Beyond Digital Adoption: What Has Changed in Indonesia's Economy?

Author: Ircham Andrianto Taufick
Head of the Payment System and Rupiah Currency Management Team, Bank Indonesia Representative Office for North Sulawesi Province

JurnalPost.com - Payments are becoming increasingly effortless. Local taxes can be settled via mobile phones, small stalls accept cashless payments using QRIS, and local governments are beginning to reduce their reliance on cash-based collection counters.

At the same time, the younger generation is developing various applications to address challenges in skills, food security, financing, and public services.

These developments indicate that Indonesia has passed a crucial stage in its digital transformation: expanding the use of technology in daily economic activities.

In August 2026, the volume of digital payments reached 6.11 billion transactions, a 40.36 percent increase compared to the same period the previous year. QRIS transactions even surged by 67.22 percent.

These figures demonstrate a high level of adoption. However, the growing volume of digital transactions raises a new question: as more activities shift to the digital space, to what extent does this change truly enhance the economy's ability to create value?

This question becomes relevant as the Indonesian Digital Finance Economy Festival and the Indonesia Fintech Summit & Expo (FEKDI x IFSE 2026) are held from September 24–26, 2026.

This year, a series of events brought together the National Coordination Meeting on Inflation Control and the Acceleration and Expansion of Regional Digitalization (P2DD), the Indonesian Digital Innovation Center (PIDI), the P2DD CATALYST, social protection digitalization, talent development, and various other digital transformation agendas.

The structure of this agenda suggests that Indonesia's digitalization path is slowly entering a new phase: no longer just about expanding technology adoption, but ensuring that technology generates more tangible economic impacts.

From Adoption to Conversion

First-generation digitalization was relatively easy to identify.

Cash turned into QRIS. Payments at counters shifted to applications. Physical documents were converted into digital data. Success was then measured by the number of users, merchants, transactions, or institutions that had adopted the technology.

That stage was essential as a foundation. However, as the digital ecosystem matures, the number of users or transactions is no longer sufficient to describe success.

When a cash transaction shifts to a QRIS payment, digital transaction statistics do indeed rise. However, this change in payment method does not automatically create new economic activity.

Greater economic value is only created when digital efficiency enables something that was previously difficult to achieve.

For example, merchants can reach a wider customer base, transaction data helps businesses obtain financing, or local governments can improve the effectiveness of tax and levy collection.

It is at this stage that the challenge of digital transformation shifts from mere adoption to conversion: the extent to which the use of technology can be translated into increased productivity.

This distinction is important as the Indonesian economy was recorded to have grown by 5.29 percent year-on-year in the second quarter of 2026.

Gross Domestic Product growth cannot be directly compared to the growth of digital transactions. Yet, that is precisely the point. Increased digital activity does not by itself explain how much new economic value has been successfully created.

When Digitalization Meets Fiscal Capacity

The experience of local governments can serve as an interesting example to observe the relationship between digitalization and productivity.

The electronification of local government transactions has seen significant development. The Coordinating Ministry for Economic Affairs states that 518 out of 546 local governments have reached the digital stage based on the Regional Government Transaction Electronification Index (ETPD).

The realization of non-cash local taxes and levies in the first semester of 2026 also reached approximately IDR 165 trillion, an increase of 10.6 percent year-on-year.

The P2DD CATALYST was then developed as a knowledge hub to strengthen the human resource capacity of local governments, improve fiscal literacy, expand tax and levy payment channels, and strengthen the accountability of public financial management.

North Sulawesi also provides a picture of how digitalization is beginning to intersect directly with regional fiscal capacity.

In 2024, local tax revenue was recorded at approximately IDR 1.01 trillion, while local levies amounted to IDR 150.90 billion.

A year later, local tax revenue increased to approximately IDR 1.08 trillion, while local levies reached IDR 208.18 billion.

Thus, tax revenue grew by about 6.9 percent, while levy revenue increased by nearly 38 percent.

This increase cannot, of course, be entirely attributed to digitalization. Many other factors influence regional revenue.

However, the data illustrates that the quality of technology implementation is a decisive factor.

New digital payment channels will only provide added value when accompanied by administrative improvements, better data management, and the institution's ability to utilize information to refine policies and services.

The relationship between technology and productivity is not always a straight line.

Technology opens up various new possibilities. However, productivity is only created when those possibilities meet the capacity of humans and institutions to transform technology into more effective work processes.

In other words, technology strengthened by capability has the potential to generate productivity.

Two local governments may have the same digital payment channel. However, the results can differ if one is able to integrate data, redesign work processes, and improve service quality, while the other merely replaces cash payments with a QR code.

In this context, the digital divide in the future will not only relate to who has access to technology, but who is capable of turning technology into tangible results.

The Digital Economy Remains a Human Economy

Similar issues are also visible in the development of innovation through the Indonesian Digital Innovation Center.

PIDI guides innovators through various stages, ranging from training, project development, business matching, to meetings with potential users and investors.

One innovation that has garnered attention is YUDHA AJA, the 2nd place winner in the Student category at the PIDI Digdaya x Hackathon 2026.

This innovation in the field of Talent & HR Tech attempts to transform the competency selection preparation process, which was previously passive, into a competitive learning experience in real-time through a PvP Learning Battleconcept.

Through this system, users do not just practice answering questions, but also gain an overview of the skill gaps that still need to be addressed.

Imagine someone preparing for their future. Instead of just doing practice questions repeatedly without knowing their weaknesses, they can obtain information about the skills they are lagging in and then be motivated to improve them.

The achievement of YUDHA AJA certainly cannot be considered proof that technology has increased workforce productivity on a broad scale.

However, this innovation shows an important direction: technology is beginning to be developed not just to speed up processes, but to help humans learn, recognize weaknesses, and increase their readiness for the workforce.

Ultimately, the digital economy remains a human economy.

Servers may be able to process information faster. Payments can be completed in mere seconds. Artificial intelligence can analyze data in amounts previously unimaginable.

However, productivity is only truly created when technology enables humans, businesses, and institutions to do things better than before.

New Measures of Success

Second-generation digitalization requires different measures of success than the previous phase.

Success is not sufficiently measured solely by the number of applications, users, merchants, or transactions.

More relevant measures include how much costs can be reduced, how many MSMEs gain access to new markets and financing, how much more efficient public services become, how effectively regional revenue can be collected, and how many innovations truly move from the prototype stage to real-world use.

The FEKDI x IFSE 2026 agenda explicitly begins to direct discussions toward economic productivity, optimization of local own-source revenue, and how digital financial innovation moves from the experimental stage to implementation.

Indonesia has come a long way in making its economic activities more digital.

The next stages will be far more challenging.

The success of digital transformation is no longer sufficiently proven by an increasing number of transactions or applications. The challenge is to ensure that every technological advancement truly enhances the ability of humans, businesses, and institutions to create economic added value.

Because in the end, the most important question is no longer how digital Indonesia has become, but how much that digitalization has made Indonesia more productive.