Rural smartness: Its determinants and impacts on rural economic welfare

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Rural smartness: Its determinants and impacts on rural economic welfare

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Mukti, Iqbal Yulizar / Henseler, Jörg / Aldea, Adina / Govindaraju, Rajesri / Iacob, Maria E.

Abstract Solving urbanization problems, especially in developing countries, solely through the adoption of smartness in urban areas is insufficient as urbanization is mostly driven by the wide urban-rural economic gap. To narrow this gap, the adoption of smartness needs to be extended into rural areas. However, studies in that direction are still lacking. Therefore, we developed a theoretical model that explains the determinants of rural smartness and its subsequent consequences on rural economic welfare. We validated the model with survey data from 179 villages in West Java Province, Indonesia. The results suggest that rural smartness is determined by the interplay of organizational, environmental, and technological readiness, and has a strong positive impact on innovativeness which, in turn, improves the competitiveness of the rural business ecosystem. This model can serve as a reference for further studies of rural smartness and as the foundation for the design of information platforms supporting it.