Technological Innovation and Sustainable Development: Attracting Environmentally-friendly and Socially Responsible Investors

Purpose/Objective: This study aims to investigate the inferences of technological innovations introduced by companies, emphasised by firm investments in innovative products, the use of information technologies (ITs), and the number of innovative products in achieving economic and environmental sustainability. Design/Methodology/Approach: Simple regression models with Driscoll–Kraay standard errors processed through the Pooled OLS method, and cluster analysis performed through the Ward method inset on hierarchical clustering. A newly compiled dataset with information extracted from the European Innovation Scoreboard (EIS) 2023 was employed in the analysis, covering the time lapse from 2016 to 2023 and integrating 28 European countries. Findings: A statistically significant relationship between firm investments, technological innovations, and companies’ environmental and sustainability credentials. Clusters associated with the impact of innovative technologies on environmental and economic sustainability were identified. The results showed four different clusters, including countries that present similarities among the variables or distinctive tendencies from the countries belonging to other clusters. Significance/Implications/Conclusions: New insights for firms, managers, entrepreneurs, and local or foreign investors and emphasise the need for innovation and technological investments within companies to improve their business activities and support more effective and sustainable development. Limitations: The reduced availability of data and regarding the sample of representative indicators. Future Research: Future research avenues might explore the importance of collaboration among technologists, financiers, policymakers, and environmentalists to harness technology’s full potential and navigate the complexities of integrating it with sustainable practices.