Abstract

Adoption of digital technologies in agri-food SMEs is promoted widely as a pathway to environmental sustainability but empirical evidence on its actual impact remains disintegrated. This study investigated a sample of 197 agri-food SMEs from Italy to find out the adoption of digital technologies using quantitative data from iSTAT. This study found a critical disconnect where most firms are focused on upgrading the existing technologies instead of leveraging digitalization for transformative environmental benefits. Regulatory pressure found as strongest driver of innovation compared to market incentives, but sustainability efforts remain skewed towards short term gains with minimal investment in systemic solutions like circular design, or pollution control. The results challenge the assumption where it is assumed that the digital adoption inherently promotes environmental sustainability. Despite higher digital adoption in agrifood SMEs, we found no meaningful link between technology use and holistic environmental performance which reveals need of more strategic integration of digital tools with sustainability goals. It further shows “digital -green divide” where technological advancements failed to translate measurable ecological benefits without targeted interventions. Further this study highlights the importance of aligning digital subsidies with sustainability outcomes for policy makers and strengthening regulatory frameworks. Industrial leadership should give priority to training programs which can equip SMEs to harness the digital tools for environmental innovation. Future researchers can focus on regional disparities, role of firm level capabilities, and longitudinal impacts of digital adoption on sustainability transitions. This study bridges the gap between technology adoption and ecological outcomes and offers actionable insights for achieving the environmental goals of agri-food SMEs.

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