The More, the Merrier? Innovation‐Led Sustainable Development

Prior studies consider (technological) innovation as a driver of sustainable development due to amelioration in economic, social, and environmental efficiency. Yet, is it possible that innovation increases the likelihood of achieving all Sustainable Development Goals (SDGs)? This research motivates the postulation and valuation of the innovation‐led sustainable development (ILSD) hypothesis, using a global dataset spanning 143 countries from 2011 to 2023. Applying the Kernel‐based regularized least squares, a machine learning technique that captures possible nonlinearities and interactions among predictors, we estimate that a one‐point increase in innovation (GII) statistically leads to a 0.4863 point increase in sustainable development (SDG), confirming the ILSD hypothesis. Innovation significantly drives progress in reducing inequalities (SDG 10), eradicating poverty (SDG 1), and advancing resilient infrastructure alongside inclusive industrialization (SDG 9). Notably, innovation‐led sustainable outcomes are most pronounced in lower‐middle‐income countries. However, not all cases of ILSD are diagnosed; rather, the signs and magnitudes are contingent on specific SDGs, income level, and geographical scope. Innovation somehow hinders efforts toward SDG 12 (Responsible production and consumption), SDG 14 (Life below water), and SDG 17 (Partnerships for the goals). Certain adverse effects also appear to manifest in blocs such as OPEC and SAARC. These insights call for rigorous scrutiny by researchers and policymakers to better align innovation pathways with sustainable development objectives.