Universitas Dian Nuswantoro (UDINUS) conducted research on economic development and income inequality in the Kedungsepur strategic area in Central Java Province, Indonesia. The activity examined the transformation of sectoral contributions to gross regional domestic product (GRDP) and assessed the relationship between the manufacturing sector, human development, labor force participation, population, and income inequality. The research used a quantitative approach to test causal relationships between proxy variables of economic development and income inequality.
The study used secondary data obtained from the Central Bureau of Statistics (BPS) Indonesia. Panel data analysis was applied to test relationships among variables related to economic development, while the transformation of sectoral contributions was presented descriptively. The findings show that the transformation of sectoral contributions to GRDP in the Kedungsepur strategic area began in 2010. The manufacturing sector became the dominant contributor to GRDP, replacing the agricultural sector's contribution. This condition indicates that the area had reached a mature stage of growth.
The panel data analysis found that the manufacturing sector's contribution positively affected income inequality. Labor force participation and population growth had significant negative relationships with income inequality. The research therefore identified the need for manufacturing sector contributions to support not only economic growth but also equal income distribution. It also identified human development as a central element of economic development. In relation to the stated goals, the activity addresses economic growth, industry, and reduced inequalities through analysis of sectoral transformation and income distribution. UDINUS presents this research as an institutional contribution to evidence-based discussion of local government policy recommendations concerning economic development and equitable income distribution.