GovTech has become a key driver of societal transformation, yet its impact on human well-being and social progress remains complex and potentially non-linear. This study aims to examine how GovTech development, as a “Technological – Institutional – Human” system, shapes social progress by identifying its mechanisms, non-linear dynamics, and structural conditions. The analysis is based on a panel dataset of 1,964 observations for 2003–2024, employing two-way fixed-effects models with Driscoll–Kraay standard errors and non-linear specifications. The results show that the aggregate EGDI has a positive and significant effect on social progress, even after controlling for time effects (β = 3.37, p = 0.036). A non-linear relationship is identified, with a turning point at approximately 0.61, indicating diminishing returns at higher levels of digital development. Component-level analysis reveals that telecommunications infrastructure has the strongest impact (β = 14.09, p < 0.001), followed by online services (β = 4.16, p = 0.002), while human capital exhibits a threshold effect (turning point ≈ 0.26). Additionally, social progress increased steadily until 2020 (β ≈ 6.10) but declined in 2022 (β = 3.04), reflecting global shocks.