Digital Intelligence for Environmental Governance: How Analytics, IoT, and AI Foster Sustainability‐Oriented Innovation and Interconnectivity

ABSTRACT Emerging digital technologies are transforming how governments sense, interpret, and respond to environmental challenges. In this study, we develop and test a dynamic capability‐based model that explains how analytics insight capability, Internet of Things (IOT) intensity, and artificial intelligence (AI) assimilation, collectively termed emerging technological capabilities, enhance environmental governance through sustainability‐oriented innovation and digital interconnectivity. We utilize the dynamic capabilities view and the resource‐based view frameworks to conceptualize the technological capabilities that enable organizations to integrate knowledge, reconfigure resources, and deploy digital assets toward sustainable outcomes. Using survey data from public‐sector agencies, we use PLS‐SEM to test the sequential paths from digital capabilities to knowledge integration, innovation, interconnectivity, and governance effectiveness. The results demonstrate that well‐coordinated analytics, IoT, and AI capabilities stimulate sustainability‐oriented innovation and foster interagency data integration, leading to more transparent, adaptive, and evidence‐based environmental governance. This paper makes a theoretical contribution by bridging dynamic capabilities view and resource‐based view in the context of digital sustainability, demonstrating how the configuration of digital resources into higher order dynamic capabilities transforms technological potential into environmental governance value. From a managerial perspective, this study positions digital intelligence as an engine of sustainable public management.