Rural entrepreneurial motivation and digital adoption: Evidence from two cases in Bali,Indonesia

Abstract

Digitalisation supports the professionalisation and innovation of rural entrepreneurship in the Global South, enabling it to adapt to various transformations, whether driven by different necessities, or opportunities. This study uses neo-endogenous development theory (NED) to understand local differences in meaningful digital adoption and usage, considering different rural entrepreneurial motivations – necessity and opportunity-based entrepreneurial activity. We conducted interviews in two entrepreneurial communities in Bali, Indonesia: Kamasan, which produces traditional cultural products, and Kintamani, which produces coffee. The local variety of endogenous resources in both communities drives the different adoption patterns of entrepreneurs. In turn, these diverging digital adoption patterns determine whether a community is open to more exogenous resources through digital channels, highlighting the Matthew effect of digitalisation. Our findings show that the motives for running entrepreneurial activity refer to similar digital adoption patterns in rural communities - in which necessity-based entrepreneurs have limitations in adopting digital technology and opportunity-based entrepreneurs have more freedom in absorbing external knowledge and innovation through digital technology adoption. Lastly, we propose that future research into digitalisation in rural economies in the Global South should work from a diversified perspective, recognising the differences between – and within – rural communities.