Quantifying the Impacts of Sustainability-Oriented Innovation through economic, labor and environmental impacts: A comparative analysis between the UAE & The UK

Abstract

This study provides rare cross-country empirical evidence showing that sustainability-oriented innovation delivers immediate economic and employment gains, while environmental benefits emerge more gradually and unevenly. By comparing firms in the UAE and the UK, the findings reveal how national context shapes the real-world performance of sustainability-driven innovation beyond adoption rhetoric.

Introduction:
Sustainability-oriented innovation (SOI) has become a central strategic mechanism through which firms seek to balance economic performance, labour outcomes, and environmental responsibility. Despite growing interest, empirical evidence comparing the multidimensional impacts of SOI across different national contexts remains limited.

Methods:
This study employed a quantitative, cross-sectional design to examine the economic, labour, and environmental impacts of SOI adoption in firms operating in the United Arab Emirates (UAE) and the United Kingdom (UK). Survey data were collected from 850 respondents across multiple industries. Statistical analyses were conducted using linear regression, correlation analysis, independent-sample t-tests, and equation-based synthesis to triangulate SOI impacts on GDP-related outcomes, employment change, and emission reduction.

Results:
The findings indicate that financial investment in SOIs significantly and positively contributes to economic performance, while improvements in technology efficiency are associated with short-term adjustment costs. SOI adoption demonstrates a net positive effect on employment, driven by productivity gains, although reskilling initiatives introduce temporary labour disruptions. Environmental analyses reveal statistically significant emission reductions associated with technology efficiency improvements and SOI-enabled products and processes; however, the magnitude of these reductions remains moderate. Correlation analysis shows no significant direct relationship between SOI adoption intensity and immediate technology efficiency gains, suggesting that efficiency improvements emerge over time. Comparative analysis further reveals that UK firms exhibit slightly higher SOI adoption levels than UAE firms, although the practical difference between countries is small.

Discussion:
Overall, the results demonstrate that SOI delivers meaningful economic and labour benefits across both national contexts, while environmental improvements materialise more gradually. These findings highlight the context-dependent and transitional nature of SOI outcomes and underscore the importance of sustained investment and policy alignment in translating innovation adoption into long-term sustainability performance.