1 Introduction

In today's interconnected and rapidly evolving world, the role of public digitalization in shaping economic and environmental sustainability has gained increasing prominence. Assessing the impact of public sector digitalization on sustainability is crucial for understanding how technological innovation can contribute to achieving sustainable development goals [1, 2]. Public sector digitalization, the process of transforming public services and infrastructure into digital platforms, has emerged as a transformative force, offering the potential to enhance efficiency, improve governance, and promote economic and environmental sustainability [3]. Technological innovation, the creation and adoption of new and improved technologies, plays a crucial role in facilitating public sector digitalization [4, 5]. The development of innovative digital solutions, such as smart grids, data analytics platforms, and e-governance tools, is essential for optimizing public services, enhancing resource management, and reducing environmental impacts [6]. Sustainability, the ability to meet the needs of the present without compromising the ability of future generations to meet their own needs, is a critical global challenge [7]. Public sector digitalization and technological innovation hold immense potential to contribute to economic and environmental sustainability by promoting energy efficiency, reducing waste, and improving resource management [1]. The European Green Digital Coalition has been established to maximize the sustainability benefits of public digitalization, and the Joint Research Centre has published a report on how sustainable digital technologies could enable a carbon–neutral EU by 2050 [8, 9]. Governments are also exploring how to use digitalization to promote sustainable development performance, which has been found to have a positive impact on green innovation [10]. However, there are also challenges to digitalization in the public sector, and it is important to ensure that the benefits of digitalization are inclusive and do not leave any groups behind [11], as the application of public sector digitalization may facilitate an institutional approach to economic and environmental sustainability. Based on the above synergy, we expect a positive influence of public digitalization on economic and environmental sustainability, which is grounded in the empirical evidence and theoretical insights provided by the reviewed literature. Digitalization, as a transformative force, has been shown to enhance economic sustainability by fostering efficiency, innovation, and growth.

Research on the linkage between digital technologies and sustainable practices (across multiple actors, such as governments, firms, and people) has received a significant amount of scholarly attention. See, for instance, recent examples [12,13,14,15,16]​. Although these studies have increased our understanding of the association between digital technologies and more sustainable practices, they have several drawbacks that limit a comprehensive understanding of the relationship. While extant research has explored the influence of public digitalization on sustainability, predominantly within specific industries or geographic regions such as China, India, and South Africa, a palpable research gap persists [12, 13, 16]. For example, Balogun et al. [17] in a desk review investigated the potential of public sector digitalization to influence sustainable development (SD) in urban cities. Their findings revealed that digitalization improved the efficiency of SD. The gap identified in this study is the reliance on only urban cities; hence, the results cannot be generalized. By expanding the scope of this research, it will address rural–urban disparities, provide an understanding of diverse socioeconomic contexts, capture local perspectives, and advance economic and environmental sustainability goals [18]. The research also calls for econometric analysis, as the findings of the desk review are very general. Xu [19] in a review study found a significant association between digitalization and sustainability. However, they called for more investigation focused on empirical insights via data estimation. Researchers contend that public sector digitalization creates unique opportunities for organizations to strategically address sustainable development challenges for United Nations targets, ensuring higher productivity, education, and an equality-oriented society in the EU [20, 21]. They called for further research using updated data.

Another area where current research limits our understanding of the impact of public sector digitalization on sustainable development outcomes is their neglect of the mechanisms through which public sector digitalization work to impact sustainable development [2, 22]. We argue that public sector digitalization creates fertile ground for technological innovation by stimulating the demand for new digital solutions [23, 24]. As public services and infrastructure become increasingly digitalized, there is a growing need for innovative technologies to improve efficiency, enhance governance, and promote sustainable practices [3]. For example, the adoption of smart grids, which utilize digital technologies to optimize energy distribution and consumption, is a key example of how public-sector digitalization drives technological innovation [25]. Similarly, the development of e-governance platforms that enable citizens to interact with government agencies online has spurred innovation in data analytics and user interface design [26]. Previous research confirms that public sector digitalization resources, such as e-governance, cloud computing, and artificial intelligence, promote the technological innovation of institutions and firms [27, 28]. Brodny and Tutak [29] confirmed great diversity in public sector digitalization among EU-27 countries and a positive impact of spending on research and development on the process of public sector digitalization of institutions. The above studies are limited using private firms and the small sample size used for their analysis. Consequently, we suggest that the adoption of digital technologies by public-sector agencies positively impacts economic and environmentally sustainable practices by enhancing environmental performance through green procurement and digital transformation initiatives, fostering stakeholder collaboration, and enabling the integration of sustainability innovations in local government operations.

To date, extant literature has empirically explored the relationship between technological innovation and economic and environmental sustainability [13, 16, 30]. Technological innovation has been identified as an essential tool for reducing emissions, promoting energy conservation, and fostering eco-innovation [31], which contributes to the mitigation of environmental degradation [27, 32, 33]. The extant literature provides insights into the relationship between digitalization and sustainability, with a focus on economic and environmental dimensions. However, there appears to be a research gap in specifically assessing the impact of public digitalization on economic and environmental sustainability, with technological innovation serving as a mediating factor within the context of the EU. Several studies have analyzed the direct relationship between technological innovation (or innovation more broadly) and environmentally sustainable practices [33, 34]. However, this study considers its mediating role in the relationship between public digitalization and sustainable practice because we anticipate that it could transform how public digitalization translates into sustainable practices and benefits. Wang et al. [35] confirmed the influence of technological innovation on sustainability in 14 European union countries; however, they called for further research in extended parts of Europe. Conversely, Nosheen et al. [36] analyzed the impact of technological innovation on green growth in EU economies and confirmed a negative influence. Therefore, based on the research reviewed above, this study has noted that the findings are inconclusive, and several gaps remain in the relevant literature. Hence, this study attempts to bridge this gap by extending this research thread. To this end, we draw insights from Triple Bottom Line Theory (TBL) [37,38,39], which contends that in measuring the full cost of doing business, firms should focus on social and environmental concerns in addition to financial profitability. First, we develop a model that attempts to investigate the direct relationship between public digitalization and sustainability. Second, we examine the mediating role of technological innovation in the relationship between public digitalization and sustainability. Through the adoption of technological innovations, the potential of public digitalization can be effectively harnessed to contribute to achieving comprehensive sustainability goals.

This article, which is based on the TBL [37,38,39], aims at answering the following research questions: (i) does public sector digitalization influence sustainability? (ii) does public sector digitalization influence technological innovation? (iii) does technological Innovation in the public sector influence environmental and economic sustainability? (iv) does technological innovation mediate the relationship between public sector digitalization and economic and environmental sustainability?

Using a sample of 144 observations from 2018 to 2023, we build and test a model to address the research questions. The study’s results revealed that public sector digitalization positively influences economic and environmental sustainability. Again, the results show that public-sector digitalization has a positive and statistically significant association with technological innovation. The results further show that technological innovation has a positive and statistically significant correlation with sustainability. Finally, the results further demonstrated that technological innovation positively mediates the relationship between public sector digitalization and economic and environmental sustainability.

This study offers several contributions to theory and practice. First, from a theoretical perspective, we contribute to the triple bottom line theory which scholars have recommended extending to new contexts [38]. By delving into this uncharted territory, TBL theory emphasizes the need for organizations to focus not only on social prosperity but also on economic and environmental performance. This study identifies public sector digitalization and technological innovation as strategic resources, as our findings proved within the EU region [40]. Empirically, the impact of public sector digitalization on the economic and environmental dimensions of sustainability provides a new perspective on how public sector digitalization accelerates sustainability processes. Again, the mediating role of technological innovation is accounted for by estimating its interaction with public-sector digitalization, which provides a new dimension for revealing the “black box” of the theoretical relationship between public-sector digitalization and sustainability.

The remainder of this paper is organized as follows. The next section provides brief insight into the theoretical background and hypothesis development. Section 3 discusses the study’s methodology and data sources. Section 4 presents the empirical SEM results. Section 5 provides a detailed discussion. Section 6 presents our conclusions, theoretical and practical implications, and future research directions.

1.1 Theoretical literature and hypothesis development

1.1.1 Triple bottom line theory (TBL)

Our study is built on the Triple Bottom Line (TBL) theory. The TBL theory is based on the axiom of sustainable societies. Institutions should not focus on profitability, at the expense of sustainability. This theory values the social responsibility of public organizations. In essence, it captures the value of sustainability by assessing the effect of organizational activities on institutional performance as well as social, human, and environmental capital [41]. Previous studies from the perspective of TBL have mainly focused on corporate social responsibility and the behavior of employees in institutions [42], sustainable human resource management strategies and employment relations [43], and supply chain management within the TBL of sustainability [44]. In all of these studies, the common elements that run through are the human factor and sustainability linked to the TBL theory. In an era where public sector digitalization and technological innovation are prominent in the extant literature, it would be of great concern to ignore them and their impact on environmental, social, and economic sustainability. Public sector digitalization, technological innovation, and sustainability are interlinked. Institutions must be innovative to promote a higher level of environmental, social, and economic sustainability. The effective achievement of sustainable goals is prominent among institutions that pursue technological innovation coupled with digitalization. Therefore, both public and private institutions aggressively pursue digitalization and technological innovation activities towards sustainability. Consequently, TBL theory not only focuses on environmental, social, and economic care, but also requires the interplay of public digitalization and technological innovation for the effective achievement of sustainability. We focus on examining the effect of public-sector digitalization on sustainability and the extent to which technological innovation mediates this relationship. The crucial mechanism through which public sector digitalization affects sustainability is the missing link between public digitalization, technological innovation, and sustainability studies. It is very important for public institutions to pursue digitalization [45] and innovation [46] to remain effective in delivering their services. However, this should not be done by jeopardizing economic, environmental, or social sustainability. Our study contributes to TBL theory by acknowledging the mediating role played by technological innovation in the relationship between public sector digitalization and sustainability.

1.1.2 Going digital for sustainability

There is adequate evidence in the literature that public institutions promote economic and environmental sustainability when they go digital [47]. Achieving sustainability is a major goal for both public and private institutions as well as international and non-governmental organizations. This is evidenced by the amount of financial and nonfinancial investments made towards sustainability [47]. According to the 17 Sustainable Development Goals of the United Nations, sustainability is in the form of environmental, social, and economic aspects. “Digitalization is the use of digital technologies to change a business model and provide new revenue and value-producing opportunities” [48, pp 315]. The existing literature establishes that digitalization is a catalyst for achieving environmental and economic sustainability [49]. Environmental sustainability refers to human activities that interact with the environment to encourage the preservation of natural resources for long-term environmental quality. It concerns decision-making and formulating policies to improve and ensure a quality environment for safe human life. On the other hand, economic sustainability in the public sector involves improved productivity and the effective use of resources in service delivery. In Ref. [49] argued that going digital had a heterogeneous effect on environmental and economic sustainability. The first-order effect was negative in the environment. This is due to the production, usage, and disposal of IT hardware and infrastructure (network cables, servers, and system units). Improper waste management by digital or IT hardware can be harmful to the environment. The second-order effect of digitalization is positive for both the environment and economy. With digitalization in the public sector, there is resource efficiency owing to effective control and collaboration, speed and growth in productivity, and reduction in co2 emissions. Environmentally, digitalization reduces the rate of paper use with paper contracts, replacing electronic contracts, and promoting energy efficiency and carbon footprint [50], especially when public sector workers work from home. Economically, digitalization is argued to be significant in saving cost and enhancing revenue and efficiency, contributing to overall economic development. The social implications of digitalization include access to information, inclusiveness, and equity [42, 51]. The focus of prior literature [52, 53] has assessed the direct implications and relationships of digitalization and sustainability at institutions in Europe. However, existing studies have inconclusive arguments regarding the impact of public sector digitalization on environmental and economic sustainability. Hence, we expect digitalization to have a significantly positive influence on environmental and economic sustainability. Therefore, we hypothesize the following:

H1: Public sector digitalization has a direct positive significant influence on environmental and economic sustainability.

1.2 Nexus between public sector digitalization and technological innovation

To promote a simple, fast, and efficient public sector, technological innovation is needed to promote new products and processes. Technological innovation involves the introduction of a new product or process into an institution. The public sector is a major actor in service delivery in every economy. Public sector activities are usually beset with bottlenecks, bureaucracies, and inefficiencies. Most public institutions have leveraged digitalization and technological innovation to improve services rendered to citizens. The use of information and communication services, artificial intelligence tools, and cloud services has led to new methods of service delivery in the public sector. This has aided certain public services to be accessed 24/7 by the citizenry. The ability to introduce both product and process innovations in the public sector is aided by public digitalization. The nexus between public digitalization and innovation to achieve environmental and economic sustainability is complementary [54] and reciprocal [55]. Technological innovation is rendered ineffective without the influence of public digitalization. To achieve the optimal effect of innovation on environmental and economic sustainability in the public sector, technological innovation should be spurred by public digitalization. Innovation complements the effect of digitalization on sustainability by introducing novel ways of delivering services or products in public institutions. The connection between digitalization and innovation cannot be underestimated in current studies. Digitalization promotes new knowledge and innovation thrives on new knowledge. Abbas et al. [56] confirm that digitalization improves innovation quality and quantity. Digitized elements such as AI, ML, and fintech [55] spur new ways of doing things in public institutions. Serbia asserts that digital technology in public institutions promotes innovation performance [57]. Therefore, it is prudent to state that digitalization impacts sustainability through the mediating role of technological innovation. The digitalized public sector influences innovation activities such as R&D investment, knowledge flow, and technical staff, which promote environmental and economic sustainability. This study seeks to fill this gap in the literature, as we expect a significant positive influence between public sector digitalization and technological innovation. Therefore, we hypothesize the following:

H2: Public sector digitalization has direct positive influence on technological innovation.

1.3 The relationship between technological innovation and sustainability

Governments are increasingly functioning in challenging, fiscal, and rapidly evolving environments. These setbacks have pushed governments at all levels to seek better and new ways of operating to provide improved services to citizens. In one area, all governments are exploring and leveraging a sustained environment, and the economic system is a technological innovation. Technological innovation refers to the introduction of new or improved products or processes by an institution. It is viewed as a means of optimizing environmental and economic sustainability [58]. Institutions seeking opportunities to innovate have become efficient in achieving sustainability. Technological innovation has moved beyond value to include a more specific target setting. Thus, the European Commission uses an innovation scoreboard to group countries based on the achievement of specific innovation objectives. The increasingly harmful activities of mankind in the form of environmental degradation, pollution, and excessive depletion of natural resources call for new and modern ways to curb such activities and protect the environment for human survival. Technological innovation in the public sector has become a new method for the efficient and clean use of scarce and depleting natural resources. This provides new knowledge for resource utilization, reuse, and recycling. This promotes circular economy, social inclusion, equity, and access to information. One major means of promoting innovation in the public sector is through government expenditure on R&D. There is a need to prioritize the public budget on R&D expenditure to facilitate collaborative research on environmental and economic issues and develop the absorptive capacity of human resources in the public sector. Technological innovation is seen in public transport systems, such as electric buses, high-speed trains, smart traffic management systems, and the reduction of urban congestion. Another area in which innovation is prominent in the public sector is the building of smart cities. This includes smart lighting systems to reduce energy consumption, and environmental sensors to monitor air and water quality. However, this is one of the less explored areas in current studies, specifically the influence of technological innovation on heterogeneous sustainability (environmental and economic sustainability). To further assess the ontology of technological innovation and sustainability, we expect a significant positive relationship between technological innovation and environmental and economic sustainability. Hence, we propose the following hypotheses:

H3: Technological Innovation in the public sector has a direct positive influence on environmental and economic sustainability.

1.4 Gauging the mediating role of technological innovation on public sector digitalization and sustainability

Public sector digitalization impacts environmental and economic sustainability through technological innovation [53]. We measured environmental sustainability by using goods and services that promote environmental protection and effective resource use. The indicator of economic sustainability was GDP per capita. Public digitization is proxied by ICT training, digital skill usage, Internet use, and e-government services. Through innovative activities such as R&D collaboration and expenditures, there is an effective mechanism for the impact of public digitalization on sustainability dimensions. In the era of knowledge evolution, well-trained labor in digital skills requires current and new knowledge to be innovative in achieving environmental and economic sustainability. Investments in R&D collaboration are key to creating new knowledge and improving knowledge stock. To achieve optimal production of environmental goods and services, the government should invest more in R&D, training in ICT, and adoption of Internet use in the public sector, and e-government services might not have a need effect on environmental and economic sustainability. The introduction of new processes, products, or services in the public sector stems from huge investments in R&D. Automated systems are good mechanisms through which public digitalization influences environmental and economic sustainability. A highly digitalized public sector with well-trained IT personnel can effectively impact environmental and economic sustainability if there is an effective and efficient automation system (technological innovation). The use of AI tools, cloud services, and automated energy-management systems reduces the use of physical resources and operational costs, which are indicators of environmental and economic sustainability. Cheng et al. [59] argue that trained IT personnel and the use of ICT in the public sector can only have a good impact if the government invests in technologically innovative activities to provide systems and tools to work towards sustainability dimensions. Lack of software, automation systems, and modern innovative means of providing services and protecting the environment limits the ability of trained ICT personnel to operate. An improved process coupled with the efficient use of resources and automated services greatly affects GDP per capita and the production of environmentally friendly goods and services. We use R&D expenditure to measure technological innovation. Prior arguments include the value of technological innovation in liking the impact of public digitalization on sustainability dimensions. Omri [60] asserted that technological innovation is compatible with the pillars of sustainable development; however, it is one of the areas under study in the sustainability literature. In finding the missing link between the mediating role of technological innovation and the effect of public digitalization on economic and environmental sustainability, we hypothesized that:

H4: Technological innovation positively mediates the relationship between public sector digitalization and economic and environmental sustainability.

Based on the literature discussed above, this study outlines public sector digitalization as an independent variable, technological innovation as a mediating variable, and the economic and environmental dimensions of sustainability as the dependent variable and merged them to display the theoretical framework, as shown in (Fig. 1).

Fig. 1
figure 1

Source: The Authors. Note: Dashed lines represent the mediating effects and direction

Conceptual Model.

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2 Methodology

2.1 Design and data sources

This study explores the research problem and theoretical research gap by adopting an exploratory study based on a quantitative approach. The study outlined a theoretical framework for the flow of research and defined hypotheses to test the proposed association among constructs based on the research gap. Next, the characteristics of the dataset were assessed using a descriptive technique. Data were obtained using a secondary data-collection technique. The collected data were quantitative and curated into a panel dataset. The data represent EU-27 member states. Data is openly available and was extracted from European Union sources, such as the European statistics database (Eurostat, DESI) from 2018 to 2023 [61, 62], which had data for each European country’s public institutions. EUROSTAT is the statistical office of the European Union, and is responsible for providing high-quality statistical information. The data from EUROSTAT include a wide range of statistical themes, including economic, social, and environmental data. The datasets were multidimensional and contained various variables collected over different periods and regions. The Digital Economy and Society Index (DESI) is a composite index that summarizes relevant indicators on Europe’s digital performance and tracks the evolution of EU member states in digital competitiveness. It covers areas such as connectivity, digital skills, the use of the Internet by individuals, the integration of digital technology by businesses, and digital public services. Data interpolation was then performed and harmonized into a panel dataset to deal with the country level, missing values, and time differences that could arise in the cross-sectional data. The data comprise information on variables, such as public sector digitalization, technological innovation, and economic and environmental sustainability variables. Based on the number of countries analyzed, which is 27 EU Countries and six years, the total number of observations realized for the 6 years’ time span is 144. The data extracted excluded Croatia, Malta, and Bulgaria from the final analysis due to data availability problems. The rest of the countries include Austria, Belgium, the Republic of Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, and Sweden.

2.2 Variable description

This study examines the relationship between public digitalization, technological innovation, and economic and environmental sustainability, which necessitates a robust theoretical framework that integrates these concepts. The triple bottom line theory, as outlined by Rashidi et al. [41] and Farooq et al. [42], provides a foundation for understanding the innovative and sustainable roles that public digitalization plays across different public institutions. These models offer insights into the efficiency and effectiveness of public sector digitalization. The triple bottom line theory typically captures the value of sustainability by assessing the effect of organizational activities on the world, including profitability and shareholder values, as well as social, economic, and environmental capital [41]. To establish a clear theoretical framework, we explored how public sector digitalization influences the economic and environmental capacity of governments to manage resources and address targets set by the SDGs through technological innovation. The framework considers the principles of the triple bottom line theory, as well as how these principles affect the ability of public entities to respond to and pursue SDGs objectives. This relationship is further elucidated by examining how technological innovation impacts public institutions’ pursuit of digitalization, which, in turn, affects their ability to meet economic and environmental sustainability targets. Sustainability emphasizes the need to balance economic growth and environmental protection [45, 46]. Measuring SDGs with economic, and environmental sustainability most specifically GDP per capita and energy productivity provides a somewhat holistic assessment of a country's overall well-being and ability to meet the needs of the present without compromising the ability of future generations to meet their own needs [16, 41]. For instance, public institutions with greater R&D support in technological innovation may be better positioned to invest in sustainable practices that align with the SDGs. The use of public digitalization is justified as digital technology, and the Internet is a significant driver of economic and environmental progress considering the e-governance index, digital skills usage, Internet use, and institutions providing ICT training [16], as it has emerged as a key enabler of the SDGs. By leveraging digital tools, such as e-governance, digital skills, Internet usage, ICT training, government institutions, businesses, and individuals can collectively address challenges and promote positive outcomes across economic and environmental dimensions [63, 64]. Details of the variables measuring each concept are described in (Table 1) below.

Table 1 Variable Description
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2.3 Data analyses and scale validations

To test the various hypotheses, we employed the variance-based Structural Equation Model (SEM) approach for the data analyses implemented using the Smart Partial Least Square version 4.0.9.9 software. Variance-based SEM, often referred to as Partial Least Squares SEM (PLS-SEM), was particularly preferred for this study because it is well known to be suitable for exploratory research, able to handle complex models, and situations in which data distribution is non-normal. PLS-SEM focuses on maximizing the explained variance of dependent variables and predictive accuracy. This aligns with the research aim of understanding the impact of public sector digitalization on sustainability and the mediating role of technological innovation in the relationship. The PLS-SEM approach has been used in several related analyses (see, for instance, Karikari Appiah et al. [72]). PLS-SEM functions under several assumptions, one of which is its flexibility and less stringent requirements compared to covariance-based SEM (Hair et al. [73]). It also assumes that the relationships between latent variables and their indicators are linear, implying that they are based on linear equations [74]. PLS-SEM provides a flow chart that is useful for estimating the measurement or the external model. It comprises the assessment of internal or structural models, namely, the average variance extracted (AVE) validity test, coefficient of determination (R-square test), convergent validity test, composite reliability test, discriminant validity test (cross validity) test, and hypotheses testing. The proposed conceptual model depicts the association between the dependent and independent variables. Mediation occurs when a third mediating variable exists between two other related constructs. In other words, modifications in the exogenous construct trigger adjustments in the mediating variable, which then lead to adjustments in the endogenous construct. Thus, the nature of the interaction between two components (i.e., the underlying mechanism or process) is determined by the mediating factor. Analyzing the strength of the association between the mediating variable and other constructs might help clarify the causal mechanism between exogenous and endogenous constructs [72]. The PLS-SEM algorithm and bootstrap technique yielded the following findings in Smart-PLS: total indirect impact, specifically, direct, indirect, and total effects. These effects enable mediator analysis (e.g., as recommended in [75]), and these effects are available in the results summaries in Smart-PLS. It is worth mentioning that models with one or more mediators can result in either sequential or parallel mediation that can be evaluated using Smart-PLS software. Multiple mediation analyses were conducted in this study. The following three requirements form the basis of the mediating effect: (i) full mediation, which focuses only on indirect effects); (ii) partial mediation (comprising both direct and indirect effects); and (iii) no indirect effect (no intermediation). Although PLS-SEM is considered as a powerful and flexible method for analyzing complex models in exploratory research (Karikari Appiah et al. [72]), it has shortcomings that researchers must consider. PLS-SEM normally assumes linear relationships between constructs [74]. If the proposed relationships are nonlinear, they may not precisely capture the true nature of the interactions [76]. While PLS-SEM can work with smaller sample sizes, the reliability and validity of the results could be compromised when the sample size is very small, in contrast to the CB-SEM approach [77].

3 Results

We begin the discussion of the results with descriptive statistics and normality tests using kurtosis and skewness. Table 2 reports the results, showing that public sector digitalization has a composite mean score of 44.462, with an associated composite standard deviation of 10.460. The sustainability dimension construct had the highest composite mean of 14,203.105, with a corresponding composite standard deviation of 8500.209. The technological innovation construct had the lowest composite mean of 1.445 and composite standard deviation of 1.362. These results suggest that the values of the composite means, and standard deviations have an inverse relationship, signifying that the composite standard deviation score increases as composite mean scores decrease. We further examined the normality of data distribution using kurtosis and skewness. A set of data is said to be normally distributed if the kurtosis value falls between − 7 and 7 and the skewness value falls between − 2 and 2 [78]. The results in Table 2 demonstrate that all the variables fall within the acceptable normal distribution thresholds described above. Based on these results, it can be concluded that the research data are normally distributed.

Table 2 Descriptive statistics—composite means and standard deviation
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Table 3 provides the results of the scale validations with a specific focus on discriminant and convergent validity. To determine the extent to which discriminant validity criteria were fulfilled in the empirical model, this study used average variance extracted (AVE). As indicated in Table 3, the square root of the AVE values, as shown in the diagonal, was compared with the inter-construct correlation values, and the findings revealed that the square root of AVEs is much higher than the correlated values [79]. This suggests that there are no correlations between the constructs, indicating the fulfilment of discriminant validity criteria. On the other hand, AVE, Cronbach alpha (CA), and composite reliability (CR) have been used to evaluate convergent validity in the model. To pass the convergent validity test criteria, the CR, CA, and AVE scores must meet the following thresholds: 0.70, 0.70, and 0.50, respectively. As shown in Table 3, the findings demonstrate that AVE scores ranged from 0.733 to 0.837, which indicates that the model surpassed the minimum yardstick for the AVE test. Furthermore, the CA scores varied between 0.705 and 0.875, indicating that the model surpassed the minimal threshold of the test. Finally, the CR scores ranged from 0.867 to 0.911, indicating that the model surpassed the minimum prerequisite for the CR test. In agreement with the literature (see, for instance, [72]), there are several approaches to evaluating structural model. Specifically, these approaches include blindfolding, path coefficients, R-squared (coefficient of determination), effect size (f-squared), predictive relevance (Q-squared), and hypothesis testing [80]. The variance inflation factor (VIF) values for all items in the structural model ranged from 1.420 to 7.153, which is below the suggested minimum threshold of 10 [81]. This indicates that collinearity potential was evaluated for each item. Therefore, there were no concerns regarding the potential multicollinearity.

Table 3 Scale validation—Discriminant and Convergence Validity
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Table 4 and Fig. 2 present the results of the structural model assessment. We used R-squared and T-statistics to prove the model’s predictive power and to test the various hypotheses. The results show that public sector digitalization has a positive and statistically significant relationship (Beta = 0.331, T-value = 3.333, P-value < 0.001) with the dimensions of sustainability. This finding supports Hypothesis 1. Again, the results show that public-sector digitalization has a positive and statistically significant association (Beta = 0.788, T-value = 28.109, P-value < 0.001) with technological innovation. This result indicates that Hypothesis 2 is accepted. This result means that technological innovation mediates the relationship between public sector digitalization and the dimensions of sustainability, thus providing support for Hypothesis 4. The results further show that technological innovation has a positive and statistically significant correlation (beta = 0.183, T-value = 1.947, P-value < 0.05) with sustainability. This result supports hypothesis 3. These results demonstrate that technological innovation and public-sector digitalization positively influence countries’ transitions to sustainability. The results also demonstrate that public sector digitalization requires a mechanism through which it can effectively achieve SD outcomes. Finally, we find compelling evidence in the sample that public sector digitalization has an indirect total effect on sustainability dimensions (Beta = 0.144, T-value = 1.928, P-value < 0.05).

Table 4 Direct and indirect path effect
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Fig. 2
figure 2

Source: The Authors. Note: *** significant at 99% confidence interval, ** significant at 95% confidence interval

Measurement Model.

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Finally, we used the Q-square to assess the predictive ability or relevance of the model. It centres on the values of the model's endogenous variables. The Stone-Gaisser criterion can be used to evaluate the predictability of a structural model. According to the test, the endogenous variables' values should not, in general, be zero. Results or scores greater than zero indicate that the model has predictive relevance. As shown in Table 4, the redundancy score was estimated to determine the predictive adequacy of the model, and this estimate was cross-validated with the obscured PLS-SEM model. The results show that the cross-validated redundancy score for sustainable development (SD) is (0.238), which is greater than the 0 threshold, demonstrating that the model is sufficient for prediction. For the technological innovation model 2, the cross-validated test is (0.622), which is also greater than 0, implying that the path model has predictive relevance.

4 Discussion

Sustainability, as an economic model, seeks to decrease waste and maximize resource utilization by extending the lifespan of materials, goods, and resources. This study offers a quantitative analyses of how public sector digitalization and technological innovation impact countries’ transitions to sustainable practices. Specifically, we considered the direct relationship, as well as the mechanism through which public sector digitalization impacts sustainability. Research has revealed that public-sector digitalization has a positive and statistically significant association with sustainable economies. This result implies that increased public-sector digitalization can contribute to the promotion of sustainable development. This result can be explained by countries’ adoption of digital technologies for better monitoring, tracking, and optimization of resource use throughout the organization. This adoption could help firms and consumers make well-informed decisions about current resource consumption, leading to increased efficiency. This finding corroborates the conclusions of previous studies [82,83,84]. For instance, [82] concluded that the Internet of Things (IoT) and artificial intelligence (AI) play a crucial role in the transition towards a sustainable economy. Moreover, [83] revealed that digitalization can be a driving force for the successful accomplishment of sustainable business models. Therefore, this result means that increased public sector digitalization provides the necessary tools and infrastructure to successfully implement and scale sustainability practices. Digitalization adoption could enable the efficient use of resources, stimulate sustainable manufacturing and consumption forms, and enable the transition towards a more circular and sustainable economic model.

The results further demonstrate that public sector digitalization has a positive influence on technological innovation. This result implies that digitalization provides or enhances easy access to vast amounts of information and knowledge. This finding resonates with the conclusions of previous studies (e.g., [85, 86]). This key finding can be explained by the fact that public sector digitalization could facilitate the extensive adoption and diffusion of new technologies. This means that the public's ability to access digital tools is positively correlated with the rate at which society embraces new technologies. Digitalization adoption could also enable and sustain open innovation practices, where organizations can openly cooperate with important external partners [87], share ideas, and leverage external knowhow. Through this approach, firms and individuals may have access to new knowledge vital to the development of novel technologies and innovation. Therefore, it is not surprising that technological innovation mediates the relationship between public sector digitalization and sustainable economies, with a coefficient of determination of 62%. This mediating role means that technological advancements can enhance the development of tools, systems, and processes that can buttress and enhance the transition to sustainability practices. For instance, technological innovations such as Internet of Things (IoT) devices could enable better monitoring and tracking of resources throughout firms [55]. Real-time data from these devices allows for more efficient resource management, permitting businesses to identify opportunities for recycling, reuse, and waste reduction [88]. Digital platforms accelerate the implementation of circular business models [82] such as product-as-a-service and sharing platforms. These models are known to leverage digitalization to connect consumers and businesses in a manner that promotes sharing, leasing, or reusing products, instead of conventional ownership. Abbas et al. [56] confirmed that digitalization improves innovation in terms of quality and quantity.

5 Conclusion and implication

The main aim of this research was to develop a theoretical model to elucidate the extent to which public sector digitalization could be harnessed to enhance the transition to sustainability dimensions. While it is acknowledged that digitalization impacts sustainability principles, our understanding of the mechanisms through which it impacts this relationship is less explored. In this study, we examined the contingent effect of technological innovation and its impact on the relationship between public-sector digitalization and sustainability. The study revealed that public-sector digitalization has a positive and direct relationship with sustainability. The results further show that public-sector digitalization positively influences technological innovation. Technological innovation significantly mediates the relationship between public-sector digitalization and sustainability. The analysis further proved that the proposed conceptual model has predictive relevance, as the models passed the associated test. These results contribute to the bourgeoning literature on sustainability and how it could be achieved [49, 52, 84]. The current research expands these studies by incorporating the mechanisms through which public sector digitalization works to impact sustainability in selected European countries where there is a paucity of research has been conducted. The results affirm that technological innovation acts as a significant mediator by providing the means to implement and scale sustainable practices within the framework of public-sector digitalization.

The key findings of this study make remarkable novel contributions that expand the existing theories. The finding that public sector digitalization significantly influences sustainability directly aligns with Triple Bottom Line theory [42, 43, 89]. Public sector digitalization in the context of sustainability often involves the use of advanced technologies and data analytics. These technologies can enhance operational efficiency, reduce waste, and lower production costs for businesses, thereby contributing to economic sustainability. Second, this study makes some theoretical contributions to the understanding of the mechanism through which public sector digitalization impacts sustainability principles, which has not been significantly investigated by existing studies. This study examined the mechanisms that could deepen the understanding of the relationship between public sector digitalization and sustainability using technological innovation. We tested this mediating effect using SEM, which was proven to be consistent and highly reliable. In this study, we prove that technological innovation is an internal mechanism through which public sector digitalization can significantly impact sustainability practices.

Our findings have practical implications for sustainable practices. The study’s findings reaffirmed that contextual factors, such as technological innovation, are significant determinants towards the transition to sustainability. Technological innovation impacts how public sector digitalization can impact sustainability practices. Furthermore, our study extends beyond the impact of technological innovation in its relationship with new insights from the European Union context. These findings have implications for the need to improve public sector digitalization across the EU. This calls for policymakers to consider strengthening digital infrastructure, as digitalization could play an instrumental role in greater public participation in sustainable decision-making processes. From the perspective of sustainability, including the public through digital platforms can enhance governance by incorporating diverse perspectives and ensuring more informed policies. The finding that technological innovation mediates the relationship between public sector digitalization and sustainability has several practical implications. First, businesses and governments should prioritize continuous investments in technological innovation to develop and deploy solutions that facilitate sustainability practices [90, 91]. This may include increasing and sustaining funding for R&D in aspects such as sustainable technologies, smart manufacturing, and resource tracking. Second, to fully benefit from technological innovations, educational and training programs are needed. Employees or human capital development should focus on building the skills necessary for implementing and managing digital technologies that support sustainability practices. Finally, public awareness campaigns and digital platforms can be used to inform and engage the public in sustainability practices. By using technology to communicate the benefits of sustainable practices, businesses and governments can promote a sense of shared responsibility for sustainability.

As anticipated, there are certain limitations to this research, the most noticeable of which are as follows. First, this study focuses on the relationship between public sector digitalization and sustainability in the context of European countries. Future studies should be conducted in developing countries to replicate our findings. Second, while we found a statistically significant mediating influence of the impact of technological innovation, it is important to examine the impact of other conditions through which public sector digitalization impacts the transition to sustainable economies. For example, future research could consider the contingent effects of cultural and behavioural factors such as consumer behaviour, societal values, and attitudes towards sustainability, which can either facilitate or hinder the success of digital initiatives in promoting sustainability [92, 93], and the level of access to digital technology and infrastructure [94]. The results of this study should be interpreted with caution because the analyses were mainly correlational. The coefficients from correlational analyses indicate only the direction (positive or negative), significance, and strength of the relationship but do not provide information about the nature of the relationship. Future studies could consider using other research methods such as quantitative and qualitative techniques. Finally, cross-country comparative studies should be conducted in future.