transitions, and advance environmental and climate objectives. Such insights also enable optimized resource allocation, prioritisation of investments, and the creation of a supportive business environment to scale TT.
This study analyses the determinants of TT development within the European Union (EU), employing a multi-layered innovation systems framework, which considers firm-specific, technological, sectoral, and regional dimensions. Drawing on a matched patent–applicant-level dataset, the analysis explores how geographical, sectoral, technological, and firm-level factors influence the extent to which the development of new green technologies draws on digital technological knowledge, thereby generating TT, operationalized as the likelihood that green patents cite digital prior art.
Our analysis reveals that firm-and regional-level characteristics have the highest explanatory power in explaining the propensity to develop green technologies that build on prior art digital knowledge.
At the firm level, foreign ownership facilitates TT by leveraging heterogeneous knowledge, regulatory and market environments, while a robust digital knowledge base enhances cross-domain recombination. Conversely, entrenched green expertise and cognitive lock-in hinder digital integration, suggesting path dependence in traditional green sectors may impede the development of TT. At the regional level, specialization in digital technologies fosters TT opportunities through local knowledge spillovers, whereas urbanization shows negative effects, reflecting the dual-edged nature of agglomeration economies. Patent-level findings further highlight the heterogeneous role of technological categories.
These results underscore the need for a multi-level approach to TT governance, emphasizing strategies to overcome knowledge silos, foster cross-domain collaboration, and balance urban and peripheral innovation ecosystems. The study offers actionable insights for policymakers aiming to accelerate the twin transition by harmonizing digital and green innovation pathways.
BELLO Michela;
CASTELLANI Davide;
DAMIOLI Giacomo;
MARIN Giovanni;
MONTRESOR Sandro;
RAVANOS Panagiotis;
2025-12-10
Publications Office of the European Union
JRC143151
978-92-68-31084-7 (online),
1831-9424 (online),
EUR 40421,
OP KJ-01-25-421-EN-N (online),
https://publications.jrc.ec.europa.eu/repository/handle/JRC143151,
10.2760/8255419 (online),
