The role of innovation and tourism in sustainability: why is environment-friendly tourism necessary for entrepreneurship?

Globally, the interaction among innovation, tourism, and climate change has become a point of focus recently. This study examines the impact of innovation and tourism development on the sustainable development of the G7 economies. Panel data from 2000 to 2019 was analyzed for cross-sectional dependency, and a series of panel unit root tests were used to confirm the variables' unit root properties. Pedroni and Kao's tests confirm the cointegration relationship among the variables. The fully modified OLS and dynamic OLS results show that higher economic prosperity and lower environmental pollution are associated with innovation as measured in scientific publications and patents, highlighting the importance of innovation. The results highlight the positive significant impact of tourism arrivals on pollution reduction and economic expansion, which mark the steps for sustainable development. The study finds further evidence that asylum refugees did not positively contribute to economic prosperity, nor were they active in the environmental correction plans of the countries. The level of education provides strong evidence supporting sustainable development by encouraging economic growth and discouraging environmental degradation. Overall, the results recommend raising the level of innovation, tourism development, and higher technical education for the sustainable development of the G7 economies. These findings offer important contributions to firms, policymakers, and UN sustainable development agendas.