MIVESTION

Mini EVEREST Competition

DIGITAL ECONOMIC TRANSFORMATION:

OPPORTUNITIES AND CHALLENGES FOR SUSTAINABLE
GROWTH

Disusun oleh:

Nadine Natasya Harahap (230501075/2023)

Nadia Juliana Sitindaon (230501107/2023)

Putri Amelia Harahap (230501067/2023)

UNIVERSITAS SUMATERA UTARA

MEDAN

2023
 LEMBAR PENGESAHAN

Karya tulis ini diajukan dalam rangka Full Paper MIVESTION 2023.

1. Judul Karya Tulis : “Digital Economic Transformation:

Opportunities and Challenges for Suistanable Growth”
2. Sub-Tema : Sustainable Economic Growth in a Digital
economic Revolution
3. Ketua Kelompok
a. Nama Lengkap : Nadine Natasya Harahap
b. NIM : 230501075
c. Jurusan/Fakultas : Ekonomi Pembangunan/Fakultas Ekonomi
dan Bisnis
d. Perguruan Tinggi : Universitas Sumater Utara
e. No. Telp/Hp : 082165643016
f. Alamat Email : nadinenatasyaharahap@gmail.com
4. Anggota Kelompok
a. Nama Lengkap : Nadia Juliana Sitindaon
b. Nama Lengkap : Putri Amelia Harahap

Mengetahui,

Medan, 28 Oktober 2023

Ketua Tim,

(Nadine Natasya Harahap)

230501075

i
 LEMBAR ORISINALITAS KARYA TULIS

Yang bertandatangan dibawah ini:

Nama Lengkap : Nadine Natasya Harahap

NIM : 230501075

Tempat/Tanggal Lahir : Medan, 02 Mei 2005

Fakultas/Universitas : Fakultas Ekonomi dan Bisnis/Universitas

Sumatera Utara

Alamat Rumah : Jl. Amal, Gg. Melati V No. 19B, Kel. Sunggal,
Kec. Medan Sunggal, Kota Medan

Dengan ini menyatakan bahwa karya tulis dengan judul “Digital Economic
Transformation: Opportunities and Challenges for Suistanable Growth” belum
pernah dipublikasikan pada jurnal ilmiah dan belum pernah menjuarai perlombaan
ditingkat Nasional/Internasional sebelumnya serta tidak mengandung unsur
plagiat didalamnya.

Demikianlah pernyataan ini dibuat dalam keadaan sadar dan tanpa ada
unsur paksaan dari siapapun. Jika dikemudian hari ditemukan ketidakbenaran
informasi, maka saya bersedia didiskualifikasi ataupun dibatalkan dari status juara
jika nanti menjadi juara dalam perlombaan ini.

Medan, 28 Oktober 2023

Ketua Tim,

(Nadine Natasya Harahap)

230501075

ii
 FOREWORD

Praise be to God Almighty who has bestowed His grace and guidance so
that we can complete the scientific work on "Digital Economic Transformation:
Opportunities and Challenges for Sustainable Growth". We would also like to thank
all those who have contributed to the preparation of this scientific work. Of course,
it will not be able to be maximized if it does not get support from various parties.
As compilers, we realize that there are still shortcomings, both in the preparation
and grammar of the delivery in this scientific work. Therefore, we humbly accept
suggestions and criticisms from readers so that we can improve this scientific work.
We hope that the scientific work we have compiled will provide benefits and
inspiration for readers.

Medan, 28 October 2023

Writer

iii
 TABLE OF CONTENTS

LEMBAR PENGESAHAN ..................................................................................... i

LEMBAR ORISINALITAS KARYA TULIS ........................................................ ii

FOREWORD ......................................................................................................... iii

TABLE OF CONTENTS ....................................................................................... iv

SUMMARY .............................................................................................................v

CHAPTER I INTRODUCTION ..............................................................................1

1.1 Background Knowledge .....................................................................................1

1.2 Problem Formulation .........................................................................................2

1.3 Objectives...........................................................................................................3

CHAPTER II LITERATURE REVIEW..................................................................4

2.1 Digital Economy Concept ..................................................................................4

2.2 Sustainable Growth ............................................................................................4

2.3 The Connection Between the Digital Economy and Sustainable Growth .........5

CHAPTER III RESEARCH METHODS ................................................................6

3.1 Data Collection Method .....................................................................................6

3.2 Data Processing and Analysis Methods .............................................................6

CHAPTER VI RESULT AND DISCUSSION ........................................................8

4.1 Digital Economy Transformation Opportunities for Sustainable Economic

Growth .....................................................................................................................8

4.2 How to Take Opportunities to Achieve Sustainable Global Growth ...............10

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4.3 Challenges and How to Solve Challenges Created by The Development of
Digital Economic Transformation .........................................................................11

CHAPTER V CLOSING .......................................................................................14

5.1 Conclusion .......................................................................................................14

5.2 Suggestions ......................................................................................................15

REFERENCES.......................................................................................................16

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 SUMMARY

Sustainable economic growth has become an important topic in the context of

current global economic development. In the rapidly evolving digital era, digital
economic transformation has become the main driver of economic growth in
various countries. The digital economic revolution has brought profound changes
in the way we work, interact and transact. Overall, the digital economy has the
potential to drive sustainable economic growth by enabling optimal resource
allocation, encouraging entrepreneurship, increasing productivity, facilitating
international trade, and contributing to economic growth.

Through the analysis of empirical data from several case studies, this paper
identifies sustainable economic growth as a careful balance between the
opportunities and challenges posed by the digital revolution in sustainable
economic growth. Analyzing the opportunities and challenges in the digital
economy is important to ensure that the digital economic revolution can be
optimized and felt by society. Governments, educational institutions, and
businesses must work together to ensure that access to digital technology can be
evenly distributed throughout society so that everyone has the opportunity to take
advantage of the opportunities offered by the digital economy This research also
illustrates how technological innovation, digital inclusion, and supportive policies
can strengthen sustainable economic growth.

The results of this study can provide important insights for policymakers,
entrepreneurs, and the general public on the importance of utilizing the
opportunities of the digital economy in sustainable economic growth. In addition,
this study also examines the importance of managing negative impacts and
addressing challenges posed by digital economic growth to ensure that this growth
is not only economically sustainable, but also socially and environmentally
sustainable.

Keywords: Opportunities, Challenges, Digital Economic, Revolution

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 CHAPTER I

INTRODUCTION

1.1 Background Knowledge

Sustainable economic growth has become an important topic in the
context of current global economic development. In the rapidly evolving
digital era, digital economic transformation has become a main driver of
economic growth in various countries. Digital economic transformation is a
continuous process and requires support and investment in information and
communication technology. Along with the rapid development of
information and communication technology, it has a significant impact on
consumer behavior in the world, selection and purchase decisions.

The digital economy has grown rapidly since the Covid-19

pandemic, because in the midst of a pandemic that has hit the whole world,
including Indonesia, people are not allowed to leave the house, so the
alternative that can be done is online. This online economic activity is often
referred to as the digital economy. In Indonesia, the development of the
digital economy has increased significantly since the Covid-19 pandemic
hit.

Sustainable economic growth is a concept of economic development

that is carried out in a sustainable manner and does not harm the
environment and takes into account social interests. Sustainable economic
growth must be carried out by taking into account three aspects, namely
economic, environmental and social aspects. Sustainable economic growth
is very important with regard to these three aspects. Economic growth that
does not pay attention to the environment tends to damage natural resources
and cause climate change. In addition, inclusive economic growth can be
enjoyed by all people, which can help reduce social disparities and

1
 inequalities. Sustainable economic development also focuses on improving
social welfare.
The digital economy plays an important role in sustainable
economic growth. Digital technologies make it possible to improve the
efficiency of various economic sectors, such as production, distribution, and
business management. These technologies can reduce transaction costs and
increase labor productivity, which in turn will contribute to sustainable
economic growth. In addition, the digital economy can create new jobs,
especially in the information and communication technology sector, which
can help reduce unemployment and increase income.

The development of the digital economy not only creates

opportunities for a sustainable economy, but also brings with it a number of
challenges that need to be addressed. To realize a sustainable transformation
of the digital economy, we need to address challenges such as unequal
access, appropriate regulation, cybersecurity, privacy, ethical issues and
misuse of data. To tackle these challenges, collaboration between different
parties, smart regulation, investment in digital infrastructure, education and
awareness of digital ethical issues are essential to achieve a sustainable
digital economic transformation.

Digital economic transformation can help countries achieve

sustainable economic growth through increased productivity, export
opportunities, job creation, innovation, energy efficiency, broader access to
finance, improved public services, logistical efficiency, useful data
collection, and improved taxation systems.

1.2 Problem Formulation

1. How can we take advantage of the opportunities created by digital
transformation for sustainable economic growth?
2. How to manage the negative impacts and solve the challenges
caused by the digital economic transformation?

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1.3 Objectives
1. To find out how to capitalize on the opportunities created by digital
transformation for sustainable economic growth
2. To know how to manage negative impacts and overcome challenges
caused by digital economic transformation

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 CHAPTER II

LITERATURE REVIEW

2.1 Digital Economy Concept

The digital economy was first introduced by Don Tapscott.
According to Tapscott (Tapscott, 1997). The digital economy is a social
phenomenon that affects the economic system, where the phenomenon is
characterized by the existence of intellectual space, including information,
information access tools, information capacity, and processing a number of
information. . The components of the digital economy were first identified
as the ICT industry, e-commerce activities, and the distribution of digital
goods and services.

Meanwhile, the concept of digital economy, according to

Zimmerman (Zimmerman, 2000), is a concept that is often used to explain
the global impact of the rapid development of information and
communication technology that affects economic conditions, socio-
economic conditions. This concept is a view of the interaction between the
development of innovation and technological advances that have macro and
microeconomic impacts.

2.2 Suistanable Growth

The concept of sustainable growth was introduced in 1977 by Robert
C. Higgins which is widely used as a literature review. This concept aims to
make financial policies for each company in accordance with the company's
growth (Indarti, 2021).

In theory, Higgins (1977:7) defines that a sustainable growth rate

describes a concept or idea of growth that requires capital using internal
financing under unchanging resource conditions. This concept is useful as
an evaluation of alternatives and to ensure that the financial, operating, and

4
 growth strategies adopted are internally consistent, however, as a final
decision policy and its implementation belongs to management.

According to Priyanto & Robiyanto (2020), sustainable growth rate

is a multifaceted metric that can be divided into separate components that
reflect the policies of cost containment ability (net profit margin), company
retention (retention rate), financing strategy (financial leverage), and asset
utilization efficiency (assets turnover) which are all key determinants of
company performance.

2.3 The Connection Between The Digital Economy And Sustainable

Growth
Fillianingsih Hendarta, Deputy Governor of Bank Indonesia, stated
that the digital economy and finance have great potential for inclusive
economic growth in Indonesia. If managed well, digital innovation can
become a new source of prosperity. Indonesia has the advantage of a large
number of internet users and a relatively young population. To harness this
potential of digitalization, it is necessary to expand digital infrastructure
such as access to electricity, high-speed internet, and affordable
smartphones, so that everyone can benefit. (Yolanda, 2023).

5
 CHAPTER III

RESEARCH METHODS

3.1 Data Collection Method

In this study, a qualitative approach research method was used using
data analysis through literature studies. The qualitative approach was
chosen because this research aims to gain an understanding and explanation
of complex and diverse phenomena from the point of view of the subjects
involved in the study. Qualitative approaches are usually used in social and
humanities research, such as anthropology, sociology, psychology, and
education. In a qualitative approach, researchers seek to explore the
subject's perspective, understand the social and cultural context that
influences the phenomenon under study, and develop new theories or
deepen existing theories. After collecting data from the available literature,
the data is then analyzed through a series of processes, namely
classification, grouping, and interpretation of data. The literature sources
used in this study include both published and unpublished papers. Because
the researcher has limited access to the subjects involved in the phenomenon
under study, the data analysis was carried out using literature studies.

3.2 Data Processing and Analysis Methods

Data will be collected from various literature sources such as books,
journals, articles, and other documents relevant to the phenomenon under
study. The literature search is conducted using keywords and research topics
that are in accordance with the research objectives. Relevant literature
sources are then identified through online databases, libraries, or through
communication with experts in relevant fields. After selecting appropriate
literature, an evaluation was conducted to assess the reliability and
credibility of the literature sources used. This evaluation includes aspects
such as the quality of the methodology, the accuracy of the data and the
precision of the analysis. After evaluation, data can be extracted from the
literature and analyzed using data analysis techniques appropriate to the

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research objectives. The analysis process may involve data coding, data
categorization, and theme development.

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 CHAPTER IV

RESULTS AND DISCUSSION

The development of the Internet is considered one of the biggest innovations

of the last thirty years. Since the early 1990s, the Internet has exerted significant
influence and brought about major changes in many areas, including the economy,
politics, and society. As a result, business processes changed, computerization was
implemented, and digitalization was implemented in the 1990s (Roblek et al.,
2020). In the next development, there was a major change in the industry called the
Industrial Revolution 4.0, where the relationship between the Internet of Things and
physical computer systems was connected using a combination of software,
sensors, processors and communication technology to create something that could
increase the value of the production process through the ability to store and capture
information (Hendarsyah et al., n.d.). Current issues focus on digital transformation
through advances in artificial intelligence and machine learning (Malik et al., 2022).

The development of the digital economy today also creates opportunities

and challenges that must be faced.

4.1 Digital Economy Transformation Opportunities For Sustainable

Economic Growth
The transformation of the digital economy brings many
opportunities for sustainable growth to various economic sectors.
Here are some of the opportunities that arise from the transformation of the
digital economy:
1) Increased efficiency: Digitalization of business processes allows
companies to improve operational efficiency. This includes
automating routine tasks, using data analytics to make better
decisions, and using technologies such as the Internet of Things
(IoT) to optimize supply chain and inventory management. These
efficiency improvements can reduce resource and energy wastage,
thereby promoting sustainable growth.

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2) Fostering innovation: The transformation of the digital economy
gives businesses better access to data and analytical resources. This
can be used to develop more sustainable product and service
innovations, such as green technology solutions that reduce
environmental impact.
3) Access to global markets: The internet makes it easier for small and
medium-sized enterprises to sell their products in the global market.
This opens up new opportunities for business growth and
international expansion.
4) Sharing Economy: Sharing business models such as car-sharing,
home-sharing and shared workspaces can reduce the amount of
resources required by society. For example, if more people share
cars through ride-sharing services, private car use and carbon
emissions may decrease.
5) Education and Skills: Digitalization offers better access to online
education and training. This allows more people to acquire skills
relevant to the future job market, supporting sustainable economic
growth.
6) Better Resource Management: Technologies such as the Internet of
Things can be used to monitor and manage natural resources more
efficiently. An example is the use of sensors to monitor water and
energy used in agriculture or industry.
7) Digital Entrepreneurship: The transformation of the digital economy
enables easier and more affordable entrepreneurship. This can lead
to new innovations, including sustainable solutions related to
renewable energy, waste management, and sustainable
transportation.
8) Sustainable infrastructure development: Increased investment in
digital infrastructure such as fast and stable internet can support
sustainable growth by enabling many sectors of the economy to
operate more efficiently.

9
 9) Environmental monitoring: Digital technologies enable better
environmental monitoring. This can contribute to environmental
management, climate change detection, and conservation efforts.
10) Business model changes: Digitalization enables changes towards
more sustainable business models, such as subscription sales of
products, more efficient use of resources, and a sharing-based
economy.
4.2 How To Take Opportunities To Achieve Sustainable Global Growth
Taking advantage of the opportunities offered by digital economic
transformation for sustainable economic growth requires the right strategies
and actions. Here are some ways to take advantage of these opportunities:
1) Invest in sustainable technologies: Focus on investing in
technologies that support sustainable growth, such as renewable
energy, energy efficiency, waste management technologies, and
sustainable transportation. Businesses and governments can offer
incentives and support to companies that innovate in these sectors.
2) Education and training: Promote education and training in digital
and sustainable technologies. This could include digital skills
training programs, renewable energy courses, and sustainability-
related certifications. This will create a workforce that is ready to
meet the challenges and opportunities.
3) Strategic partnerships: Build strategic partnerships between the
public, private and academic sectors to drive sustainable innovation.
For example, technology companies can partner with research
institutions and governments to develop sustainable solutions.
4) Encourage sustainable digital entrepreneurship: Encourage digital
entrepreneurship that focuses on sustainable solutions.
Governments and financial institutions can provide financial
support, market access and network access to businesses focused on
sustainable solutions.
5) Enhance data availability: Encourage the availability of data related
to the environment and sustainability. This can help businesses and

10
 governments make better decisions and plan for sustainable growth
more effectively.
6) Supporting regulations: Develop regulations to support innovation
and investment in sustainable technologies. This can include fiscal
incentives, strict environmental rules, and regulations that
encourage sustainability reporting.
7) Sustainable Business Model Development: Develop sustainable
business models with a focus on circularity, more efficient resource
use, and waste reduction. Examples of sustainable business models
include subscription sales, resource sharing, and local production.
8) Risk Management: Understand and manage risks related to digital
transformation and sustainability. This includes data protection,
cybersecurity and environmental risk mitigation.
9) Public awareness: Raise public awareness of sustainability issues
and how to use digital technology to support sustainable growth.
Public information and education campaigns can contribute to this.
10) Monitoring and evaluation: Continuously monitor and evaluate the
impact of implemented sustainable development efforts. This helps
measure progress and make improvements if necessary.

Sustainable economic growth requires long-term commitment and

cross-sector collaboration. By integrating digital technology with
sustainability, we can create a stronger, more efficient and environmentally
friendly economy.

4.3 Challenges And How To Solve Challenges Created By The

Development Of Digital Economic Transformation
The challenges to achieving sustainable economic growth are
complex and involve many factors. Some of the main challenges and ways
to overcome them are:
1) Overexploitation of natural resources:

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 Challenge: Overexploitation of natural resources can threaten the
environment and reduce resource availability essential for long-
term economic growth.
How to solve the problem: Implement policies to sustainably
manage natural resources, reduce carbon emissions and promote
renewable energy.
2) Economic inequality:
Challenge: Economic inequality can weaken social and political
stability.
How to solve the problem: Implement policies that promote
economic and social inclusion, such as better education, fair taxes,
and worker protections.
3) Climate change:
Challenge: Climate change can negatively impact economic growth
and threaten the environment.
The fix: Reduce carbon emissions through renewable energy,
energy efficiency and adapting the economy to climate change.
4) Dependence on Fossil Energy Sources:
Challenges: Dependence on fossil fuels can lead to price
fluctuations and reliance on finite resources.
How to Address: Diversify energy sources with a focus on
renewable energy and clean technology.
5) Rising Population:
Challenge: Rapid population growth can disrupt ecosystems and
cause pressure on resources.
How to Address: Implement family planning policies, improve
access to healthcare and education.
6) Technology and Innovation:
Challenges: Technological advances can create inequalities if not
everyone can access their benefits.
How to Address: Ensure more equitable access to technology and
encourage sustainable innovation.

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 7) Global Economic Uncertainty:
Challenges: Global economic uncertainty can affect a country's
economic growth.
How to Address: Diversify the economy, create fiscal reserves, and
build international cooperation to overcome uncertainty.
8) Education and Skills:
Challenges: Skills that lack relevance to the job market can hinder
economic growth.
How to Address: Invest in education and training that matches labor
market needs.

Addressing these challenges requires collaboration between the

government, private sector and civil society to achieve sustainable
economic growth.

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 CHAPTER V

CLOSING

5.1 Conclusion
The transformation of the digital economy opens up significant
sustainable opportunities for various sectors of the economy. The ten
opportunities described include efficiency improvements, sustainable
innovation, global market access, sharing business models, education and
skills, better resource management, digital entrepreneurship, sustainable
infrastructure development, environmental monitoring, and business model
changes towards sustainability.
To capitalize on these opportunities and achieve sustainable
economic growth, some of the strategies that need to be undertaken are:
1. Investing in sustainable technologies such as renewable energy and
energy efficiency.
2. Promoting education and training in digital and sustainable
technologies.
3. Building strategic partnerships between the public, private and
academic sectors to drive sustainable innovation.
4. Supporting digital entrepreneurs who focus on sustainable solutions.
5. Improve the availability of data related to the environment and
sustainability.
6. Develop regulations that support innovation and investment in
sustainable technologies.
7. Develop sustainable business models that focus on resource
efficiency.
8. Manage risks associated with digital transformation and
sustainability, including data protection, cybersecurity, and environmental
risk mitigation.
9. Increase public awareness of sustainability issues.

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 10. Continuously monitor and evaluate the impact of implemented
sustainable development efforts.

The challenges facing sustainable economic growth are complex and

involve many factors. Some of the key challenges include overuse of natural
resources, economic inequality, climate change, dependence on fossil
energy sources, rapid population growth, inequality in access to technology,
global economic uncertainty, and lack of relevance of skills to labor market
needs.

To address these challenges, appropriate actions and policies are

needed, such as sustainable management of natural resources, policies that
promote social and economic inclusion, reduction of carbon emissions
through renewable energy and energy efficiency, diversification of energy
sources, control of population growth through family planning policies,
improved access to healthcare and education, and efforts to ensure
technology and innovation are more equitable. Collaboration between the
government, private sector, and civil society is necessary to achieve
sustainable economic growth.

5.2 Suggestions
1. Invest in sustainable technologies such as renewable energy and
waste management. Government initiatives and private sector
support can drive innovation in these sectors.
2. Focus on education and training in digital and sustainable
technologies to create a workforce ready for future challenges.
3. Build strategic partnerships between the public, private and
academic sectors to drive sustainable innovation.
4. Support digital entrepreneurship focused on sustainable solutions by
providing financial support and market access.
5. Promote the availability of environmental and sustainability-related
data to support better decision-making.

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 REFERENCES

Bangsawan, G. (2023). Kebijakan Akselerasi Transformasi Digital di Indonesia:

Peluang dan Tantangan untuk Pengembangan Ekonomi Kreatif. Jurnal Studi
Kebijakan Publik , 31-33.

Higgins, R. C. (1977). Financial Management: Theory and Applicatons. USA:

Science Research Associates.

Setiawan, A. B. (2018). Revolusi Bisnis Berbasis Platform Sebagai Penggerak

Ekonomi Digital Di Indonesia. Puslitbang APTIKA & IKP , 64-65.

Tapscott, D. (1997). The digital economy: promise and peril in the age of
networked intelligence. New York: McGraw-Hill.

Yolanda, F. (2023). BI: Ekonomi dan Keuangan Digital Jadi Kunci Pertumbuhan
Berkelanjutan. Jakarta: REPUBLIKA.

Zimmerman, H.-D. (2000). Understanding the Digital Economy: Challengers for

New Business Models. AMCIS 2000 Proceedings, (p. 402).

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