Digitalisation and Rural Livelihood Transformation: Evidence from Indonesia

Abstract

This article examines the extent to which digitalisation transforms rural livelihood in the context of the Global South. We conducted a case study in two villages in Indonesia that represent different digital technologies and rural economies. We found that digitalisation, to a certain degree, encourages changes in rural livelihoods, as it provides opportunities for rural residents to improve their capabilities. However, digital technology is rather used predominantly for social purposes and has thus not yet triggered a major structural transformation in the rural areas. Nevertheless, the more complex nature of digital technology adopted by the community tends to trigger more significant changes in rural livelihoods. It is thus to be expected that with more intensive future use and complex types of digital technologies, digitalisation will significantly influence rural transformation in the Global South.

Keywords

Rural transformation digitalisation rural livelihoods rural community Indonesia

Introduction

Rural transformation in the Global South has generally been typified by a series of parallel changes, including those in agricultural practices, diversifying economies, and the shift from agricultural to non-agricultural sectors, along with the development of infrastructure and changes in socio-cultural conditions (Berdegué et al. 2014; Rigg 2001). Urbanisation coerces the dynamics of land markets in surrounding regions, thereby stimulating changes in agricultural activities in rural areas (Diao et al. 2019; Rigg 2001). As urban-rural linkages have also strengthened due to infrastructure connectivity improvements, the characteristics of the urban environment are exposed to rural areas, which also affects livelihoods and the standard of living in rural areas (Ohlan 2016).

Related to this, digitalisation—referring to the use of digital technologies and the Internet—potentially stimulates further rural transformation. Digitalisation opens up opportunities for trade, the flow of goods and services, jobs, and access to modern lifestyles (Vogelsang 2010). The development of digital technology can partly enhance accessibility in the absence of sufficient physical infrastructure (Malecki 2003; Velaga et al. 2012). It could also change how rural residents perceive their lives and shift their jobs from the agricultural to non-agricultural sectors (Berdegué et al. 2014).

On the other side, digitalisation generates challenges and hardships for rural communities. The ‘digital divide’, the discrepancy between urban and rural areas’ access to digital technologies, has been a dilemma that complicates opportunities for digitalisation (Malecki 2003; Salemink et al. 2017). Besides, some sectors in rural community populations are more vulnerable to digital and social exclusion as they have low access to and ability to use digital technology (Briggeman and Whitacre 2010; Salemink et al. 2017; Whitacre 2008).

Digitalisation in the Global South is on the rise: Internet use growth in developing countries is 27%, over three times the global rate (7.2%). Yet, only 27% of individuals in these countries use the Internet, much less than the global average of 66% (ITU 2023). It is worth noting that in the Global South, low adoption of digital technologies in rural areas not only corresponds to low literacy and skill levels, but also the presumption that the Internet and digital technologies are contradictory to local socio-cultural values (Fahmi and Sari 2020; Tremblay 2018). Along with the increasing role of digital technologies in rural areas, where its dynamic transformation is about to lead is open to question.

One of the approaches to examining the dynamic progress and outcomes of rural transformation, among other things, is the livelihood approach. It has been argued that in the context of change, this approach can be employed to explain the community’s ability to ensure the sustainability of their livelihoods (e.g., Chambers and Conway 1992; Oestreicher et al. 2018; Scoones 2009). While the livelihood approach is generally used in studies of rural transformation, there is still little research explaining the implications of digitalisation for rural livelihoods. Nonetheless, it increasingly has become the main theme of studies of agrarian change and agricultural development (Alarcón 2021). In line with the rising importance and challenges of digital technologies in rural areas, it is important to study this issue explicitly.

This article aims to examine the extent to which digitalisation transforms rural livelihoods in the context of the Global South. Indonesia is a case in point since it represents rural areas’ dynamic transformation, accelerated by rapid urbanisation, structural changes, and, recently, digitalisation (Fahmi and Sari 2020; Firman 2014). This article contributes to the ongoing debate on rural transformation by providing empirical evidence of current trends, namely digitalisation, which would influence the portrait of rural transformation and rural communities’ livelihoods. We thus present two cases of villages that represent differing types of digital technologies in rural economic situations: Kaliabu (the emergence of digital logo designers in an agricultural village) and Kamasan (government-led digitalisation in traditional craft industries). By presenting our findings, we also show the practical implications of stimulating the benefits of digitalisation in rural communities.

Literature Review

There has been rising interest in rural digitalisation, covering various issues related to digital connectivity, inclusion, and their relation to regional and rural development (Salemink et al. 2017). As ‘a macro-strategy for economic transformation’ which stresses ‘rationalisation strategies’ to create a new surplus of consumption, or ‘digital capitalism’ (Staab 2017: 2–3), digitalisation is expected to enforce changes in rural living. Although there is still little research addressing how digitalisation applies to rural transformation, it is believed that digital technology is essential to agrarian change and agricultural development (Alarcón 2021). Changes in agricultural activities and patterns have been referred to as ‘agrarian transition’ or ‘deagrarianisation’, represented by strengthened agricultural diversification, a structural shift from agriculture to non-agriculture, a decreased percentage of labour in farming, intensified occupational plurality, spatial mobility, and rural-urban inter-penetration (Berdegué et al. 2014; Rigg 2001). In the Global South, urbanisation sparks changes in agricultural activities due to an increasing and changing food demand as well as in land use, land markets, and market linkages, thereby influencing livelihoods and rural communities’ standard of living (Diao et al. 2019).

Although rural areas have more limited access to digital technologies than developed countries, many countries in the Global South are currently experiencing increasing growth in their digital economies (Bukht and Heeks 2017). This is possible due to advances in the Internet and digital technology and a decline in the prices of information and communication technology (ICT) goods. These greatly impact their economic adoption, production, and spillover (Vogelsang 2010). In this respect, one may expect that digitalisation could accelerate urban-rural transitions and changes in agricultural activities.

Digital economies that develop in the Global South, including those in rural areas, can be categorised into three scopes (Bukht and Heeks 2017): the core scope (the digital sector, that is engaged in the procurement of digital goods or services), the narrow scope (the digital economy, whose economic output is dependent on digital technology), and the broad scope (a digitalised economy, which reflects the use of ICTs in all fields). It is to be expected that in rural areas, a broad scope of the digital economy (e.g., e-commerce) would be more widely represented than the narrow or core scopes of it, given its complexity and the lower levels of digital literacy and skills evident in rural communities. As explained earlier, digitalisation can deliver benefits for rural communities, who suffer from economic and social disadvantages due to distance and remoteness (Townsend et al. 2013). Nevertheless, this premise is still contested in the Global South context, in which digitalisation is sometimes seen as contradictory to socio-cultural values (e.g., Tremblay 2018).

In addressing this issue, we need to analyse the transformation of livelihoods as an implication of rural digitalisation. The livelihood approach is one of the critical approaches to understanding urban-rural transitions and rural development, although its popularity has declined as it fails to engage with the economic globalisation process (Scoones 2009). Chambers and Conway (1992) developed a ‘sustainable rural livelihood’ framework that has been employed to examine livelihoods. In this framework, livelihood consists of the capabilities, assets, and activities necessary for a means of living. Livelihood sustainability is related to its ability to deal with and recover from shocks and stresses and maintain and improve its capabilities and assets, without undermining natural resources (Chambers and Conway 1992; Scoones 2009). Lax and Krug (2013) further enhance this structure by introducing the essential forms of capital supporting the capabilities, assets, and activities comprising the ‘sustainable livelihood framework’. These include human capital, social capital, physical capital, natural capital, and financial capital. In this framework, human capital describes livelihood capability, while the terms of physical, natural, and financial capital describe livelihood assets. Social capital is a description of livelihood activities (Lax and Krug 2013).

The livelihood approach has been used in studies of both urban and rural development. Satterthwaite and Tacoli (2003) explain the differences between rural and urban livelihoods, namely in natural capital, land access, governance, access to infrastructure and services, employment opportunities, main assets, and regional characteristics. In this regard, it is important to consider the specific contexts of rural areas in examining livelihood transformation. Thus, we consider the variables that should be used to examine digitalisation’s implications for livelihood changes in rural areas.

Capability can be defined as the ability to do or to become something to make ends meet (Chambers and Conway 1992). Capabilities are both goals and means: livelihood provides support for upgrading and training capabilities (as a livelihood goal), and capabilities also enable livelihood to be obtained (as a means of living) (Chambers and Conway 1992). Livelihood capability consists of the ability to earn a living, including coping with stress and shocks, adapting dynamically, and exploring and taking advantage of opportunities (Chambers and Conway 1992). This can be interpreted as the human ability to perform work or an activity, measured through knowledge, expertise, and health (physical and mental). Digital technology is also shown to benefit people if they recognise its benefits (Malecki 2003; Salemink et al. 2017).

As discussed earlier, digitalisation facilitates information dissemination and communication by increasing ease of access to knowledge and skills, potentially increasing rural communities’ capabilities (Salemink et al. 2017). However, those with low levels of education and literacy, who have little experience in using ICTs might face difficulties in improving their capability and are thus probably vulnerable to exclusion from digital development (Michailidis et al. 2011; Salemink et al. 2017). In this regard, it is expected that digitalisation will improve livelihood capability, especially related to new knowledge and skills, but might not directly affect other aspects of capability which are not directly influenced by the presence of digital technologies.

Livelihood assets can be divided into tangible and intangible assets (Chambers and Conway 1992). Tangible assets consist of stores and resources, where storage consists of food stocks, valuables (such as jewellery, woven textiles), savings, and resources consisting of natural resources (such as land, water, trees, livestock), agricultural tools, and household tools (Chambers and Conway 1992). Meanwhile, intangible assets consist of claims and access. The term, claims, in this case, encompasses demands and appeals made for material, moral, or other practical support/access based on a combination of rights, precedents, social conventions, moral obligations, and power. Access is defined as the opportunity to use resources, supplies/savings, or services or to obtain information, materials, technology, employment, food, or income (Chambers and Conway 1992). Since digitalisation is a macro-strategy that focuses on making profits (Staab 2017), it is to be expected that digital technology use poses an opportunity to enhance income and other assets, such as valuable stocks and savings (Chambers and Conway 1992; Scoones 2009).

Activities can be defined as those carried out in life, such as engaging in work, travel, and hobbies (Chambers and Conway 1992). One of the important questions of rural digitalisation is the extent to which digital technology use will change such activities, including shifting from a main economic activity such as agriculture. It is to be expected that digital technology use will also transform social relationships. Studies have examined the extent to which the knowledge, skills, and aspirations related to using digital technology determine the degree of social inclusion (see Salemink et al. 2017). Using digital technologies will allow rural residents to recognise the benefits of these technologies in their daily lives and become involved in community life and innovation processes (Salemink et al. 2017). Nevertheless, previous studies have also found that the development of digital technologies could make some community groups more vulnerable to digital and social exclusion (e.g., Briggeman and Whitacre 2010; Michailidis et al. 2011; Salemink et al. 2017).

To sum up, digitalisation shall improve the livelihoods of rural communities either directly or indirectly. Nevertheless, digitalisation also poses challenges for vulnerable groups in rural areas who might not automatically benefit from digital developments. In this regard, empirical analyses are needed to prove this premise.

Methodology

We conducted a double case study approach to reflect how differing main economic activities and socio-cultural characteristics influence the implication of digitalisation for rural livelihoods. The first case is that of Kaliabu Village in Magelang, Central Java, which represents an agricultural village experiencing digitalisation as indicated by the presence of logo designers. The second case is that of Kamasan Village in Klungkung, Bali, which represents digitalisation in a non-agricultural village specialising in traditional crafts. By comparing the two cases, we can validate potentially contrasting results and use them to build conceptual arguments (Yin 2014). As we aim to measure the extent to which livelihoods have transformed due to digitalisation, quantitative research methods are appropriate to test the hypothesis, in which these variables can be measured as numbered instruments and analysed using statistical procedures (Creswell, 2009).

Data Collection

The data in this study were primarily collected by distributing questionnaires to local inhabitants in the two villages using probability sampling. The surveys asked people to reflect on and state their conditions before and after digitalisation in their village to measure livelihood transformation. Considering the different natures of their digitalisation and socio-economic conditions, questionnaires were designed differently for each village. However, their structure similarly consisted of basic information about the respondents and their livelihood conditions before and after village digitalisation (i.e., capabilities, assets, and activities). The events marking digitalisation also started differently (see each case’s overview in the following two sections). In Kaliabu, digitalisation in the village was indicated by the presence of logo designers in 2014, while in Kamasan, it was shown by the 2016 adoption of e-commerce/social commerce through government assistance. The surveys were conducted in late 2018 in Kaliabu and early 2020 in Kamasan so that they show similar medium-term changes (about four years). The surveys asked the respondents to compare their livelihood conditions before and after digital technology adoption: whether they experienced better, worse, or the same condition. One might argue that this approach would generate distortion. We anticipated this issue by conducting a systematic recall of year-by-year memories so that the evaluation before and after digitalisation represents the respondents’ complete accounting of their livelihoods (Land et al. 2012).

Considering our limited resources, we identified samples for a 90% confidence level in both cases, thereby requiring a minimum of 94 respondents in Kaliabu and 100 respondents in Kamasan. For the survey, defining the sample was somewhat problematic. Although the population size was known (4,123 inhabitants in Kaliabu Village and 4290 inhabitants in Kamasan Village), a list of population members was unavailable. To ensure the sample’s random distribution, a multi-stage clustered random sampling method was used so that each population member had the same opportunity of inclusion in the sample. This technique is appropriate when it is impossible to compile a complete list of the elements that make up the population. Individuals were selected by considering the number and distribution of houses in the village—that is, the number of respondents was calculated proportionally to the number of houses in each sub-village (dusun).

Nevertheless, different techniques were implemented in the cases due to differences in the geographical distribution of housing in both case studies. In Kaliabu Village, each house has its own yard and entrance, so it was possible to identify the respondents as explained before. In each Kaliabu sub-village, respondents were selected by counting and picking a house as a sample at a consistent interval. This technique could not be applied in Kamasan, as in its Hindu-Bali tradition, a housing entrance reflects a family temple (pura) surrounded by five to seven separate buildings and households. Simultaneously, there is no data on the number of houses in each sub-village. It was not possible to select respondents using a consistent interval as in Kaliabu. Considering these characteristics, we took a proportion of samples in each respective sub-village and distributed the questionnaires randomly (using a random number generator), which resulted in about one respondent in each family temple. It is important to note that the person who filled out the questionnaire in each house reflected their position within the household. As such, our analysis also represents livelihoods on the family level.

Data Analysis

As we have gathered data using probability sampling, we can estimate the parameters of livelihood changes at the population (village) level (see Healey 2016). In this estimation, the margin of error is calculated based on the confidence level mentioned above 90%). In addition to this basic estimation, we also checked whether livelihood changes are associated with certain community groups, especially those involved directly in digitalisation. In the Kamasan case, we also checked whether there is a difference in livelihood changes between crafters that serve religious purposes and general purposes (see Overview). As the variables are nominal in the measurement scale, we conduct simple Chi-square tests to check the relationship between changes in livelihood and the presence of family members who are directly involved in the use of digital technology. Cramer’s V statistics were calculated to determine the strength of the association, in which value > 0.5 means a high association, a value between 0.3 and 0.5 means a moderate association, and a value less than 0.3 means a low association (Healey 2016).

The Kaliabu Case: Digital Logo Designers in an Agricultural Village

Overview

Kaliabu is a village located in the Salaman subdistrict, Magelang, Central Java Province (about 550 km from the national capital Jakarta). The geographical condition of Kaliabu Village is uneven, up and down with winding roads, and the topography is in the form of slopes. In 2016 its population consisted of 4,085 people, including 2,086 males and 1,999 females, grouped in 1,273 families. Most people in Kaliabu finished elementary school, with a percentage of 29% of the total population, followed by 23% of people who completed junior high school and 20% who finished high school. More than half of the population worked in the agricultural sector, either as farmers or agricultural labourers (Fahmi and Sari 2020).

Kaliabu was an agricultural village until the Internet came into the village at the beginning of the 2010s, transforming the village livelihood. Internet penetration, particularly through an Internet kiosk (warnet) in the village, enabled the residents to be exposed to new knowledge, including logo design. In 2011 12 young village residents in their 20s came across an international logo design competition. They gathered in one of their houses which functioned as a ‘base camp’, where they learned about logo design and later pioneered logo design activity in the village. Most of them are men, only completed junior high school, and previously did odd jobs, such as coconut pickers, bricklayers, and furniture polishers, with daily earning around IDR 20,000 to 4000 (USD 1.3–2.6) (Rina 2016). As they had no formal training or basic skills in design—and limited access to computer equipment, such collective learning was needed to overcome limitations together (Fahmi and Arifianto 2021). They practiced using design software in a group with only one laptop day and night. They also participated in international logo design competitions and won some prizes. This success attracted other village residents to become involved in logo design activities. Then some associations (e.g., Rewo-Rewo, SDC) were formed as settings for knowledge sharing about developing design skills, joining logo competitions, and dealing with international customers. Until 2018, the associations gathered about 200 people who became logo designers as a second job or even as a main job. This made the village known as the ‘Designer Village’. It is worth noting that the development of logo design in the village has been dynamic. The logo design communities have faced various challenges, including: (a) limited market expansion due to lack of formal design education, and (b) language barriers in English affecting communication with global customers. As the international competition became very stiff, not everybody could survive and, in the end, left the activity. Although many no longer work in logo design, it is interesting that they have become knowledgeable about digitalisation and get new jobs in other sectors (Fahmi and Sari 2020).

Below we present the result of our analysis of livelihood transformation after digitalisation in Kaliabu, that is, the emergence of logo design around 2014 (see Table 1). Out of 94 respondents, 63% work as logo designers, 16% as traders, 11% as labourers, and the rest have diverse occupations. As livelihood changes might correlate with those directly involved in the logo design activities, we compare changes between community groups with or without logo designers in their households (Table 2).

Table 1.

General Results of Livelihood Transformation in Kaliabu (2014–2018).

As Digital Technology was Adopted in the Village (ca. 2014), I feel that ….	Estimation of Population Characteristics
Capability
I can better use digital tools and access.	85.11% ± 8.5%
I have better knowledge and skills.	46.81% ± 8.5%
My health condition is better.	7.45% ± 8.5%
Asset
My income has increased.	24.475% ± 8.5%
I can better fulfil my needs.	44.68% ± 8.5%
Activity
I have a different job/occupation.	12.77% ± 8.5%
I participated in logo designs as a main or part-time job.	15.00% ± 8.5%
I have more leisure time.	13.83% ± 8.5%
I have better social interaction.	17.02% ± 8.5%
I trust people around me more.	22.34% ± 8.5%
I have more conflicts with people around me.	5.32% ± 8.5%

Table 2.

Association Between Livelihood Transformation and the Presence of Logo Designers in Kaliabu Households.

Livelihood Components	Chi-square Test						Cramer’s V	Pr
	H_a: There is a Relationship Between these Variables and the Presence of Designers in the Family.
	Any Family Member is a Designer (n = 40).			None of the Family Members is a Designer (n = 54).
	Experiencing Better Changes	Not Experiencing Changes	Experiencing Worse Changes	Experiencing Changes	Not Experiencing Changes	Experiencing Worse Changes
Capability
Digital tools and access	40	.	.	40	14	.	0.36	0.000
Knowledge and skills	28	12	.	16	38	.	0.4	0.000
Health condition	5	28	7	2	51	1	0.3363	0.005
Asset
Income	21	19	.	2	52	.	0.5612	0.000
Ease of fulfilling needs	34	6	.	8	46	.	0.698	0.000
Activity
Job/occupation	10	30	.	2	52	.	0.3155	0.002
Leisure time	12	21	7	1	52	1	0.5203	0.000
Social interaction	11	22	7	5	43	1	0.3108	0.011
Trust	14	26	.	7	47	.	0.2616	0.011
Social conflicts	3	34	3	1	51	2	0.1654	0.276

Capability Component

As seen in Table 1, our survey shows that most Kaliabu village residents experienced increased capability, particularly related to using digital tools and access (85% ± 8.5%). This can be explained as most people in Kaliabu have a mobile phone and fairly good Internet signal that can simplify communication. It also appears that the ability to access digital technology in the village provides additional knowledge and expertise to the village community, or at least a portion of village residents (45% ± 8.5%). Kaliabu residents can access information and communication, which is mainly done through mobile phones and the Internet. It can also be seen from the data that some people in Kaliabu use technology tools and experience better technology access (see Table 1). The ability to access digital technology in the village provides additional knowledge for some village residents (45% ± 8.5%). However, it turns out that most of the people in Kaliabu do not feel a change in the incidence of health conditions because of digitalisation. This is also understandable since the development of digital technology does not directly affect access to health services.

We check whether this result is biased by the presence of a logo designer in the family (see Table 2). Our findings show moderate associations between the presence of logo designers in families and changes in capabilities related to digital tool use, knowledge, and skills. In other words, families with logo designers tend to experience improvements in livelihood capabilities in Kaliabu. This is understandable since they were directly exposed to digital technology, so they had opportunities to learn (Fahmi and Arifianto 2021; Salemink et al. 2017; Whitacre 2008). Further, this analysis strengthens the findings that digitalisation does not directly trigger health improvement, as family groups with and without logo designers tend not to have experienced an increase in health conditions.

Asset Component

We examine changes in livelihood assets in Kaliabu (see Table 1). The result shows that only a relatively small proportion of the village community increased their income after digitalisation (24.475% ± 8.5%). This indicates that digitalisation, to a certain degree, stimulates income improvement for those directly involved in digitalisation. Although income did not significantly increase, a larger proportion of the community felt that they could better fulfil their needs (44.68% ± 8.5%). This suggests income is not the sole factor for fulfilling community needs. Similar to prior studies, Kaliabu reflects a Javanese society where income does not consistently link with overall satisfaction and happiness (Fahmi and Sari 2020).

Our result also shows strong, significant associations between the presence of logo designers in a household and improvement in household income, as well as the ease of fulfilling household members’ needs (Table 2). This indicates that livelihood-assets improvement tends to be more likely in families, including logo designers directly involved in digitalisation. This also infers that although digital technology poses opportunities to improve digital knowledge and skills, its benefits tend to be direct to those who use it properly (Briggeman and Whitacre 2010; Fahmi and Savira 2023).

Activity Component

Our analysis shows a change in livelihood activities, although it is not to a large extent (see Table 1). A small proportion of the community (12.77% ± 8.5%) came to have different jobs as digital technology was adopted in the village. With the emergence of logo design activities, part of the community was involved in related main or part-time jobs (15% ± 8.5%). These proportions show that the emergence of logo design does not completely shift the dominance of agriculture, but it has clearly stimulated economic diversification. Our survey also shows that below 20% of the community feels that there has been a change in leisure time and social interactions. Interestingly, over 20% of the community feel that they could trust their neighbours better (22.34% ± 8.5%), and most do not perceive more conflicts (5.32% ± 8.5%).

Our result also shows that families with logo designers have more leisure time since digital jobs emerged in the village (Table 2). This is understandable since, with this digital-based job, they can work more flexibly to have time with family (see Fahmi and Sari 2020). Unlike those related to other components, changes in activities are not strongly related to households with logo designers, especially concerning social interaction, trust, and conflict. This means that there are no significant differences in social interaction felt by the community regardless of the household presence of logo designers.

The Kamasan Case: Digitalisation in Non-agricultural (Traditional Craft) Village

Overview

Kamasan is a 2.49 km² village located in Klungkung District, Bali Province (31 km from Denpasar). Geographically, Kamasan is a lowland village and consists of four administrative hamlets, of each is divided into two-three banjars (traditional villages). In 2018 Kamasan Village was occupied by 4,290 people with a ratio of 2,124 male and 2,166 female, or 1049 families. Most of the people in Kamasan have graduated from the high school level (27% of the total population) and work as entrepreneurs (44% of the working population).

Tracing its history, Kamasan was a home for craftsmen (orang pande) who fulfilled the needs of the Klungkung Kingdom. The crafting skills are usually passed down across generations within home industries in each household. Since 2016, the Internet started aiding Kamasan’s craft sector via the government’s ‘creative house’ initiative. This program offers training, support, and shared information among crafters (Fahmi and Savira 2023). However, its effectiveness is limited by the absence of a consistent activity schedule. Our survey reveals that of 100 respondents, 41% work as crafters, 14% as traders, 11% as private employees, 12% as unemployed, and the rest have diverse occupations. Of digital tech-using crafters 77% are men, while the majority of respondents (66%) are also men. The digital technology used in this context included WhatsApp and social media (Instagram and Facebook), which were adopted to facilitate product marketing and distribution. Despite its long-standing existence, the Kamasan industry has faced difficulties in expanding markets for its products and making efficient use of ICT for both production and marketing. The handicrafts mainly produced in Kamasan Village are metal products (i.e., gold, silver, brass) needed to support the religious activities of the Hindu community. Nevertheless, other handicraft products, namely wayang paintings and woven fabrics, have a wider market segment. In this type of craft, digital technology is expected to be more important, as they need to market their products not only to the local people. In this respect, in our analysis, we should pay attention not only to the potential difference in livelihood changes between village residents who adopted and did not adopt digital technology (Table 3). We should also pay attention to the different implications of the types of crafts (Table 4).

Table 3.

Association Between Livelihood Transformation and Digital Technology use in Kamasan.

Livelihood Components	Chi-square Test
	H_a: There is a Relationship Between these Variables and the use of Digital Tools in the Household.
	Community Using Digital Tools (n = 38)			Community not Using Digital Tools (n = 62)			Cramer’s V	Pr
	Experiencing Better Changes	Not Experiencing Changes	Experiencing Worse Changes	Experiencing Better Changes	Not Experiencing Changes	Experiencing Worse Changes	Cramer’s V	Pr
Capability
Digital tools	1	37	.	1	59	2	0.081	0.722
Internet signal	2	36	.	4	57	1	0.083	0.709
Knowledge and skills	37	1	.	17	45	.	0.681	0.000
Health condition	8	26	4	15	44	3	0.110	0.546
Asset
Income	1	35	2	7	52	3	0.155	0.301
Ease of fulfilling needs	33	5	.	38	24	.	0.273	0.006
Savings	14	22	2	7	53	2	0.316	0.007
House	7	31	.	3	59	.	0.220	0.028
Vehicle	10	28	.	6	56	.	0.220	0.028
Jewellery or valuable things	5	33	.	2	58	2	0.216	0.097
Land	.	38	.	1	61	.	–0.079	0.431
Sanitation facility	.	38	.	3	59	.	–0.138	0.169
Transportation facility	6	31	1	7	53	2	0.066	0.804
Education facility	7	31	.	4	58	.	0.186	0.063
Health facility	6	32	.	4	58	.	0.151	0.131
Market place	4	32	2	10	52	.	0.195	0.150
Activity
Job/occupation	1	37	.	4	58	.	–0.085	0.395
Leisure time	9	17	12	1	41	8	0.246	0.049
Social interaction	15	23	.	12	47	3	0.248	0.046
Trust	9	28	1	3	59	.	0.314	0.007
Social conflicts	6	32	.	0	62	.	0.323	0.001

Table 4.

Association Between Livelihood Transformation and Type of Craft in Kamasan.

Livelihood Components	Chi-square TestH_a: There is a Relationship Between these Variables and the Type of Craft Produced
	Crafts for Religious Needs (n = 21)			Crafts not only for Religious Needs (n = 23)			Cramer’s V	Pr
	Experiencing Better Changes	Not Experiencing Changes	Experiencing Worse Changes	Experiencing Better Changes	Not Experiencing Changes	Experiencing Worse Changes	Cramer’s V	Pr
Capability
Digital tools	.	21	.	3	19	1	0.3022	0.134
Internet signal	.	21	.	3	20	.	0.2585	0.086
Knowledge and skills	10	11	.	13	10	.	–0.0890	0.555
Health condition	3	17	1	9	13	1	0.2800	0.178
Asset
Income	2	18	1	3	19	1	0.0557	0.934
Ease of fulfilling needs	15	6	.	16	7	.	0.0204	0.892
Savings	8	11	2	4	18	1	0.2727	0.195
House	5	16	.	3	20	.	0.3747	0.013
Vehicle	5	16	.	3	20	.	0.1394	0.355
Jewellery or valuable things	2	19	.	1	22	.	0.1026	0.496
Land	0	20	.	1	22	.	–0.1457	0.334
Activity
Job/occupation	2	19	.	0	23		0.2284	0.130
Leisure time	5	12	4	6	11	6	0.1005	0.801
Social interaction	4	16	1	8	15	.	0.2276	0.320
Trust	2	19	1	4	19	.	0.1145	0.448
Social conflicts	1	20	.	2	21	.	0.0780	0.605

Capability Component

Our survey indicates an insignificant change in livelihood capability in Kamasan as digital technology has been adopted (see Table 5). A tiny proportion of the community experienced an increase in the ability to use digital tools (3% ± 8.2%) and access the Internet (6% ± 8.2%). Nevertheless, more than half of the population experienced an improvement in knowledge and skills. Similar to the Kaliabu case, only a modest increase in the incidence of health conditions is perceived by the community (23% ± 8.2%), indicating that digitalisation does not directly affect this aspect. A possible explanation for these results is that in 2016 people had been exposed to digital technology, particularly the Internet and social media. When the government introduced online marketing methods and e-commerce, the community had basic knowledge and experience using the Internet for social purposes. This also explains why through this assistance, the community could improve their knowledge and skills in using digital technology for their livelihood. This premise is supported when we correlate the change in livelihood capability and the use of digital technology (see Table 3). It appears that people who have already used digital technology experienced a greater improvement in knowledge and skills compared to those who have not (see also Salemink et al. 2017; Whitacre 2008).

Table 5.

General Results of Livelihood Transformation in Kamasan (2016–2020).

As Digital Technology was Adopted in the Village (ca. 2016), I feel that ….	Estimation of Population Characteristics
Capability
I use better digital tools.	3% ± 8.2%
I have a better Internet signal.	6% ± 8.2%
I have better knowledge and skills.	54% ± 8.2%
My health condition is better.	23% ± 8.2%
Asset
My income has increased.	8% ± 8.2%
I can better fulfil my needs.	71% ± 8.2%
I have a better amount of savings.	21% ± 8.2%
I have a better quality of housing.	10% ± 8.2%
I have a better quality vehicle.	16% ± 8.2%
I have more jewellery or valuable things.	7% ± 8.2%
I have better land ownership.	1% ± 8.2%
Activity
I have a different job/occupation.	5% ± 8.2%
I have more leisure time.	19% ± 8.2%
I have better social interaction.	3% ± 8.2%
I trust people around me more.	1% ± 8.2%
I have more conflicts with people around me.	6% ± 8.2%

As Kamasan is well-known for its crafts categorised according to whether they are to be used for religious purposes or are for general consumers, we have checked whether there is a correlation between changes in livelihood capability with certain types of crafts. However, it appears that there are no significant differences between crafters for religious and non-religious purposes in terms of capability changes. A possible explanation is that the digital technology adopted is rather simple, and an intensive learning process is not required (Briggeman and Whitacre 2010; Fahmi and Savira 2023).

Asset Component

Our findings show relatively insignificant changes in livelihood assets due to digitalisation in the Kamasan case (see Table 5). A small proportion of the community had an increase in income after digitalisation (8% ± 8.2%). Nevertheless, most of the community felt that they could fulfil their needs better (71% ± 8.2%). Similar to the Kaliabu case, income might not be the only thing that facilitates ease in meeting their needs. Other factors may stimulate people to fulfil needs, including finding wider possibilities on the Internet. We also examine changes in other assets, particularly related to valuables. However, the results show that most people experienced only a little increase in the quality or amount of savings, houses, vehicles, jewellery, land ownership, and other basic life-supporting facilities (see Table 5). This confirms that the relatively simple digitalisation, in this case, does not directly affect an improvement in livelihood assets.

Our result also shows weak relationships between livelihood activities and digital technology use (Table 3), meaning that there are no differences between the community that already used digital technology and the community which did not in terms of livelihood asset changes. Similar results are also found when we check the correlation between the changes in livelihood activities and the type of crafts (Table 4). In this regard, our results seem robust considering various circumstances related to digital technology use: digitalisation does not generate changes in livelihood assets in Kamasan. This possibly corresponds to the simple and broad scope of digitalisation in this village, which does not change earning patterns.

Activity Component

Like the two previous components, our analysis shows little change in livelihood activities in Kamasan, as seen from changes in jobs, social interaction, trust, and conflict (see Table 5). Only a very small proportion of the residents change their jobs after using digital technology (5% ± 8.2%). This indicates that digitalisation has not stimulated a structural shift in the village economy. Similar to Kaliabu, part of the community had more leisure time, possibly due to flexibility in work. However, when we check the robustness of this result by looking into the correlation between changes in activities and the use of digital technology, the evidence is unclear that this corresponds to a specific group that uses digital technology (Table 3). In other words, more leisure time might be affected by other factors than digital technology use. We also found no significant changes in social relationships in Kamasan after digital technology use, as seen from perceptions about social interactions, trust, and conflict (Table 5).

We also check whether this result differs according to types of crafts (Table 4). Again, we found no differences between religious and non-religious crafters, which means that digitalisation does not imply significant changes in Kamasan’s livelihood activity. This means that digital technology did not yet stimulate a shift of the dominant economic sector in the village, one of the main indicators of rural transformation (Berdegué et al. 2014; Rigg 2001).

Discussion

Our analyses in the preceding two sections have measured changes in livelihood capabilities, assets, and activities in Kaliabu and Kamasan due to digitalisation. It appears that there are changes in livelihoods in both cases, although not to a large extent. Reflecting the complexity of digitalisation in both villages, there are differences in livelihood changes between the two cases.

In the capability component, rural communities in both villages experienced an increase in knowledge and skills. This supports the argument that rural digitalisation opens up opportunities to obtain knowledge (Salemink et al. 2017; Whitacre 2008). However, only the Kaliabu community experienced a significant increase in the ability to use digital tools. This possibly corresponds to the nature of digitalisation, or the narrower scope of the digital economy, in Kaliabu, which requires efforts to comprehend digital technology. In comparison, the social commerce in Kamasan, like social media, is simpler: as they are already familiar with social media, there are no challenges in using it.

In the asset component, rural communities in both cases did not experience a significant increase in income, although they felt it was easier to fulfil their needs. In the Kaliabu case, only households with logo designers in their families significantly experienced an income increase. This possibly indicates two explanations. First, digitalisation cannot yet increase income in the community in general: only when community members use it actively in their jobs may digital technology potentially improve their incomes (see Briggeman and Whitacre 2010; Whitacre 2008). In other words, rural communities, in general, have not used digital technology to earn a living, which does not align with the essence of digitalisation as a macro strategy (Staab 2017). Second, the livelihood asset in these two villages is related to many elements, not only to digital technology (see Ghosh and Ghosal 2021).

In the activity component, a proportion of rural communities have shifted to another sector due to digitalisation, especially in Kaliabu (below 20%). However, this is not sufficient to say that the change reflects a structural shift to another sector, which indicates rural transformation (see Rigg 2001). Apart from jobs, it can be concluded that there is little change in social relationships due to digitalisation. This expresses that the digital and social exclusion seen in developed countries is not yet reflected in both cases (cf. Salemink et al. 2017; Whitacre 2008).

Conclusion

Despite its descriptive nature, our study has shown that digitalisation, to a certain degree, stimulates changes in rural livelihoods in Kamasan and Kaliabu. However, in the two cases, and possibly in other instances in the Global South, these changes are yet not significant enough to stimulate a structural shift, which constitutes one of the leading indicators of rural transformation (Berdegué et al. 2014; Rigg 2001). Our case study corresponds to the fact that digital technology is not yet used intensively in livelihood activities but possibly used instead for social purposes (i.e., social media). In other words, the current stage of rural digitalisation in the Global South is not yet nurturing the mechanism of digital capitalism, which would greatly restructure economic practices (cf. Staab 2017). Nevertheless, as we compare the complexity of digital technology adopted in both cases, we conclude that the more complex nature of digital technology adopted by a rural community tends to trigger more significant changes in rural livelihoods. Therefore, it is to be expected that with the more intensive future use and complexity of digital technology in rural livelihoods, there is a possibility that digitalisation will more significantly influence the picture of rural transformation in the Global South. This poses many challenges that may have been seen in the Global North to be relevant in the Global South.

Footnotes

Acknowledgement

The authors are grateful for the funding assistance from Program Penelitian, Pengabdian kepada Masyarakat dan Inovasi of Institut Teknologi Bandung.

Declaration of Conflicting Interests

The authors declared no potential conflicts of interest with respect to the research, authorship and/or publication of this article.

Funding

The authors received no financial support for the research, authorship and/or publication of this article.

ORCID iD

Fikri Zul Fahmi

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