Digital Futures, Sustainable Outcomes: Mapping the Impact of Digital Transformation on <scp>EU SDG</scp> Progress

ABSTRACT This study explores how digital transformation, measured by the Global Digitalisation Index (GDI), relates to progress on the UN Sustainable Development Goals (SDGs) across EU member states. Using partial correlation, regression analysis with interaction terms and cluster analysis, the research examines the moderating effects of governance and culture. Initially, 12 significant links were identified between GDI and various SDGs, exhibiting positive associations with health, gender equality, innovation, urban sustainability, and strong institutions, but a recurring negative association with SDG 15 (Life on Land). When accounting for culture and governance, these correlations dropped to six and then to three. GDI remained positively associated with SDG 3 (Health) and SDG 9 (Industry, Innovation, and Infrastructure) and negatively associated with SDG 15. The regression analysis with interaction terms revealed that digital transformation enhances sustainable development performance, but its effectiveness depends on cultural context. Moreover, the cluster analysis revealed four country profiles. The findings support targeted policy development and contribute to Industry 5.0 discussions by highlighting how digitalization interacts with institutional and cultural contexts to influence sustainability outcomes.