Implementing digital and sustainable transformations is a priority on the EU political agenda. Two major global crises have triggered significant transformational forces: the pandemic has accelerated digital transformation across all levels of society, while the escalating issue of climate change has intensified discussions around sustainability transformation. Successful implementation of these transformations is crucial for achieving the United Nations' Sustainable Development Goals (SDGs). The 2022 EU Strategic Foresight Report emphasizes the need to examine the linkage between digital and sustainable (TWIN) transformations in more detail, highlighting their mutual reinforcement.
The Green Deal’s success hinges on the European Commission’s comprehensive strategy to achieve climate neutrality by 2050. Digital transformation, historically pursued with little focus on sustainability, is now critical. According to the 2022/2023 European SME Annual Report, many EU countries lack schemes to help SMEs adapt to sustainable requirements. There are legitimate questions about integrating digital and sustainable transformations, particularly for SMEs in rural areas, which face various obstacles that hinder innovation adoption.
SMEs, which constitute over 90% of all businesses in Lithuania, play a crucial role in the economy. To accelerate their digitization and connect it to sustainable solutions, it is essential to examine the impact of TWIN transformations on competitive business model changes. This research aims to contribute to smoother and faster digitization and SDG achievement in EU countries.
Recent studies emphasize the importance of digital technologies in addressing sustainability challenges. However, research on redefining organizational value propositions and empirically assessing TWIN transition impacts on business models is scarce. The conceptual butterfly model of dual transformation illustrates how organizations can integrate digital and sustainable transformations to enhance dynamic capabilities, yet it does not fully address changes in SMEs' business models.
This research will empirically assess and evaluate the influence of TWIN transition (synergy) on competitive business model changes in rural SMEs, contributing to the sustainable development of the EU. The findings will offer practical and social insights to promote TWIN transformations in SMEs, addressing digitization and sustainability challenges while enhancing long-term competitiveness. These results will also aid policymakers in assessing EU SMEs' readiness for TWIN transformations and encourage faster implementation of these processes. The research is expected to expand scientific knowledge about TWIN transformations in rural SMEs, providing a basis for future studies and advancing management knowledge.
The research is funded by the Research Council of Lithuania (Grant No. S-PD-24-184).