The analysis of interconnections between the three dimensions of Sustainable Development in terms of the economy structure transformations

The paper aims to show the analysis of dependencies between the three pillars of Sustainable Development (SD) across the European Union in terms of economy transformation. The provision of simultaneous development in environmental, social and economic dimensions is the crucial task for economies nowadays. Particularly, the highly pointed out negative relation between ecological and environmental development should be neutralised. The study is based on data characterising the European Union countries from 2015 to 2022. Firstly, the level of sustainability achievement in each individual dimension is assessed. For environmental and social sustainability the composite indicator measures are defined and calculated. Economic sustainability is assessed with the Gross Domestic Product per capita level. To detect the occurring connections between SD pillars, the spatial Vector Autoregressive (spVAR) model is estimated and verified. The spatial dependence is included in the system due to the occurrence of spatial autocorrelation in sustainability achievement across the EU. Moreover, to investigate potential effects of the economy modifications in the sustainability achievement, the variables characterising the servitisation and industrialisation levels are additionally employed. The main results show that there is still a negative link between environmental and economic development. Moreover, the supporting role of the progressing servitisation process in sustainability achievement in the environmental and economic dimensions is concluded.