Sustainability and competitiveness in evolutionary perspectives: Environmental innovations, structural change and economic dynamics in the EU

• The economic divergences within the EU are correlated to ‘environmental performance’ ones.
• Synergic economic–environmental performances emerge in some key EU sectors and countries.
• Standard sector specializations and new emerging sectors present joint economic–environmental performances.
• Environmental innovation is the key factor behind economic and environmental performances.
• Sector analyses shed light on what shadows and lights lie behind macro performances.

In this study we investigate the EU’s economic, environmental and innovation performances from a sector-based perspective. We correlate the various sectors’ performances, taking into account the role of changing specialization. In addition, we examine environmental sector performance related factors through a shift-share decomposition analysis.We show that wide divergences exist regarding environmental, economic and innovation performances among the EU countries. The leading role of Germany emerges, with strong underpinnings in its economic specialization, rooted in manufacturing. France excels in some services, while Italy suffers. Germany and Sweden present the most win-win economic–environmental sector performances.Our investigation illustrates how economic and environmental performances can potentially be effectively interrelated. Examples of integrated innovation–economic-environmental performances appear. Nevertheless, the sector view highlights that the foundations of macro performance rely on various elements related to structural change and innovation. Further research could investigate how composition effects and innovation changes correlate towards the achievement of sustainable economic development.