Rural transformation and the development of information and communication technologies: Evidence from Indonesia

Abstract

This paper aims to examine the potential interrelationship between the existence of information and communication technologies (ICTs) and rural transformation on the island of Java in Indonesia, a country in the Global South. While the issues of rural digitalization as well as rural transformation have been extensively studied, it remains unclear to what extent the development of ICTs stimulates rural transformation in the Global South. We have employed quantitative methods to test the associations between rural structural transformation and the existence of ICTs by using Potensi Desa (Village Potentials) datasets, which portray development characteristics at the village level. Our findings show that on the one hand, the presence of ICTs increases the likelihood of a village experiencing an economic shift from agriculture to non-agriculture. On the other hand, they show that village structural transformation increases the chance of ICTs being available in the village. Given these results, we see that the presence of ICTs in this context, and possibly in other instances in the Global South, might not yet become a driver of rural structural transformation. As rural areas undergo economic diversification along with improvements in infrastructure and education levels, ICTs develop accordingly.