Countries face a double challenge of unprecedented scale consisting in drastically reducing
carbon emissions in the time of a generation, while recovering the economy from the worst
pandemic crisis in a century. Innovation is key in the response to this double challenge.
Innovation policies are increasingly directed at achieving both goals, as governments seek
opportunities for transforming the economic structure along with decarbonization. We raise
the question of the effect of the direction in the success of the policies for the sustainability
transition to achieve the economic transformation.
We start by analyzing the processes of change in the economic structure. We identify three
possible strategies of transformation: decarbonization, dematerialization and digitalization.
Then we compare the evolution of the economic complexity of Portugal, which aspires to
transform its economy, with that of three countries that are respectively reference in each one
of the three strategies: Denmark, The Netherlands, and Ireland. Successful strategies evidence
specialization in products that involve extensive and sophisticated knowledge, produced with
high connectivity to other activities and with low carbon footprint.
Based on these results and informed by the theory, we propose a set of conditions—related to
the promotion of connectivity to growing sectors, high social return technologies and variety—
that need to be aligned in the direction of the policies in order to increase their potential for
transformative change.info:eu-repo/semantics/publishedVersio
