The Role of the Information and Communication Technology Sector in the Indonesian Economy

Main Article Content

Karina Maryana
Sartika Djamaluddin


The contribution of ICTs to the overall production system in the economy is considered as one of the factors for growth and development of the national economy. The purpose of this research is to investigate the contribution of the ICT sectors to the Indonesian economy through the role of the ICT sectors in encouraging the growth of other sectors with linkage analysis, multiplier analysis and causative matrix analysis. Furthermore, this study investigates the sources of growth in the ICT sectors by decomposing the sources of change in its output. In particular, the input-output approach is adopted to describe the production activities and diffusion of the ICT sectors in the Indonesian economy for the period 2000-2014. The results show that apart from having large output multipliers, the ICT Manufacturing sector also encourages exports. The results of the decomposition show that the influence of the previous technology coefficient has a significant contribution to the output of the ICT sectors. However, these values have diminished in recent periods so that the role of the Indonesian ICT sectors as a GPT sector has become less than optimal.

Article Details



Amir, H., & Nazara, S. (2005). “Analisis Perubahan Struktur Ekonomi (Economic Landscape) dan Kebijakan Strategi Pembangunan Jawa Timur Tahun 1994 dan 2000: Analisis Input-Output”.

Bazzazan, F. (2009). The Importance of ICT in Iran Input-Output Approach. Paper presented at International Conference on Information and Financial Engineering, IEEE Computer Society.

Black, S. E. & Lynch, L. M. (2001). How To Compete: The Impact Of Workplace Practices And Information Technology On Productivity. The Review of Economics and Statistics, MIT Press, vol. 83(3), pages 434-445, August.

Bugamelli, M., & Pagano, P. (2004). Barriers to Investment in ICT. Applied Economics, 36(20), 2275-2286.

Castiglione, C. (2009). ICT Investment and Firm Technical Efficiency. Paper Presented at EWEPA 2010, June, in Pisa, Castiglione/1126e0aeff6d647602909ff59a062ce7d339bfba.

Chenery, H. B. (1960). Patterns of industrial growth. The American Economic Review, 50(4), 624–654.

Dosi, G. (1982). Technical Paradigms and Technological Trajectories. Research Policy, 11, 147-162.

Draca, M., Sadun, R. Faber, B. Kretschmer, T. Overman, H. (2008). The Economic Impact of ICT: First Interim Report. Centre for Economic Performance, London School of Economics.

Duc, D. T. V., Linh, D. H. (2020). Analysing ICT Economic Impact in Vietnam. Research in World Economy, 11.

Greenan, N., Mairessee, J., Topiol-Bensaid, A. (2001). Information Technology and Research and Development Impacts on Productivity and Skills: Looking for Correlations on French Firm-Level Data. In Information Technology, Productivity, and Economic Growth: Intenational Evidence and Implications for Economic Development, M. Pohjola, Ed. Oxford University Press, Cambridge, U.K., 119-148.

Helpman, E. (Ed.). (1998). General-purpose technologies and economic growth. Cambridge: MIT Press.

Helpman, E., Trajtenberg, M., 1998. Diffusion of general purpose technologies. In: Helpman, E. (Ed.), General Purpose Technologies and Economic Growth. MIT Press, Cambridge, pp. 85–119 (Chapter 3).

Jorgenson, D. W. (2001). Information Technology and the U.S. Economy (Presidential Address to the American Economic Assosiation). American Econ Rev. 91, 1, 1-32.

Kecek D., Hrustek N. Z., Dusak V. (2016). Analysis of multiplier effects of ICT sectors: a Croatian Case. Croatian Operational Research Review, 7, 129-145.

Keller, W. (2004). International Technology Diffusion. Journal of Economic Literature, 42(3), 752-782.

Leontief, W. (1986). Input-Output Economics. 2nd ed., Oxford University Press: New York, Oxford.

Lipsey, R. G., Carlaw, K. I., and Bekar, C. T. (2005). Economic transformations. General purpose

McKinsey. (2016). Unlocking Indonesia’s Digital Opportunity. Available at

Niebel, T. (2018). ICT and economic growth – Comparing Developing, Emerging and Developed Countries. World Development, Elsevier, vol. 104(C), pages 197-211.

OECD. (2009). Information Economy Product Definitions Based on the Central Product Classification. Geneva.

Perez, C. (2004). Technological Revolutions, Paradigm Shifts, and Socio-Institutional Change, in: R. Erik (Eds.), Globalization, Economic Development and Inequality: An Alternative Perspective, Cheltenham, UK, Northampton, MA, USA: Edward Elgar, pp. 217-242.

Rohman, I. K. & Bohlin, E. (2013). Decomposition Analysis of the Telecommunications Sector in Indonesia: What Does the Cellular Era Shed Light on?, Telecommunications Policy, Elsevier, vol. 38(3), pages 248-263.

Roller, L. H & Waverman, L. (2001). Telecommunications Infrastructure and Economic Development: A Simultaneous Approach. American Economic Review. 91. 909-923.

Romer, P. M. (1986). Increasing Returns and Long-run Growth, Journal of Political Economy 94(5).

Roy, S., Das, T., & Chakraborty, D. (2002). A study on the Indian Information Sector: an Experiment with Input-Output Techniques. Economic System Research, 14 (2), pp.107-128.

Schultz, T. (1961). Investment in human capital. The American Economic Review, 51(1), 1-17.

Sheshinski, E. (1967). Optimal Accumulation with Learning by Doing. In: Karl, S., Ed., Essays on the Theory of Optimal Economic Growth, MIT Press, Cambridge, 31-52.

Steinmueller, W. E. (2001). ICTs and the Possibilities for Leapfrogging by Developing Countries. Intenational Labour Review, 140(2), 193-210

Stiroh, K. J. (2002). Information Technology and the U.S. Productivity Revival: What Do the Industry Data Say?. The American Economic Review, vol. 92, No. 5.

Strohmaier, R. & Rainer, A., 2016. Studying general purpose technologies in a multi-sector framework: The case of ICT in Denmark. Structural Change and Economic Dynamics, Elsevier, vol. 36(C), pages 34-49.

Toh, M. H., & Thangavelu, S. M. (2013). An Input-Output Study of the Singapore Information Sector. Economic Systems Research, 25(2), 233–244.

UNCTAD. (2008). International Standard Industrial Classification of all Economic Activities (ISIC), Rev.4. Department of Economic and Social Affairs, Statistics Division, New York.

Uzawa, H. (1965). Optimum Technical Change in An Aggregative Model of Economic Growth. International Economic Review, 6(1), 18-31. doi:10.2307/2525621

WIOD. (2016). World Input-Output Database. Available at di