Abstract
In response to Indonesia's accelerating digital use, this study aims to address challenges to implement digital business models and identify the impact of digital economy to external and social and environmental sustainability. This study uses desk study, descriptive statistical analysis, and quantitative regression model and qualitative information from discussion with relevant stakeholders. This study provides several important results. First, increase in mobile cellular subscription will lead to increase in inequality, while percentage of internet user to population has shown otherwise. Second, the study also found that technology has a possibility to affect environment since it could increase CO2 emission. The digital technology gives the pressure to increase balance of payment deficit. The recommendations include increasing digital access and digital literacy, developing pro-environment technology, and increasing the exports of digitally deliverable services.
TopLiterature Review
Definition of Variables
The term “digital economy” has no broadly agreed definition, although the most widely accepted, if limited, idea is the Information and Communication Technologies (ICT) sector's percentage of GDP (OECD, 2014). Meanwhile, one group stated that the digital economy encompasses a wide range of economic activities, such as the use of digitized information and knowledge as a key factor of production, modern information networks as an important activity space, as well as effective ICT use as a key driver of productivity growth and economic structural optimization (G20 Research Group, 2016).
Currently, the digital economy is at a high rate of development, innovates rapidly and is widely applied to other economic fields, particularly during the Covid-19 period. The digital economy is becoming an increasingly vital driver of global economic growth and plays an essential role in every aspect of the economy. The digital economy has usually been credited with contributing to social-economic-environmental development nexus assessments. This section reviews the literature that has been well established and investigated the link between the digital economy and social-economic-environmental development.
Key Terms in this Chapter
External Sustainability: Sustainability of external macroeconomy position reflected by Balance of Payment and Current account condition. The balance is sustainable when the present value of its future trade surpluses equals the current level of debt.
Intellectual Property Rights: Legal rights that protect creators' original works, inventions, innovations, or the appearance of products and scientific advances.
Gini Coefficient: A measure of the distribution of income across a population to measure inequality. Higher Gini Coefficient means higher inequality.
Mobile Cellular Subscription: Subscriptions to a public mobile telephone service that provide access to the PSTN using cellular technology. The indicator includes (and is split into) the number of postpaid subscriptions, and the number of active prepaid accounts (i.e., that have been used during the last three months). The indicator applies to all mobile cellular subscriptions that offer voice communications. It excludes subscriptions via data cards or USB modems, subscriptions to public mobile data services, private trunked mobile radio, telepoint, radio paging and telemetry services.
Digitalization: Facilitating or improving processes through the use of digital technologies and data. Also defined as the use of digital technologies to change a business model and provide new revenue and value-producing opportunities.
Internet Users: Individuals who have used the Internet (from any location) in the last 3 months, as the percentage to population.
Sustainability: The integration of environmental health, social equity and economic vitality in order to create thriving, healthy, diverse and resilient communities for this generation and generations to come.