A Model for Sustainable Development in Territorial Production Systems

ABSTRACT The territorial production system demand innovation and adaptability to provide the majority of decisions, especially when splitting up available resources among productive sectors by the lens of sustainable development. The system's economic units evolve in dimensional profile, technical execution, and management of productive process to approach the worldwide benchmark for sustainability, taking into account not only the environment, society, and economy, but also the twin transition to digitalisation. The study addresses the issue of allocation resources across territory's productive sectors by an inter‐sectorial model that accounts for both external and endogenous sustainability performance criteria. The model is developed starting from the Leontief input–output system and tested in the Italian production system. The sustainability perspective's individualization of the sector's top performer and the quantity of resources to be allocated in response to their respectable sustainable performance are provided as outputs. The political repercussions, model's potential and strengths, and its limits with regard to the sustainable development of territorial production frame are discussed in the conclusions.