DIGITAL ECONOMICS FOR SOCIAL SUSTAINABILITY: EVIDENCE FROM HUMAN DEVELOPMENT AND POVERTY IN INDONESIAN DISTRICTS
Abstract
This study analyzes the impact of the digital economy on human development and poverty in Indonesia using panel data from 514 districts/cities during the period 2022–2024. The Human Development Index (HDI) and poverty rate (P0) are used as dependent variables, while the Digital Society Index (DSI), which covers four pillars: infrastructure and ecosystem, digital skills, digital empowerment, and digital jobs, is used as the main independent variable. Regional economic growth is included as a control variable. Estimations were performed using a panel data regression approach, including the Common Effect Model (CEM), Fixed Effect Model (FEM), and Random Effect Model (REM), with Chow, Hausman, and Breusch-Pagan tests used to determine the best model. The results show that the digital economy contributes positively to HDI improvement and poverty reduction. The pillars of digital employment and digital skills have the most significant influence on poverty reduction, while digital infrastructure has a greater influence on HDI improvement. The robustness model with alternative poverty indicators (P1 and P2) reinforces the main findings. These findings emphasize the importance of digital transformation in supporting inclusive development and poverty alleviation. Policy implications are directed at increasing the productive capacity of the poor in the digital ecosystem, making digital transformation a genuine tool for promoting social justice and sustainable development.
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Avom, D., & Ngounou, B. A. (2025). Bright cities and intelligences: Can access to ICTs sustainably reduce energy poverty in Africa? Energy Policy, 202. https://doi.org/10.1016/j.enpol.2025.114568
Awad, A. (2023). Information and communication technologies role in alleviating poverty in Sub-Saharan Africa: Impacts and transmission channels. Sustainable Development, 31(2), 1149–1165. https://doi.org/10.1002/sd.2447
Bamiro, N. B., Oshoba, A. O., & Raimi, B. O. (2024). Driving Economic Prosperity: Digital Finance in Economically Disadvantaged Agricultural Regions. In Agripreneurship and the Dynamic Agribusiness Value Chain (pp. 153–165). https://doi.org/10.1007/978-981-97-7429-6_9
Birdsall, S. A., & Birdsall, W. F. (2005). Geography matters: Mapping human development and digital access. First Monday, 10(10). https://doi.org/10.5210/fm.v10i10.1281
Blaschke, C. M., Freddolino, P. P., & Mullen, E. E. (2009). Ageing and technology: A review of the research literature. British Journal of Social Work, 39(4), 641–656. https://doi.org/10.1093/bjsw/bcp025
Boakye, A. (2024). Estimating the impact of digital technologies on government operations, business operations and general welfare: The case of South Africa. African Journal of Science, Technology, Innovation and Development, 16(2), 274–282. https://doi.org/10.1080/20421338.2023.2296181
Chernysheva, Y. S., Gornostaeva, Z. V, & Mikhailov, A. B. (2023). The Use of Human Resources to Drive Business Transformation Through Digital Evolution. In Approaches to Global Sustainability, Markets, and Governance: Vol. Part F175 (pp. 279–284). https://doi.org/10.1007/978-981-19-4005-7_31
Dzator, J., Acheampong, A. O., Appiah-Otoo, I., & Dzator, M. (2023). Leveraging digital technology for development: Does ICT contribute to poverty reduction? Telecommunications Policy, 47(4). https://doi.org/10.1016/j.telpol.2023.102524
Gujarati, D. N. (2009). Basic Econometric.
Han, L., & Tian, Z. (2024). Digital Economy and Skills Wage Gap: An Empirical Study with CFPS Data. Modern Economic Science, 46(2), 75–89. https://doi.org/10.20069/j.cnki.DJKX.202402006
Iqbal, K., Hassan, S. T., & Peng, H. (2019). Analyzing the role of information and telecommunication technology in human development: panel data analysis. Environmental Science and Pollution Research, 26(15), 15153–15161. https://doi.org/10.1007/s11356-019-04918-4
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KOMDIGI. (2020b). Wujudkan Digital Nation, Kominfo Fasilitasi Ruang Digital dan Literasi. Komdigi.Go.Id. https://www.komdigi.go.id/berita/pengumuman/detail/wujudkan-digital-nation-kominfo-fasilitasi-ruang-digital-dan-literasi
Kurantin, N., & Osei-Hwedie, B. Z. (2019). Digital financial integration, investment, economic growth, development and poverty reduction. In The Gains and Pains of Financial Integration and Trade Liberalization: Lessons from Emerging Economies (pp. 101–112). https://doi.org/10.1108/978-1-78973-999-220191015
Li, J., Wu, M., & Zhi, Y. (2025). Digital Economy Development and Children’s Health Outcomes: Evidence and Mechanisms. Emerging Markets Finance and Trade. https://doi.org/10.1080/1540496X.2025.2480161
Li, Z., Hong, Y., & Zhang, Z. (2018). Empowerment or substitution? Entry of Platform-based Sharing Economy on the Local Labor Markets. International Conference on Information Systems 2018, ICIS 2018. https://www.scopus.com/inward/record.uri?eid=2-s2.0-85062510301&partnerID=40&md5=ac279d34d1cbae2ff5cebf84733a6740
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Ng, T.-H., Lim, Y.-Z., Lye, C.-T., Chan, K.-H., & Lim, Y.-S. (2025). Catalysing sustainable change: the role of digital finance in poverty alleviation in Asia. Quality and Quantity, 59(Suppl 2), 1305–1325. https://doi.org/10.1007/s11135-025-02067-0
Nugroho, W., Threestayanti, L., Febrian, E., Gintings, C., Widarningsih, A. W., Afandi, Yulianti, R., & Rosdalina, I. (2017). Gerakan Menuju 100 Smart City 2017: Risalah Penyusunan Master Plan Smart City di 24 Kota/kabupaten Peserta Gerakan Menuju 100 Smart City Tahap Pertama. Direktorat E-Government, Kementerian Komunikasi & Informatika Republik Indonesia berkerjasama dengan Majalah InfoKomputer Kompas Gramedia.
Oladipo, O., Murphy, A., Anannsingh-Jamieson, F., & Amaghionyeodiwe, L. (2016). Information and communication technology, and economic growth in Nigeria: A time series analysis. International Journal of Technology, Policy and Management, 16(2), 149–162. https://doi.org/10.1504/IJTPM.2016.076315
Pesaran, M. H. (2015). Time series and panel data econometrics. Oxford University Press.
Tian, Y., Hua, M., Li, W., & Nike, J. (2025). Energy poverty, digital economy, and financial deepening: A study of regional differences based on transportation geography. International Journal of Hydrogen Energy, 131, 287–297. https://doi.org/10.1016/j.ijhydene.2025.04.300
Urunov, R., Makhmudov, S., Mamadiyorov, Z., Khamdamov, S.-J., Kurbanov, Z. N., & Dadabaev, U. (2023). Digitalization and its Econometric Analysis on Transforming Sustainable Regional Development into Improved Population Living Standards. ACM International Conference Proceeding Series, 438–442. https://doi.org/10.1145/3644713.3644776
Wang, Y., Wang, Y., & Shahbaz, M. (2023). How does digital economy affect energy poverty? Analysis from the global perspective. Energy, 282. https://doi.org/10.1016/j.energy.2023.128692
Yin, Z., & Li, Y. (2023). The Impact of Mobile Payment on Relative Poverty. Modern Economic Science, 45(5), 128–140. https://doi.org/10.20069/j.cnki.DJKX.202305010
Yousefi, A. (2011). The impact of information and communication technology on economic growth: Evidence from developed and developing countries. Economics of Innovation and New Technology, 20(6), 581–596. https://doi.org/10.1080/10438599.2010.544470
Zainullin, S. B., Feng, P., Nwachukwu, R. C., Zhang, Y., & Zuo, S. (2024). Impact of the Development of Digital Economy on Economic Growth and International Cooperation. In Sustainable Civil Infrastructures: Vol. Part F3650 (pp. 195–203). https://doi.org/10.1007/978-3-031-70962-3_23
Zghidi, N., & Trabelsi, R. (2025). Impact of Digitalization on Sustainable Development: A Comparative Analysis of Developed and Developing Economies. Journal of Risk and Financial Management, 18(7). https://doi.org/10.3390/jrfm18070359
Zhang, K., & Bu, C. (2024). The power of digitalization: A study of the effect of the digital economy on household energy poverty. Energy, 313. https://doi.org/10.1016/j.energy.2024.133652
Published
2025-10-16
How to Cite
ROFIUDDIN, Mohammad.
DIGITAL ECONOMICS FOR SOCIAL SUSTAINABILITY: EVIDENCE FROM HUMAN DEVELOPMENT AND POVERTY IN INDONESIAN DISTRICTS.
Proceedings of the International Conference of Islamic Economics and Business (ICONIES), [S.l.], v. 11, n. 1, p. 1649-1658, oct. 2025.
ISSN 2541-3333.
Available at: <https://conferences.uin-malang.ac.id/index.php/iconies/article/view/3479>. Date accessed: 21 apr. 2026.
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Articles
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