The Role of Digital Based Creative Economy in Promoting Local Economic Development

Abstract

This study examines the role of the digital-based creative economy in promoting local economic development in Makassar City. The research focuses on how digital platform utilization, market expansion, and digital literacy contribute to the economic performance of creative economy actors. A quantitative explanatory survey design was employed, involving 65 creative economy entrepreneurs who had used social media, marketplace platforms, or other digital media for at least one year. Data were collected using a structured questionnaire and analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The findings show that the digital-based creative economy has a positive and significant effect on local economic development. Digital-based creative economy practices also significantly influence market expansion, while market expansion positively affects local economic development. Furthermore, market expansion mediates the relationship between the digital-based creative economy and local economic development. The results also indicate that digital literacy strengthens the effect of the digital-based creative economy on local economic development. These findings suggest that digital transformation enables creative economy actors to increase revenue, expand markets, improve competitiveness, and contribute to employment creation. The study highlights the importance of strengthening digital literacy, digital infrastructure, access to finance, and policy support to enhance the contribution of the creative economy to sustainable local economic development.