Digital Innovation for Sustainable Urban Infrastructure in Emerging Economies: A Systematic Literature Review of Economic-Environmental Outcomes, Governance Mechanisms, and Implementation Barriers

Abstract

Rapidly advancing urbanisation and continuing infrastructure issues require that emerging economies improve essential services while avoiding carbon-intensive development, financial burdens and technological lock-in. This systematic literature review examines the role of digital innovation supports the economic and environmental sustainability of urban infrastructure, while also investigates the governance frameworks and implementation barriers that influence these outcomes. Following PRISMA 2020, the review synthesises 212 publications from 2021 to 2026 through descriptive evidence mapping and thematic synthesis. Artificial intelligence and machine learning were identified in 84 studies (39.6%), followed by Internet of Things and sensor systems in 64 (30.2%) and big-data analytics in 57 (26.9%). Energy and electricity systems constituted the leading infrastructure domain (69 studies; 32.5%), followed by transport and logistics (58; 27.4%). The principal value-creation mechanisms were automation and process integration (108; 50.9%), innovation and capability development (99; 46.7%), optimisation and resource allocation (75; 35.4%), and real-time monitoring (67; 31.6%). Ninety-nine studies (46.7%) considered economic and environmental outcomes jointly, while 65 (30.7%) explicitly examined emerging-economy contexts. However, implementation was constrained by scalability and context-transfer limitations (136; 64.2%), inadequate data and performance metrics (108; 50.9%), governance and regulatory deficiencies (103; 48.6%), limited organisational readiness (62; 29.2%), and cybersecurity, privacy and trust concerns (53; 25.0%). The synthesis develops a Digital Innovation–Infrastructure–Sustainability framework in which digital capabilities affect sustainability through monitoring, prediction, optimisation, automation and institutionalised decision-making. The review concludes that digitalisation is not intrinsically sustainable: durable economic–environmental value depends on interoperable standards, accountable data governance, institutional capacity, lifecycle cost and carbon measurement, inclusive service design, and locally appropriate financing.