THE EFFECT OF TELECOMMUNICATIONS INFRASTRUCTURE ON INCLUSIVE ECONOMIC GROWTH IN INDONESIA 2011−2021

Abstract

Inclusive economic growth refers to economic development that promotes equity, benefiting all segments of society, reducing inequality, and addressing unemployment. Indonesia, as one of the world's largest archipelago nations, faces challenges of uneven population distribution and varying socio-economic backgrounds, leading to persistent issues of inequality and unemployment. Telecommunication infrastructure plays a crucial role by establishing information and communication networks that can contribute to accelerating economic equality. This study aims to examine the impact of telecommunications infrastructure on inclusive economic growth in Indonesia, utilizing panel data from 34 provinces spanning the years 2011 to 2021 and employing the Fixed Effect Model (FEM) methodology. The findings demonstrate that indicators such as base transceiver station (BTS), cellular telephone usage, and internet connectivity have a positive effect on per capita income growth, while simultaneously reducing unemployment, inequality, and raising the inclusive economic development index (“Indeks Pembangunan Ekonomi Inklusif-IPEI”). Moreover, the effects of telecommunications infrastructure vary across different sub-regions, highlighting disparities in infrastructure development and variations in technological expertise across regions.