Internet Penetration as a Driver for Village's Business-Economics Activities

Around 80% of Indonesian villages are categorized as rural villages, and the Indonesian government has committed rural village development as a priority. Literature indicates that ICT, especially Internet access, becomes a driver for economic growth at the country level, regions, and rural villages. However, limited studies were investigating the relationship between Internet penetration and economic activities in rural areas. This study aims to characterize Indonesian provinces based on internet penetration and the village's business-economic activities. The result should assist the government in rural development planning. This research adopted a data mining approach, implemented by the CRISP-DM process framework and Knime Analytical Platform. Secondary data was gathered from the Central Bureau of Statistics (BPS). The object of analysis is 27 provinces outside Java and Bali. The cluster analysis identifies two clusters consisting of 12 and 15 provinces. The finding indicates that the internet penetration rate is positively associated with four aspects of the village's business-economics activities: the micro-small enterprises, trading businesses, shopping facilities, and leisure facilities. Provinces with low internet penetration rates and business-economics activities, such as Papua and East Nusa Tenggara, require more intervention. The implementation of the predictive model revealed that Central Kalimantan shifted its position in the cluster membership between data 2014 and 2018. This study suggests the government improve the facilitation of business-economic activities together with internet access. Moreover, business-related mobile apps need to be promoted to make internet access significantly impact businesses.