Abstract

This paper studies the sustainability performances of a market-based socio-economic system, with particular emphasis on technological change and innovation at sectorial level. In particular, a strong accent is posed on innovative activities, their determinant and the role of environmental regulation. The focus is on cross country differences in manufacture and service sector performances. The contribution links important and complementary topics: The relationship between sustainability and innovative dynamics, and the role of firms in environmental innovation, analyzed through a sectorial level analysis also able to address the specific role of public utilities. In particular, this work is trying to depict the main characteristics of the European context, in order to have a better understanding of past, present and future perspectives of the Italian innovative system, through an analysis of its sectorial specialization and of the specific role of public utilities. Firms are here considered as economic agents that produce a private-public «shared value», answering to both internal factors (firm social responsibility) and external factors (exogenous environmental policies). Regarding the external factors in particular, we will study if environmental innovation can be able to create a synergy between environmental and economic benefits. Sustainability has been, as a consequence, studied more on a global scale, than a local one. All types of firms, and in particular public utilities, are in fact potential producers of mixed public goods, which generate both private (increasing competitiveness due to investment in R&D and innovation) and public (green innovation and its positive effect on emissions) benefits. The presence of mixed public goods calls for an in depth analysis of the famous Porter Hypothesis, i.e. the idea that «good» environmental policies might have positive long term benefit on firm competitiveness, through the stimulus that they bring on environmental innovation.