Digitalization, AI Adoption, and MSME Productivity: An Ibn Khaldunian Perspective
Feriandy Feriandy · Share Jurnal Ekonomi dan Keuangan Islam · 3 Jun 2026
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Where this sits in the debate
- Will AI actually boost productivity and growth? · its finding: it depends (why studies differ)
Direction of the finding as read from the abstract by an AI model (AI-written).
Key takeaway AI-written
Using Indonesian provincial panel data for 2020-2023 and fixed-effects models, the study finds digitalization has a positive, significant effect on small-business labor productivity while AI adoption shows no measurable productivity gain yet. Religiosity marginally weakens the digitalization-productivity link, which the authors read as transitional adaptation friction.
Abstract
Micro, Small, and Medium Enterprises (MSMEs) in Indonesia face persistent challenges in improving labor productivity amid rapid digital transformation and the expansion of artificial intelligence (AI). Although digitalization has increased substantially, its productivity effects remain uneven across provinces and are influenced by institutional, cultural, and religious contexts. Grounded in Ibn Khaldun’s concepts of asabiyyah and tadbir al-‘umran, this study examines the relationship between digitalization, AI adoption, and MSME labor productivity while assessing the moderating role of religiosity. The study employs an explanatory quantitative approach using provincial-level panel data during 2020–2023. The primary estimation uses a fixed-effects model with robust standard errors, complemented by exploratory analyses using Double Machine Learning, Causal Forest, and XGBoost. The findings show that digitalization has a positive and significant effect on labor productivity, whereas AI adoption has not yet generated measurable productivity gains. Religiosity marginally weakens the relationship between digitalization and productivity, indicating transitional adaptation frictions within highly normative environments rather than resistance to technology. These findings suggest that sustainable productivity gains depend not only on technological adoption, but also on institutional capacity, ethical governance, and collective learning mechanisms. The study contributes to the digital transformation literature by extending Ibn Khaldun’s institutional perspective and offers policy insights for strengthening sustainable MSME digital ecosystems in Indonesia. ABSTRAK - Digitalisasi, Adopsi AI, dan Produktivitas UMKM: Perspektif Ibn Khaldun. Usaha Mikro, Kecil, dan Menengah (UMKM) di Indonesia menghadapi tantangan dalam meningkatkan produktivitas tenaga kerja di tengah percepatan transformasi digital dan perkembangan kecerdasan buatan (artificial intelligence/AI). Meskipun digital
About this publication
Academic journal. Published in an academic journal — typically peer-reviewed before publication, though indexing alone doesn't guarantee review depth.
- Published
- 2026 (5 months ago)
- Citations
- 1 (OpenAlex)
Citations in context
1 citation — 99th percentile among the 162 indexed papers from 2026 in this collection. Citation counts favor older papers; this compares only same-year papers here, not the whole literature.
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