The Missing Link in Albania’s Innovation System: Evidence on Academia–Business Cooperation and Sustainable Innovation

Sustainable innovation is important in Albania, a small transition economy facing pressures from digitalization, the green transition, and increased competition. Yet the country’s innovation system is still developing, and academia–business linkages remain weak. This article investigates how academia–business (A2B) collaboration contributes to firms’ sustainable innovation, addressing the lack of quantitative evidence from a country in the Western Balkans context. Building on innovation systems and resource-based perspectives, A2B cooperation is conceptualized as a multidimensional latent construct, capturing types of collaboration, key actors, and organizational drivers. Using survey data from 298 firms operating in Albania, collected in 2025, the study applies Covariance-Based Structural Equation Modeling (CB-SEM) to test whether the intensity and quality of A2B cooperation are linked to sustainable innovation outcomes. The findings indicate that collaboration is still limited and inconsistent, dominated by student internships and sporadic joint projects. However, the CB-SEM results confirm that more intensive and better-structured cooperation is strongly associated with higher levels of sustainable innovation. The study offers one of the first CB-SEM-based quantitative assessments of A2B collaboration and sustainable innovation in Albania and provides policy implications for strengthening innovation-oriented partnerships in transition economies.