This study explores the economic impact of the internet connectivity delivered by submarine fiber optic cables (“subsea cables”) on Indonesia. Subsea cables are the global backbone of the internet, connecting people, businesses, and economies around the world. Known for its vibrant ecosystem of gig economy apps like GoJek and Bukalapak, Indonesia has leveraged rapid improvements in internet connectivity into economic growth.
We found that subsea cables have led to a 5.4% increase in GDP per capita between 2012 and 2017, after controlling for such things as technology trends, population characteristics, economic trends, and other important factors. There was a 5.5% increase in services employment over the same period, equivalent to about 4.3 million jobs. Looking back over 1997 to 2017, we found that each 10% increase in Indonesia’s international data consumption per user led to a 0.41% increase in GDP per capita.
Our results underscore the economic development significance of subsea cable landings, international connectivity, and policies and programs that are bringing connectivity beyond the beach across the archipelago.