A new study named “Business digitalisation as a driver of environmental and economic sustainability in micro, small, and medium-sized enterprises” written by our researcher Claudio Cruz, along with our PhD in Business alumnus Luis Francisco Miranda, Minna Saunila (LUT University) and Juhani Ukko (LUT University) sheds light on the complex relationship between digital transformation and sustainability in micro, small and medium-sized enterprises (MSMEs). Conducted in Finland—a digital frontrunner in the EU—the research reveals that digitalisation, while essential, does not directly lead to improved economic sustainability unless paired with strong environmental commitments.

The study explores how digital tools and processes influence both environmental and economic performance in small businesses. The authors find that the positive economic effects of digitalisation only materialise when companies actively pursue environmental sustainability. In other words, going digital without going green yields limited financial benefits.

Using data gathered from Finnish MSMEs, the researchers analysed the potential mediating role of environmental sustainability and the moderating effect of firm size. Their findings challenge conventional assumptions: while digitalisation has been widely associated with efficiency and growth, it is only through its environmental applications—such as reducing waste or adopting cleaner technologies—that businesses see real economic returns.

Moreover, the study shows that this relationship varies by firm size. Microenterprises, which represent the vast majority of businesses in Finland and across Europe, appear to benefit less from digitalisation in economic terms compared to their small and medium-sized counterparts. This disparity highlights structural challenges faced by the smallest firms, including resource limitations and a heavier reliance on individual entrepreneurs.

The authors argue that policies aimed at supporting MSMEs in the twin transition—green and digital—must consider these asymmetries. “Digital tools are not a silver bullet. For small businesses to thrive economically, digitalisation must go hand in hand with environmental responsibility,” they conclude.

The findings contribute to a growing body of literature examining the sustainability impacts of digital transformation in business. They also call for more empirical research focused on microenterprises, which despite making up around 90% of all businesses in OECD countries, remain underrepresented in digitalisation studies.

As Europe moves forward with its green and digital agendas, this study offers timely insights for policymakers, entrepreneurs, and sustainability advocates alike.

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