Indonesia’s Digital Economy: Opportunities, Challenges, and Implications

Abstract

Indonesia’s digital economy has experienced rapid growth in recent years, mainly driven by technology adoption, increased internet penetration, and the impact of the COVID-19 pandemic which accelerated the transition of economic activities from offline to online. This research aims to analyze the development of Indonesia’s digital economy in a global and national context, by highlighting the role of MSMEs, regulatory challenges, digital literacy, and financial inclusion. Using a descriptive method with a content analysis approach, this study collects secondary data from journals, reports, and current policy documents to describe the dynamics of Indonesia’s digital economy. The results of the study show that digitalization opens up significant opportunities for economic growth and increased competitiveness, especially through strengthening MSMEs and expanding fintech services. However, there are challenges that still need to be overcome, such as low digital literacy, regulations that are not fully adaptive, the dominance of foreign companies in the marketplace sector, and inequality of digital infrastructure between regions. This study concludes that an integrated and inclusive national strategy is needed to ensure that the digital economy can develop sustainably while providing broad benefits to the Indonesian people.