Digital Transformation and the Future of Public Value

Abstract : This study examines technological readiness as a mediator in the relationship between digital transformation and public value, filling an important gap in the literature about causal pathways in developing countries. Combining theories of digital transformation, technological readiness, and public value, the research involved 200 digital service users in Malang City. Bootstrap mediation analysis showed that digital transformation significantly affects public value (β=0.4146, p<0.001), with technological readiness mediating 35.51% of the total effect (ACME=0.1497), while the direct effect remained notable (ADE=0.2650). Results indicate partial mediation, implying that digital transformation adds value through two pathways. The study proposes a dual-pathway model that highlights the importance of investing in both digital infrastructure and user literacy, guiding comprehensive digital policies and broadening understanding of digital transformation in Indonesia’s context, characterized by high technological readiness heterogeneity.