Regional Economic Growth in Indonesia, Information and Communication Technology Perspectives

Abstract

This paper aims to investigate the contribution of information and communication technology (ICT) to local economic growth in Indonesia in the period 2008-2017, as it provided a critical backbone to the development of the data industry in Indonesia, especially mobile data. This study tested a cross-section instrument on 33 provinces in Indonesia. The simultaneous equation model is employed to analyze the effect of ICT on regional economic growth. This study assessed two policy settings, namely direct contribution to access and availability for economic growth, and the indirect impact on labor productivity. The results revealed an increase in the role of ICTs in encouraging regional economic growth in Indonesia, although most provincial areas have limited ICT infrastructure. This paper opens an extended solution to the improvement of ICT infrastructure and emphasizes a better in-depth analysis of ICTs on regional economic growth.