How the Effect of Investment Policy at Information and Communication Technology for Digital Economy Implementation Toward Macroeconomic Indicators and Sectoral Performance, in Indonesia?

14 Pages Posted: 9 Apr 2020

See all articles by Widi Amanasto

Widi Amanasto

Universitas Trisakti - Economics and Business Faculty

Muhammad Zilal Hamzah

Sekolah Tinggi Ilmu Ekonomi Bisnis Indonesia; Centre for Financial Inclusion

Bambang Sudaryono

Indonesian Business School

Date Written: September 30, 2019

Abstract

The purpose of this study is to analyze the effect of investment policy of Information and Communication Technology (ICT) on digital economy toward macroeconomic indicators and sectoral performance, during the period of 2014-2017, in Indonesia. The data used in this study is secondary database from Input Output (I-O) table and SNSE from Statistical Central Bureau and also from Information and Communication Technology Ministry. Aanalytical method used is a Computable General Equilibrium/CGE model. In this study, the relation between the availability of ICT infrastructure and macro and micro economic has been demonstrated in the simulation.

The results of the simulation consist of macro economics indicators: (i) Trade-GDP Balance Ratio, Real GDP, Import-Export, Nominal Wages, Real Wages, Household Consumption, Inflation; (ii) Sectoral Performance: Amount of Output/Production, Employment, Community Consumption, Output and Output prices, Export and Import. Arranged based on optimum Pareto from aggregate performance of 27 affected sectors, both in terms of Productivity in producing output (GDP, Trade Balance, Income, Indirect Taxes) and in the Employment.

The results of the analysis show that the impact of public policy in investment in the ICT sector, as has a positive impact on all macroeconomic indicators and sectoral performance. For this reason, the recommendation related to public policy is that the government needs to encourage the issuance of a legal standing; both at the central and regional and sectoral levels, which can oversee public policies in each sector in the development and utilization of ICT. This study has been proved that the role of ICT on the national economy is increasingly needed as a sustainable driver of national and sectoral economy.

Based on the results of the analysis of the economic aspects above, it is necessary to implement the appropriate public policy transformation strategy. In addition, it needs to be accompanied by public policies to increase investment in the ICT sector in order to achieve digital inclusion in all other regions and industrial sectors. Iimplications of public policy that are needed are: creating a positive effect from the development of ICT on other industrial sectors and the need for synchronization between institutions (sectors) and the central and regional levels, in an effort to optimize the role of the ICT sector which contributes to macroeconomic indicators and sectoral performance.

In addition to the strategy needed to transform in all aspects of the economy, it is also necessary to harmonize public policies at the central and regional levels. Public policy that encompasses the driving factor of the digital economy. As a system, public policy needs to be evaluated, harmonized, synergies both horizontally (between government agencies and sectors) and vertically (central and regional levels), as well as between different hierarchical sectors. Public policy has a role to achieve justice for all elements of society of economic actors.

Keywords: public policy; productivity; ICT; digital economy; macroeconomics, sectoral performance

Suggested Citation

Amanasto, Widi and Hamzah, Muhammad Zilal and Sudaryono, Bambang, How the Effect of Investment Policy at Information and Communication Technology for Digital Economy Implementation Toward Macroeconomic Indicators and Sectoral Performance, in Indonesia? (September 30, 2019). OIDA International Journal of Sustainable Development, Vol. 12, No. 09, pp. 11-24, 2019. Available at SSRN: https://ssrn.com/abstract=3555338

Widi Amanasto (Contact Author)

Universitas Trisakti - Economics and Business Faculty ( email )

Jl. Kyai Tapa No.1, Grogol, RT.6/RW.16
Tomang, Grogol petamburan, Kota Jakarta Barat
Jakarta, Daerah Khusus Ibukota
Indonesia

Muhammad Zilal Hamzah

Sekolah Tinggi Ilmu Ekonomi Bisnis Indonesia ( email )

Jl.Raya Kebayoran Lama No.46
Jakarta, ID DKI Jakarta 11560
Indonesia
62215307009 (Phone)
62215307008 (Fax)

Centre for Financial Inclusion ( email )

West Jakarta, 11440
Indonesia

Bambang Sudaryono

Indonesian Business School ( email )

Jakarta
Indonesia

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