The Digital Economy and Regional Development: Harnessing Technology for Economic Growth in Indonesia’s Outer Islands

Abstract

The digital economy has the potential to drive economic development in Indonesia's outer islands, where traditional industries and infrastructure are often underdeveloped. This paper explores the role of digital technology in fostering economic growth in remote and underdeveloped regions such as Nusa Tenggara, Maluku, and the Moluccas. By examining the rise of digital platforms, e-commerce, and mobile technologies, the paper highlights how local businesses and entrepreneurs are leveraging digital tools to access global markets, improve productivity, and create new economic opportunities. The study also investigates challenges such as limited internet access, digital literacy, and the digital divide. It provides policy recommendations for expanding digital infrastructure, improving digital skills, and supporting local innovation ecosystems. The paper contributes to the growing literature on how digital transformation can enhance regional development and bridge the economic gap between Indonesia’s islands.