Measuring Sustainable Economic Welfare at Digital Era

The objectives of Sustainable Development Goals (SDGs) include increasing sustainable use of natural resources as to ensure the welfare of current and future generation as well as to attain the environmental sustainability. Indonesia has long established an index of economic welfare, yet it only measures social, economic and government dimension. Recently, the effect of digitalization era has renewed the demand for welfare indicators and has also made “big data” a promising data source. This study proposes an Indonesia Sustainable Welfare Index (ISWI) method which can measure economic welfare in Indonesia in the digital era and accomplish the objectives of SDGs. Considering the effect of digital era on welfare, it does not only use statistical data from NSO and other related ministries but also explores the Big Data from Google Trends. The Google Trends data is collected by Kofax KapowTM robots. The statistical data and google trends data are then combined and transformed before they are tested by using Structural Equation Modeling (SEM). The result of SEM analysis shows that the growth of current welfare is not followed by the increase of environmental quality. In addition, the changes caused by digitalization and level of people’s expectation to consume have positive effects on welfare. Hence, this new welfare index is more suitable for accommodating environmental quality, consumer expectation, and digital effects. ISWI contains social, economic, government, environmental, digital, and expectation dimension. ISWI is conducted by calculating the proportion of Factor Analysis results in each dimension and is determined by the average value of all the dimensions. The indicators used in ISWI represent Indonesian people and the attempt to achieve welfare in Indonesia. They also accommodate various indicators that are used to evaluate country’s development.