•  
  •  
 

Abstract

Digitalization has become a key pillar in driving economic, social, and governance transformation in Indonesia. However, it is necessary to verify whether digitalization has supported sustainable development goals. This study evaluates the impact of digitalization on sustainability dimensions at the district/city level in Indonesia using the Propensity Score Matching (PSM). The results show that digitalization has a significant negative impact on environmental quality. Conversely, the impact on the economy and social welfare is not statistically significant, indicating that the benefits of digitalization are not evenly distributed and tend to be concentrated among groups that already have digital access and capabilities.

Bahasa Abstract

Digitalisasi telah menjadi pilar utama dalam mendorong transformasi ekonomi, sosial, dan tata kelola di Indonesia. Namun, perlu investigasi apakah digitalisasi telah mendukung tujuan pembangunan berkelanjutan secara komprehensif. Studi ini mengevaluasi dampak digitalisasi pada dimensi keberlanjutan di tingkat kabupaten/kota di Indonesia menggunakan pendekatan Propensity Score Matching (PSM). Hasil penelitian menunjukkan bahwa digitalisasi memiliki dampak negatif yang signifikan terhadap kualitas lingkungan. Sebaliknya, dampak terhadap ekonomi dan kesejahteraan sosial tidak signifikan secara statistik, menunjukkan bahwa manfaat digitalisasi tidak terdistribusi secara merata dan cenderung terkonsentrasi di kalangan kelompok yang sudah memiliki akses dan kemampuan digital.

References

[1] Abdillah, K. (2023). Pengaruh digitalisasi dan variabelvariabel ekonomi terhadap pertumbuhan ekonomi di Asia. Jurnal Ekonomi Pembangunan STIE Muhammadiyah Palopo, 9(1), 17-27. doi: 10.35906/jep.v9i1.1368.

[2] Ahmad, F., Draz, M. U., Su, L., & Rauf, A. (2019). Taking the bad with the good: The nexus between tourism and environmental degradation in the lower middle-income Southeast Asian economies. Journal of Cleaner Production, 233, 1240-1249. doi: 10.1016/j.jclepro.2019.06.138.

[3] Åsberg, A., Johnsen, H., Mikkelsen, G., & Hov, G. G. (2016). Using probit regression to disclose the analytical performance of qualitative and semi-quantitative tests. Scandinavian Journal of Clinical and Laboratory Investigation, 76(7), 515-519. doi: 10.1080/00365513.2016.1202446.

[4] Balogun, A. L., Marks, D., Sharma, R., Shekhar, H., Balmes, C., Maheng, D., ... & Salehi, P. (2020). Assessing the potentials of digitalization as a tool for climate change adaptation and sustainable development in urban centres. Sustainable Cities and Society, 53, 101888. doi: 10.1016/j.scs.2019.101888.

[5] Blichfeldt, H., & Faullant, R. (2021). Performance effects of digital technology adoption and product & service innovation–A process-industry perspective. Technovation, 105, 102275. doi: 10.1016/j.technovation.2021.102275.

[6] BPS. (2010). [Metode Baru] Indeks Pembangunan Manusia (IPM), 2010. Badan Pusat Statistik. Diakses 4 Agustus 2025 dari https://www.bps.go.id/id/statistics-table/2/NDEzIzI=/-metode-baru-indeks-pembangunan-manusia.html.

[7] Bungas, K., Adji, F. F., Darung, U., Nyahu, N., Ruthena, Y., & Sosilawaty, S. (2024). Environmental management technologies, environmental policy stringency, energy productivity and pollution emission: Fresh evidence from Indonesia under SRIRPAT framework. International Journal of Energy Economics and Policy, 14(3), 70-78. doi: 10.32479/ijeep.15690.

[8] Caliendo, M., & Kopeinig, S. (2008). Some practical guidance for the implementation of propensity score matching. Journal of Economic Surveys, 22(1), 31-72. doi: 10.1111/j.1467-6419.2007.00527.x.

[9] Camarinha-Matos, L. M., Fornasiero, R., Ramezani, J., & Ferrada, F. (2019). Collaborative networks: A pillar of digital transformation. Applied Sciences, 9(24), 5431. doi: 10.3390/app9245431.

[10] Chen, X., Tang, R., Hu, D., Xu, X., Tang, X., Yi, G., & Zhang, W. (2024). Path and strategy of pollution and carbon reduction by digitization in electric power enterprises. Bulletin of Chinese Academy of Sciences, 39(2), 298-310. doi: 10.16418/j.issn.1000-3045.20230724003.

[11] Da˛browska, J., Almpanopoulou, A., Brem, A., Chesbrough, H., Cucino, V., Di Minin, A., ... & Ritala, P. (2022). Digital transformation, for better or worse: A critical multi-level research agenda. R&D Management, 52(5), 930-954. doi: 10.1111/radm.12531.

[12] Djatmiko, G. H., Sinaga, O., & Pawirosumarto, S. (2025). Digital transformation and social inclusion in public services:Aqualitative analysis of e-government adoption for marginalized communities in sustainable governance. Sustainability, 17(7), 2908. doi: 10.3390/su17072908.

[13] Fan, F., & Zhang, X. (2021). Transformation effect of resource-based cities based on PSM-DID model: An empirical analysis from China. Environmental Impact Assessment Review, 91, 106648. doi: 10.1016/j.eiar.2021.106648.

[14] Fratila (Adam), A., Paunescu, M., Nichita, E. M., & Lazar, P. (2023). Digitalization of Romanian public administration: A panel data analysis at regional level. Journal of Business Economics and Management (JBEM), 24(1), 74-92. doi: 10.3846/jbem.2023.18574.

[15] Fu, Y., He, C., & Luo, L. (2021). Does the low-carbon city policy make a difference? Empirical evidence of the pilot scheme in China with DEA and PSM-DID. Ecological indicators, 122, 107238. doi: 10.1016/j.ecolind.2020.107238.

[16] Gamidullaeva, L., Tolstykh, T., Bystrov, A., Radaykin, A., & Shmeleva, N. (2021). Cross-sectoral digital platform as a tool for innovation ecosystem development. Sustainability, 13(21), 11686. doi: 10.3390/su132111686.

[17] Garudea, G., Soemardiono, B., & Novianto, D. (2024). Conservation policy of visual quality in connecting area between historical areas. The Journal of Indonesia Sustainable Development Planning, 5(2), 146-157. doi: 10.46456/jisdep. v5i2.453.

[18] Goel, A., Masurkar, S., & Pathade, G. R. (2024). An overview of digital transformation and environmental sustainability: Threats, opportunities, and solutions. Sustainability, 16(24), 11079. doi: 10.3390/su162411079.

[19] Guillaume, B., Benjamin, D., & Vincent, C. (2022). Review of the impact of IT on the environment and solution with a detailed assessment of the associated gray literature. Sustainability, 14(4), 2457. doi: 10.3390/su14042457.

[20] Gultom, D., Hutabarat, G. S. P., Dirgantara, M., Pratama, R., & Hidayah, A. (2024). The positive impact of digitalization on the Indonesia economy. Jurnal Konstanta, 3(1), 107-116. doi: 10.29303/konstanta.v3i1.1078.

[21] Hao, X., Li, Y., Ren, S., Wu, H., & Hao, Y. (2023). The role of digitalization on green economic growth: Does industrial structure optimization and green innovation matter?. Journal of Environmental Management, 325, 116504. doi: 10.1016/j.jenvman.2022.116504.

[22] Haryanti, T., Rakhmawati, N. A., & Subriadi, A. P. (2024). Navigating the digital transformation landscape in Indonesia: A qualitative sectoral analysis. 2024 IEEE International Symposium on Consumer Technology (ISCT), pp. 805-811. doi: 10.1109/ISCT62336.2024.10791195.

[23] He, G., Jiang, H.,&Zhu,Y. (2024). The effect of digital technology development on the improvement of environmental governance capacity: A case study of China. Ecological Indicators, 165, 112162. doi: 10.1016/j.ecolind.2024.112162.

[24] Kartiasih, F., Djalal Nachrowi, N., Wisana, I. D. G. K., & Handayani, D. (2023). Inequalities of Indonesia’s regional digital development and its association with socioeconomic characteristics: A spatial and multivariate analysis. Information Technology for Development, 29(2-3), 299-328. doi: 10.1080/02681102.2022.2110556.

[25] Kartiasih, F., Rosanti, H. P., Do Miswa, S., & Hakim, A. R. (2025). The impact of digital technology on environmental quality: Empirical evidence from Indonesia. Signifikan: Jurnal Ilmu Ekonomi, 14(1), 77-92. doi: 10.15408/sjie.v14i1.44874.

[26] Kementerian PPN/Bappenas. (2020). Ringkasan eksekutif pencapaian pelaksanaan pencapaian Tujuan Pembangunan Berkelanjutan/Sustainable Development Goals (TPB/SDGs) 2020. Kedeputian Bidang Kemaritiman dan Sumber Daya Alam, Kementerian Perencanaan Pembangunan Nasional (PPN)/Badan Perencanaan Pembangunan Nasional (Bappenas). Diakses 4 Agustus 2025 dari https://sdgs.bappenas.go.id/website/wp-content/uploads/2023/11/Laporan-SDGs-tahun-2020.pdf.

[27] Khandker, S. R., Koolwal, G. B., & Samad, H. A. (2010). Handbook on impact evaluation: Quantitative methods and practices. The World Bank.

[28] KLHK. (2023). Laporan Kinerja 2023: Produktivitas tapak hutan dan lingkungan hidup untuk transformasi ekonomi Indonesia. Kementerian Lingkungan Hidup dan Kehutanan. Diakses 4 Agustus 2025 dari https://www.kehutanan.go.id/s/uploads/Laporan_Kinerja_Kementerian_LHK_2023_mini_1_2a33cc972b_b2546db22d.pdf.

[29] Komdigi. (2023). Indeks Masyarakat Digital Indonesia (IMDI) tahun 2022-2023. Pusat Data dan Sarana Informatika Kementerian Komunikasi dan Digital. Diakses 4 Agustus 2025 dari https://data.komdigi.go.id/opendata/dataset/ indeks-masyarakat-digital-indonesia-imdi-tahun-2022-2023.

[30] Komdigi. (2025). Indeks Masyarakat Digital Indonesia: Apa itu IMDI?. Pusbang Ekosistem SDM Komdigi, BPSDM Komdigi - Kementerian Komunikasi dan Digital RI. Diakses 4 Agustus 2025 dari https://imdi.sdmdigital.id/.

[31] Kryzhanovskij, O. A., Baburina, N. A., & Ljovkina, A. O. (2021). How to make digitalization better serve an increasing quality of life?. Sustainability, 13(2), 611. doi: 10.3390/su13020611.

[32] Kurniawan, T. A., Meidiana, C., Goh, H. H., Zhang, D., Othman, M. H. D., Aziz, F., ... & Ali, I. (2024). Unlocking synergies between waste management and climate change mitigation to accelerate decarbonization through circular-economy digitalization in Indonesia. Sustainable Production and Consumption, 46, 522-542. doi: 10.1016/j.spc.2024.03.011.

[33] Kurniawati, T., Sofya, R., Syofyan, R., Sofia, N., Ridzuan, A. R., & Shaari, M. S. M. (2023). Innovating for sustainability: The intersection of technology and environmental quality in Indonesia. International Journal of Energy Economics and Policy, 13(6), 170-178. doi: 10.32479/ijeep.14794.

[34] Lee, C. C., He, Z. W., & Yuan, Z. (2023). A pathway to sustainable development: Digitization and green productivity. Energy Economics, 124, 106772. doi: 10.1016/j.eneco.2023.106772.

[35] Leon, A. C., & Hedeker, D. (2007). Quintile stratification based on a misspecified propensity score in longitudinal treatment effectiveness analyses of ordinal doses. Computational Statistics & Data Analysis, 51(12), 6114-6122. doi: 10.1016/j.csda.2006.12.021.

[36] Ma, R., & Lin, B. (2023). Digitalization and energysaving and emission reduction in Chinese cities: Synergy between industrialization and digitalization. Applied Energy, 345, 121308. doi: 10.1016/j.apenergy.2023.121308.

[37] Magoutas, A. I., Chaideftou, M., Skandali, D., & Chountalas, P. T. (2024). Digital progression and economic growth: Analyzing the impact of ICT advancements on the GDP of European Union countries. Economies, 12(3), 63. doi: 10.3390/economies12030063.

[38] Marti, L., & Puertas, R. (2023). Analysis of European competitiveness based on its innovative capacity and digitalization level. Technology in Society, 72, 102206. doi: 10.1016/j.techsoc.2023.102206.

[39] Maryanti, S., Handra, H., & Yonnedi, E. (2023). Kemandirian dan kemampuan keuangan daerah dan dampaknya terhadap pertumbuhan ekonomi di Provinsi Riau. Jurnal Ilmiah Ekonomi dan Bisnis, 20(1), 9-18. doi: 10.31849/jieb. v20i1.12292.

[40] Meidyasari, S. (2024). The impact of digital economy in driving economic growth and development in Indonesia. INJURITY: Journal of Interdisciplinary Studies, 3(11), 777- 783. doi: 10.58631/injurity.v3i11.1306.

[41] Meinhold, R., Wagner, C., & Dhar, B. K. (2025). Digital sustainability and eco-environmental sustainability: A review of emerging technologies, resource challenges, and policy implications. Sustainable Development, 33(2), 2323-2338. doi: 10.1002/sd.3240.

[42] Mondejar, M. E., Avtar, R., Diaz, H. L. B., Dubey, R. K., Esteban, J., Gómez-Morales, A., ... & Garcia- Segura, S. (2021). Digitalization to achieve sustainable development goals: Steps towards a smart green planet. Science of the Total Environment, 794, 148539. doi: 10.1016/j.scitotenv.2021.148539.

[43] Novianti, A. G., & Asmara, A. (2023). The development of digital technology and its impact on Indonesia’s economic growth. International Journal of Research and Review, 10(9), 297-319. doi: 10.52403/ijrr.20230932.

[44] Palar, B. E., Maruli, R. S., & Pangaribuan, H. (2024). Pengaruh pemahaman digitalisasi sistem administrasi pajak dan digital transformasi terhadap kepatuhan pajak non-karyawan. Jurnal Lentera Bisnis, 13(3), 1699-1716. doi: 10.34127/jrlab.v13i3.1217.

[45] Pan, W., & Bai, H. (2015). Propensity score interval matching: Using bootstrap confidence intervals for accommodating estimation errors of propensity scores. BMC Medical Research Methodology, 15(1), 53. doi: 10.1186/s12874-015-0049-3.

[46] Peng, L., & Mariadas, P. A. (2025). Research on the lowcarbon spatial spillover effect development of the digital economy enabled by new quality productivity. Sustainability, 17(4), 1746. doi: 10.3390/su17041746.

[47] Plekhanov, D., Franke, H., & Netland, T. H. (2023). Digital transformation: A review and research agenda. European Management Journal, 41(6), 821-844. doi: 10.1016/j.emj.2022.09.007.

[48] Pratomo, A. B., Muthmainah, H. N., Kristiono, N., & Setyawan, G. C. (2023). Implementation of Internet of Things (IoT) technology in air pollution monitoring in Jakarta: Quantitative analysis of the influence of air quality change and its impact on public health in Jakarta. West Science Nature and Technology, 1(1), 40-47. doi: 10.58812/wsnt.v1i01.225.

[49] Purba, D. S., Permatasari, P. D., Tanjung, N., Rahayu, P., Fitriani, R., & Wulandari, S. (2025). Analisis perkembangan ekonomi digital dalam meningkatkan pertumbuhan ekonomi di Indonesia. Jurnal Masharif Al-Syariah: Jurnal Ekonomi dan Perbankan Syariah, 10(1), 126-139. doi: 10.30651/jms.v10i1.25367.

[50] Rochmatullah, M. R., Probohudono, A. N., Rahmawati, R., Paramita, R. W. D., & Badriyah, N. (2023). Local government competitiveness analysis using the perspective of organizational excellence: Evidence from Indonesia. Problems and Perspectives in Management, 21(2), 356-370. doi: 10.21511/ppm.21(2).2023.35.

[51] Rosenbaum, P. R. (1987). The role of a second control group in an observational study. Statistical Science, 2(3), 292-306. doi: 10.1214/ss/1177013232.

[52] Savandha, S. D., & Pramesti, G. N. D. P. (2025). DeepSeek AI dan disrupsi teknologi Tiongkok: Analisis dampak sosioekonomi dari adopsi AI tingkat lanjut dalam era pascapandemi. Co-Value Jurnal Ekonomi Koperasi dan Kewirausahaan, 16(1).

[53] Setiawan, T., & Samith, M. F. (2025). Indonesia’s marine resources innovation: Digital transformation in blue economy policy for economic sustainability. Journal of European Economy, 24(1), 88–112. doi: 10.35774/jee2025.01.088.

[54] Setiawan, T., Mughits, M. H., & Samith, M. F. (2025a). Urban health performance as a supporting instrument for ’sustainable healthy cities’ in Sustainable Development Goals (SDGs). Daengku: Journal of Humanities and Social Sciences Innovation, 5(1), 88-105. doi: 10.35877/454RI.daengku3422.

[55] Setiawan, T., Samith, M. F., & Mughits, M. H. (2025b). The Sustainable Development Nexus (SDN): Delivering Environmental Innovation Technologies (EITs) for Community Ecological Resilience (CER) in Indonesia. Scientia. Technology, Science and Society, 2(1), 111-132. doi: 10.59324/stss.2025.2(1).09.

[56] Shahbaz, M., Wang, J., Dong, K., & Zhao, J. (2022). The impact of digital economy on energy transition across the globe: The mediating role of government governance. Renewable and Sustainable Energy Reviews, 166, 112620. doi: 10.1016/j.rser.2022.112620.

[57] Sidek, N. Z. M., Hasanah, A., & Othman, M. H. (2024). Navigating the green frontier: The impact of digitalization on environmental pollution in selected South East Asian economies. International Journal of Research and Innovation in Social Science (IJRISS), 8(6), 2771–2783. doi: 10.47772/IJRISS.2024.8100232.

[58] Surya, B., Menne, F., Sabhan, H., Suriani, S., Abubakar, H., & Idris, M. (2021). Economic growth, increasing productivity of SMEs, and open innovation. Journal of Open Innovation: Technology, Market, and Complexity, 7(1), 20. doi: 10.3390/joitmc7010020.

[59] Syamsiar, S. (2023). The role of digitalization in enhancing public service effectiveness in Indonesia. Jurnal Ilmiah Ilmu Administrasi Publik: Jurnal Pemikiran dan Penelitian Administrasi Publik, 13(1), 465. doi: 10.26858/jiap. v13i1.51026.

[60] Walton, N., & Nayak, B. S. (2021). Rethinking of Marxist perspectives on big data, artificial intelligence (AI) and capitalist economic development. Technological Forecasting and Social Change, 166, 120576. doi: 10.1016/j.techfore.2021.120576.

[61] Wang, J., & Xu, Y. (2022). How does digitalization affect haze pollution? The mediating role of energy consumption. International Journal of Environmental Research and Public Health, 19(18), 11204. doi: 10.3390/ijerph191811204.

[62] Wang, Z., Lin, S., Chen, Y., Lyulyov, O., & Pimonenko, T. (2023). Digitalization effect on business performance: Role of business model innovation. Sustainability, 15(11), 9020. doi: 10.3390/su15119020.

[63] Wang, P., & Cen, C. (2024). Does digital economy development promote innovation efficiency? A spatial econometric approach for Chinese regions. Technology Analysis & Strategic Management, 36(5), 931-945. doi: 10.1080/09537325.2022.2065980.

[64] Yin, S., & Yu, Y. (2022). An adoption-implementation framework of digital green knowledge to improve the performance of digital green innovation practices for industry 5.0. Journal of Cleaner Production, 363, 132608. doi: 10.1016/j.jclepro.2022.132608.

[65] Yoo, I., & Yi, C. G. (2022). Economic innovation caused by digital transformation and impact on social systems. Sustainability, 14(5), 2600. doi: 10.3390/su14052600.

[66] Zhang, W., Zhao, S., Wan, X., & Yao, Y. (2021). Study on the effect of digital economy on high-quality economic development in China. PLoS ONE, 16(9), e0257365. doi: 10.1371/journal.pone.0257365.

[67] Zhao, S., Teng, L., Arkorful, V. E., & Hu, H. (2023). Impacts of digital government on regional eco-innovation: Moderating role of dual environmental regulations. Technological Forecasting and Social Change, 196, 122842. doi: 10.1016/j.techfore.2023.122842.

Download

Share

COinS
 
 

To view the content in your browser, please download Adobe Reader or, alternately,
you may Download the file to your hard drive.

NOTE: The latest versions of Adobe Reader do not support viewing PDF files within Firefox on Mac OS and if you are using a modern (Intel) Mac, there is no official plugin for viewing PDF files within the browser window.