Navigating Twin Transitions: A Policy Framework to Align Digital Innovation with Sustainability, Applied to the Dutch Processing Industry

Policymakers are increasingly prioritizing twin transitions of digitalization and sustainability. However, recent academic literature indicates these transitions are often misaligned. This study contributes by constructing a policy framework based on sustainability transitions theory and technological innovation systems. We specify short-and long-term policy goals, intervention logics, and associated instruments that enhance alignment and prevent misalignment in twin transitions within industrial contexts. We present a technological and a socio-institutional approach that culminate into four complementary policy intervention logics. The technological approach influences the application areas of digital technologies to either directly yield sustainability gains (logic 1) or direct these technologies towards overcoming persistent barriers to sustainable innovation (logic 2). The socio-institutional approach addresses common barriers to digital and sustainable innovation for effective policy prioritization (logic 3). It also uses the unique system dynamics of Digital Innovation Systems to mitigate risks and leverage opportunities related to sustainable innovation barriers (logic 4). This framework is applied in a qualitative analysis of energy-intensive processing industries in the Netherlands.