A Literature Riview : Digital Financial Transformation and Economic Growth at the National Level

Abstract

The development of the digital economy has emerged as a crucial driver of national economic growth in Indonesia. This study aims to review and synthesize existing empirical and theoretical literature on the role of digital economic transformation in enhancing economic growth, financial inclusion, and the competitiveness of Micro, Small, and Medium Enterprises (MSMEs). The digital economy, characterized by the widespread adoption of information technology, digital platforms, and financial technologies, has reshaped economic activities across various sectors, including trade, services, and finance. Previous studies indicate that digitalization improves business efficiency, expands market access, reduces operational costs, and fosters innovation, thereby contributing positively to national and regional economic growth. Furthermore, the adoption of digital platforms and fintech services has significantly enhanced financial inclusion by increasing public access to formal financial services, stimulating household consumption, and supporting post-pandemic economic recovery. Empirical evidence also highlights the role of digital finance in accelerating MSME financing and improving productivity and employment creation. However, several challenges remain, including disparities in digital infrastructure, low levels of digital literacy, and regulatory constraints. Therefore, an integrated digital economic transformation strategy supported by government policies, infrastructure development, and human capital enhancement is essential to ensure the equitable distribution of digital economy benefits. Overall, the literature confirms that digital economic transformation plays a strategic role in strengthening Indonesia’s economic growth and long-term development.