The Impact of Economic Digitalization and the Digital Divide on Community Welfare in West Sulawesi Province

Abstract

This research paper aims to explore the impact of economic digitalization and the digital divide on the welfare of the people in West Sulawesi, Indonesia. The study acknowledges that while economic digitalization has the potential to reduce poverty rates, the unequal conditions regarding internet access in Indonesia, particularly in West Sulawesi, have resulted in a digital divide. The term “digital divide” describes the disparity in access to information and communication technologies among individuals, households, businesses, or regions that are at varying socio-economic statuses. In the context of West Sulawesi, inadequate internet coverage has created this divide, potentially hindering the benefits of economic digitalization. The research employs a quantitative method to analyze the situation. Quantitative investigation entails gathering and transforming data into numeric format to facilitate statistical computations and deductions.

This method is beneficial for obtaining objective and generalizable data. Primary data for the research was collected through questionnaires, interviews, and observations. These methods allow for direct interaction with the subjects and provide first-hand, original data. Questionnaires and interviews can provide valuable insights into the subjects’ experiences, opinions, and behaviors, while observations can offer additional context and information. Secondary data was collected through articles, previous research, books, and reference journals related to the research topic. This type of data provides a broader context, supports or contradicts the primary data, and can help refine the research focus. The population of this study is Micro, Small, and Medium Enterprises (MSMEs) in West Sulawesi Province. MSMEs are often seen as a driving force for economic growth, innovation, and social integration. Therefore, understanding the impact of the digital divide on these businesses can provide valuable insights into the overall welfare of the region. The sample size in Structural Equation Modeling (SEM) used in this research follows a minimum ratio of 5 respondents for each parameter in the research, or 10 respondents for every 1 parameter, or 15 respondents for every 1 parameter. This approach ensures a sufficient sample size for reliable and valid results. In conclusion, this research aims to provide a comprehensive understanding of the impact of economic digitalization and the digital divide on the welfare of the people of West Sulawesi. The findings could potentially inform policies and strategies to bridge the digital divide and maximize the benefits of economic digitalization.