Identification of Latent Dimensions of Digital Readiness and Typology of Districts/Cities in Indonesia Using PCA and K-Means Clustering

Abstract

Digital transformation is a key agenda in Indonesia’s national development that requires balanced readiness across regions. However, the level of digital readiness among districts and cities still varies widely, highlighting the need for a typology that can comprehensively describe existing disparities. This study aims to identify the latent dimensions of digital readiness and to develop a regional typology of Indonesian districts/cities using Principal Component Analysis (PCA) and K-Means clustering. The data were obtained from the 2024 Indonesian Digital Society Index (IMDI), which consists of four pillars—Infrastructure and Ecosystem, Digital Skills, Empowerment, and Employment—with ten sub-pillars. PCA reduced these correlated indicators into two main latent components, namely Digital Capacity and Participation and Digital Infrastructure Foundation, which together explain 70.4% of the total variance. Cluster validation using the Silhouette Score and Davies–Bouldin Index (DBI) showed that K = 2 yielded the best internal validity (Silhouette = 0.402; DBI = 0.906), but a three-cluster configuration (K = 3) was adopted to obtain a more interpretable typology of high-, medium-, and low-readiness regions (Silhouette = 0.346; DBI = 1.007). Spatial mapping reveals that high-readiness districts are concentrated in Java, Bali, and parts of Sumatra, whereas low-readiness areas dominate eastern Indonesia. These findings confirm persistent digital inequality across regions and provide a quantitative basis for targeted policy interventions, including infrastructure development, digital literacy programs, and innovation ecosystem strengthening, to support an inclusive digital transformation in Indonesia.