Strengthening Rural Smart Economy: Evidence from Village Innovation Programs in Indonesia and South Africa
Keywords:
Rural Development, Smart Economy, Village Innovation ProgramAbstract
The transformation of rural development in Global South countries requires innovative approaches to strengthen local economic resilience and competitiveness amid structural changes, spatial inequalities, and increasingly complex market dynamics. This study aims to analyze the contribution of village innovation initiatives in Indonesia and South Africa in shaping an adaptive, inclusive, and endogenous potential-based rural smart economy. This study uses a qualitative approach with a comparative case study design, combining interviews, observations, and documentation. The results show that the Village Innovation Program in Indonesia and various community-based rural innovation initiatives in South Africa empirically contribute to improving economic and digital literacy, diversifying local resource-based products, and strengthening market connectivity through collective mechanisms, cooperatives, and local socio-economic networks. The findings also indicate that a smart rural economy is determined more by social organizational capacity, institutional coordination, and market integration than by the mere adoption of technology. Nevertheless, relatively similar structural challenges remain, particularly those related to infrastructure limitations, unequal access to resources, and uneven institutional capacity. This study concludes that strengthening the rural smart economy through village innovation programs is a strategic path for rural development in the Global South, with the main prerequisites being sustainable policy support, cross-sector integration, and strengthening local institutions to achieve inclusive and sustainable development.
References
Agrawal, A., & Gibson, C. (1999). Enchantment and disenchantment: The role of community in natural resource conservation. World Development, 27(4), 629–649.
Antlöv, H., Wetterberg, A., & Dharmawan, L. (2016). Village Governance, Community Life, and the 2014 Village Law in Indonesia. Bulletin of Indonesian Economic Studies, 52(2), 161–183.
Bebbington, A., Dharmawan, L., Fahmi, E., & Guggenheim, S. (2004). Village politics, culture and community-driven development: insights from Indonesia. Progress in Development Studies, 4(3), 187-205.
Becattini, G., Bellandi, M., & De Propris, L. (2009). A Handbook of Industrial Districts. Edward Elgar Publishing Ltd.
Boisen, M., Terlouw, K., Groote, P., & Couwenberg, O. (2018). Reframing place promotion, place marketing, and place branding - moving beyond conceptual confusion. Cities, 80, 4–11.
Bowen, G. A. (2009). Document analysis as a qualitative research method. Qualitative Research Journal, 9(2), 27–40.
Braun, V., & Clarke, V. (2006). Using thematic analysis in psychology. Qualitative Research in Psychology, 3(2), 77–101.
Bukht, R., & Heeks, R. (2018). Digital economy policy in developing countries (DIODE Network Paper No. 6). Centre for Development Informatics, University of Manchester.
Creswell, J. W., & Poth, C. N. (2018). Qualitative inquiry and research design: Choosing among five approaches. Sage.
Forde, S., Kappler, S., & Björkdahl, A. (2021). Peacebuilding, structural violence and spatial reparations in post-colonial South Africa. Journal of Intervention and Statebuilding, 15(3), 327–346.
Francis, D., & Webster, E. (2019). Poverty and inequality in South Africa: Critical reflections. Development Southern Africa, 36(6), 788–802.
Giffinger, R. (2007). Smart cities Ranking of European medium-sized cities. Research Institute for Housing, Urban and Mobility Services, (16), 1–24.
Gulisova, B., Horbel, C., & Noe, E. (2025). Place branding and sustainable rural communities: qualitative evidence from rural areas in Denmark. Journal of Strategic Marketing, 33(3), 356–377.
Hinrichs, C. C. (2000). Embeddedness and local food systems: Notes on two types of direct agricultural market. Journal of Rural Studies, 16(3), 295–303.
Kvale, S., & Brinkmann, S. (2009). InterViews: Learning the craft of qualitative research interviewing. Sage.
Larson, A. M., & Ribot, J. C. (2007). The poverty of forestry policy: Double standards on an uneven playing field. Sustainability Science, 2(2), 189–204.
Lincoln, Y. S., & Guba, E. G. (1985). Naturalistic inquiry. Sage.
Logar, E. (2025). Place branding as an approach to the development of rural areas: a systematic analysis of Web of Science ‘geography’ literature. GeoJournal , 90(4).
Lusardi, A., & Mitchell, O. S. (2014). The economic importance of financial literacy: Theory and evidence. Journal of Economic Literature, 52(1), 5–44.
Mabunda, Q. (2017). The challenges of lack of sustainability of cooperatives: A perspective of selected art and craft cooperatives of Muyexe Village in Greater Giyani Municipality of Limpopo Province (Master’s dissertation). University of Limpopo.
Makgatle, C. J. (2023). Rural development in South Africa: Lessons learned from the Integrated Sustainable and Comprehensive Rural Development Programmes (Master’s dissertation). University of South Africa.
Makhubele, L., Dunbar, A., & Chirwa, P. W. (2026). Perceived abundance and cultural-economic use-value of tree species in the Mopane woodlands, Mopani District, South Africa. Sustainability, 18(1), 387.
Mishi, S., Sikhunyana, Z., Ngonyama, N., & Sibanda, K. (2020). Livelihood strategies and diversification amongst the poor: Evidence from South African household surveys. The Journal for Transdisciplinary Research in Southern Africa, 16(1), a726.
Mkhwanazi, S. B., & Jili, N. N. (2024). Spatial governance of the peripheries in South Africa: Past lessons and a look into the future. Africa’s Public Service Delivery and Performance Review, 12(1), a837.
Msweli, N. S., Agholor, I. A., Morepje, M. T., Sithole, M. Z., Nkambule, T. B., Thabane, V. N., Mgwenya, L. I., & Nkosi, N. P. (2025). Optimizing water conservation in South Africa’s arid and semi-arid regions through the cultivation of indigenous climate-resilient food crops. Sustainability, 17(3), 1149.
Mulaudzi, A. I., Olorunfemi, O. D., & Agholor, A. I. (2024). Social media utilization level among South African smallholder farmers: A case study of Mopani District, Limpopo Province. Cogent Social Sciences, 10(1).
Nxumalo, G. S., & Chauke, H. (2025). Challenges and opportunities in smallholder agriculture digitization in South Africa. Frontiers in Sustainable Food Systems, 9, 1583224.
Nyawo, P. H., & Olorunfemi, O. D. (2023). Perceived effectiveness of agricultural cooperatives by smallholder farmers: Evidence from a micro-level survey in North-Eastern South Africa. Sustainability, 15(13), 10354.
OECD. (2025). Rural Innovation Pathways. Organisation for Economic Co-operation and Development.
Ostrom, E. (1990). Governing the Commons: The Evolution of Institutions for Collective Action. Cambridge: Cambridge University Press.
Philip, L., & Williams, F. (2019). Remote rural home based businesses and digital inequalities: Understanding needs and expectations in a digitally underserved community. Journal of Rural Studies, 68, 306–318.
Porter, M.E.; Kramer, M.R. (2011). The Big Idea: Creating Shared Value. How to Reinvent Capitalism—And Unleash a Wave of Innovation and Growth. Harvard Business Review, 89(1/2), 62–77.
Purbawati, D., E.P., Apriatn., Saryadi, Nurseto, S. (2025). Sustainable Growth for Rural Entrepreneurs: A Strategic Approach to Product Diversification in Rowosari’s Msmes. Journal of Economics, Finance and Management Studies, 08(07), 4630-4635.
Qange, S., Mdoda, L., Nontu, Y., Mabitsela, M. M., & Gidi, L. S. (2025). Evaluating the impact of adopting conservation agriculture on farm returns of smallholder vegetable farmers in the Eastern Cape Province: Implications for extension services. Frontiers in Sustainable Food Systems, 9, 1605561
Ray, C. (2006). Neo-endogenous rural development in the EU. In P. Cloke, T. Marsden, P. Mooney (Eds.). The Handbook of Rural Studies. Sage.
Renting, H., Marsden, T. K., & Banks, J. (2003). Understanding alternative food networks: Exploring the role of short food supply chains in rural development. Environment and Planning A, 35(3), 393–411.
Salemink, K., Strijker, D. & Bosworth, G. (2017). Rural Development in the Digital Age: A Systematic Literature Review on Unequal ICT Availability, Adoption, and Use in Rural Areas. Journal of Rural Studies, 54, 360-371.
Scott, A. J. (2010). Cultural economy and the creative field of the city. Geografiska Annaler, Series B: Human Geography, 92(2), 115–130.
Smidt, H. J., & Jokonya, O. (2022). Factors affecting digital technology adoption by small-scale farmers in agriculture value chains (AVCs) in South Africa. Information Technology for Development, 28(3), 558–584
Spradley, J. P. (1980). Participant observation. Holt, Rinehart and Winston.
Throsby, D. (2001). Economics and Culture. Cambridge University Press.
UNESCO. (2013). Creative Economy Report. UNESCO.
Visvizi, A., & Lytras, M. D. (2018). It’s not a fad: Smart cities and smart villages research in European and global contexts. Sustainability, 10(8), 2727.
Yin, R. K. (2017). Case Study Research and Applications: Design and Methods. Sage.
