Inclusive innovation and green growth in advanced economies

As the global economy faces the dual challenges of social inequality and environmental degradation, the concepts of inclusive innovation and green growth emerge as critical pathways for sustainable development. Inclusive innovation seeks to democratize access to technology and opportunities, while green growth promotes economic progress with reduced environmental impact. This study explores the relationship between inclusive innovation and green growth by examining how the Global Innovation Index (an indicator for inclusive innovation) affects the carbon intensity of GDP (a measure of green growth). Using an endogenous growth model across 35 Advanced Economies, we employ panel techniques for long-term, quantile, and causality analyses. Our findings reveal that inclusive innovation fosters green growth in the long term, effectively reduces emissions in countries with high innovation adoption, and exhibits robust bidirectional causality between the two. This underscores that inclusive innovation drives not only social equality but also environmental sustainability.