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Digitalization and Sustainable Entrepreneurship

The number of people who are enthusiastic about digital technology is growing. The necessity for eco-friendly business practices is becoming more pressing as more advanced digital technology becomes widely available. This is because digitalization’s impact on eco-friendly business practices might be positive and negative (Brenner, 2018). This essay examines the negative effects of digitization on environmentally responsible companies and how digitalization might foster environmentally responsible enterprises.

The Connection Between Sustainable Business and Digitalization

The term “digitization” refers to using digital technologies instead of more traditional archiving, recovering, and editing data. In light of recent technological advancements, digitalization has undergone a sea change over the last several decades, becoming standard practice in almost every industry (Agrawal et al., 2022). A sustainable business model aims to provide for present requirements without jeopardizing future generations’ abilities to do the same.

The widespread use of digital technology has profoundly affected the commercial landscape. Some of these changes have direct effects on the longevity of certain companies. Perhaps in the future, thanks to technological progress, we will be able to cut down on our use of scarce resources, cut down on our garbage output, and boost our total output. Incorporating digital technology increases a company’s potential to save time, money, and energy (Agrawal et al., 2022). One place where digitization may lessen the demand for paper is in the workplace. In the long run, switching to digital platforms might save companies money on printing and paper copies. This could reduce trash generation and material use (Acciarini et al., 2022). Finally, digitization has the potential to aid in waste reduction by assisting businesses in spotting and doing away with unnecessary activities. As a result of automating routine processes, businesses may have additional resources available to devote to strategic initiatives (Acciarini et al., 2022).

As more and more processes in a company are digitized, efficiency benefits are attainable. Companies might better understand their consumers’ behaviors and optimize their operations using cloud computing and big data (Del Giudice et al., 2022). Increasing customer happiness while cutting operating costs might lead to increased earnings. In addition, it might help companies discover areas of wasteful operation and reduce unnecessary resource use (Acciarini et al., 2022). Additionally, digitalization may help companies become more environmentally responsible by providing them with tools to reduce their impact on the planet. Businesses may reduce their environmental impact and increase sustainability by using renewable energy, replacing paper with digital alternatives, and automating repetitive procedures (Brenner, 2018).

Negative Implications of Digitalization on Sustainable Businesses

It is also crucial to consider how digitization may endanger a company’s long-term success. A company’s digitalization efforts may increase its ecological impact. The increased usage of computers and other electronic devices with the shift to digital forms significantly impacts energy consumption. Increasing carbon emissions, which are harmful to ecosystem health, might result from the increased demand for energy (Maffei et al., 2019). Due to the high energy requirements of certain digital technology advancements, this might lead to an increase in carbon emissions. The proliferation of waste products is an unavoidable side effect of developing new technology. There is a need for considerable packaging for digital items and services, most of which are disposed of in landfills or burned. In addition to being terrible for the environment, this rubbish may also contribute to the levels of pollution, which may create difficulties for companies that make an effort to be environmentally responsible (Maffei et al., 2019).

Businesses are just as vulnerable as individuals to digitization’s unintended consequences, which may significantly influence daily operations. Among other things, smaller businesses may need more resources for full-scale digital transformation. Upkeep and improvements for digital systems may be time-consuming and costly, especially for small businesses (Chen et al., 2020). This further complicates an already difficult position. These are only some of the obvious ways in which the spread of digital technology might expedite the collapse of an enterprise. For instance, the quality of connections between workers and consumers may deteriorate when digital technology replaces more traditional communication channels, such as face-to-face involvement, which may lead to a loss of trust in the staff. Digital technology adoption may reduce employee engagement since many digital systems value efficiency more than creating meaningful relationships. One way digitization might hurt a business is by slowing down the company’s ability to respond fast enough to changes in client tastes (Chen et al., 2020). The inability to quickly adapt corporate processes to changes in consumer expectations is a common challenge for many companies and one that the rigidity and inflexibility of specific digital technology may exacerbate. Companies working in highly competitive industries confront the most formidable odds.

Digitalization negatively affects sustainable business by increasing Competition. The advent of the digital revolution has directly led to an increase in the number of competitors operating in the market. This is because the advent of digitalization has made it easier for firms of any size to join the market and compete on an equal footing (Chen et al., 2020). The reason for this is that digitalization has made the market more competitive. Businesses of all sizes have been pressured to innovate and distinguish their products and services to keep their place in the market and continue to be competitive due to the higher degree of Competition that has arisen as a direct result of this. Sustainable companies are coming under fire because they need more resources and capabilities to keep up with constant innovation and differentiation, which are essential to maintaining a competitive edge in their respective industries. As a result, these businesses are being criticized (Chen et al., 2020).

The proliferation of digital technology has resulted in changes in consumer behavior, which is horrible news for businesses that are intent on maintaining their focus in the long term. Customers’ predisposition to cede more significant control of the purchase process to businesses by shifting their focus to online marketplaces, providing corporations more influence than they would otherwise have had. Environmentally responsible businesses are having difficulty competing on pricing in today’s market since it is easy for customers to compare the prices of different products (Chen et al., 2020). Because of the greater convenience that digitization has brought, consumers have higher expectations about the time it will take to execute their purchases. This is a direct outcome of the enhanced convenience that digitization has brought about. Consequently, sustainable businesses have been accused of falling short of these very high standards (Chen et al., 2020).

The widespread use of digital tools has increased the demand for support materials. This is because digital technology requires a significant amount of energy to function properly, in addition to other resources (Sacco et al., 2021). The increasing need for energy and materials caused by the widespread use of digital technology has stressed environmentally conscious firms, some of which may need more means to meet this demand. Another factor contributing to an increase in vulnerabilities is the transition from analog to digital formats. Cyberattacks on digital technology are increasing, with serious consequences for enterprises (Sacco et al., 2021). Attacks have been made against sustainability-focused organizations, which may be because they need more funds to upgrade to the latest security protocols.

As digital technology develops and becomes more accessible, customers’ tastes change from physical products to digital ones. Because of advancements in digital technology, consumers now have more options than ever (Bohnsack et al., 2022). Customers gravitate toward digital solutions since they often have a less ecological footprint than other options. Companies concerned about their environmental effect might take little solace from these findings. Reduced manufacture of eco-friendly goods directly results from efforts to save natural resources. Without handling the product personally, it is not easy to accurately understand its full environmental costs (Bohnsack et al., 2022). This contributes further to the product’s marginalization.

Companies’ chances of success are usually diminished due to their adoption and utilization of digital technologies. Increased pollution and a lag in developing environmentally friendly replacements directly result from our increased reliance on finite resources. As the world becomes more dependent on computers and the internet, the gap between those who have and those who do not widens. Companies with a strong commitment to doing right by their community and the environment would struggle due to the advent of the digital economy (Chen et al., 2020). This means firms must have a deep familiarity with the financial and environmental effects that digitalization may have.


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