Integrating Digital Transformation and Innovation Capacity to Achieve Sustainable Development Goals in Saudi Arabia

This study examines how the strategic integration of digital transformation and national innovation capacity contributes to accelerating sustainable development in Saudi Arabia by focusing on six Sustainable Development Goals (SDGs): SDG 4—Quality Education, SDG 7—Affordable and Clean Energy, SDG 8—Decent Work and Economic Growth, SDG 9—Industry, Innovation and Infrastructure, SDG 12—Responsible Consumption and Production, and SDG 13—Climate Action. Using annual data on ICT use, ICT access, R&D expenditure, and patent applications, the analysis evaluates both the direct and joint relationships between these indicators and SDG performance. Digital transformation is captured through ICT use and ICT access, while national innovation capacity is represented by R&D expenditure and patent applications, reflecting the input and output dimensions of formal innovation activity. The findings indicate that the direct long-run effects of digital transformation and national innovation capacity on the six SDGs are not statistically significant, suggesting that these domains have not yet become standalone drivers of educational advancement, clean-energy adoption, economic performance, industrial upgrading, sustainable resource management, or emissions reduction. In contrast, their interaction produces substantial positive effects on SDG 4, SDG 7, SDG 8, and SDG 9, highlighting improvements in educational quality, renewable energy transition, productivity, and industrial innovation. The interaction also has significant negative effects on SDG 12 and SDG 13, as reflected by reductions in CO 2 intensity and environmental pressures. These results indicate that meaningful progress toward the SDGs emerges when digital capabilities and national innovation capacity evolve jointly, rather than through isolated improvements in ICT infrastructure or innovation inputs. Robustness checks using a composite SDG index confirm the stability of these complementary effects. These findings suggest that Saudi Arabia can accelerate progress toward the SDGs by adopting integrated policies that link ICT expansion with stronger R&D systems, patent commercialization, technological innovation, and sustainability-oriented industrial transformation across education, energy, industry, resource efficiency, and climate action.