Decades of Growth: Analyzing the Impact of Technological Advancements on Sustainable Development in Indonesia

Abstract

This research analyzes the impact of technological developments on sustainable economic growth in Indonesia. Internet penetration and electrification ratio are used as technology proxies because they are General Purpose Technologies (GPTs). Data was taken from the World Bank from 1995 to 2021. Analysis was carried out using the Error Correction Model (ECM) to see long-term and short-term impacts. The research results show that internet penetration has a significant influence on Gross Domestic Product (GDP) in the long term, while electrification does not show a significant influence. The short-term impact of these two variables on GDP is also not significant. These findings indicate that technology adoption, particularly the internet, yields greater long-term benefits than short-term gains. This suggests that infrastructure investments, particularly in internet expansion, require time before their full economic impact is realized. Therefore, policymakers should prioritize and accelerate the development of internet infrastructure, recognizing its delayed but substantial contribution to sustainable economic growth.