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The impact of Internet in rural India

Given the rural context in developing countries, how has the Internet influenced their socialization, economic opportunities and access to knowledge resources? Rural areas do not have educational, communication, and transportation facilities. Job opportunities are not many; information on job opportunities in other locations is not easily available. In emergencies like epidemic breaks or floods it is difficult to contact other organizations for help. Even commerce takes place at a primitive level. Do government initiatives to provide Internet access make a difference? To find out, we asked the people.

November 2016
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Executive Summary

Internet has greatly influenced the way individuals socialize, create and exploit economic opportunities and knowledge resources. However, it is not clear what aspects of socialization, economic benefits and knowledge contribute to the perceived impact of Internet on individuals.

It is expected that citizens in developing countries, in contrast to those in developed countries will perceive the impact of Internet differentially. Poorer Internet penetration rates in developing countries and low levels of developments of institutional infrastructure such as schools, libraries (as sources of knowledge), hospital, and emergency services are some of the factors that contribute to this. Within developing countries, a similar logic holds for the differential perceived impact between urban and rural areas.

Given the rural context in developing countries, we wanted to find out how individuals perceive the impact of Internet in terms of how it has influenced their socialization, economic opportunities and access to knowledge resources. Let us be more precise: socialization here refers to the ability to form social ties, draw information and other resources of individuals in the network for better working and living conditions, social status, happiness or self-esteem. Economic opportunities refer to increased productivity and innovation, value chain re-composition, access to public services and information, savings in transport time, timely access to health and education services, growth in scope of earning and opening new ways of earning more (increasing scope/scale of doing business, increased customer base /supplier base, enhanced product portfolio, enhancing employment opportunity etc.). Knowledge resources refer to ability to search for knowledge and combine knowledge to the available knowledge base.

In India, this has implications for several of the initiatives of the government, such as Digital India, in proliferating Internet, especially in rural areas. Digital India Initiative was launched on July 1, 2015. It aims to provide access to 60 million households in 250,000 village administrative units, through specially developed applications on the Internet to the rural areas, with the hope that the fruits of development  are shared by everyone, no matter what their gender, caste, economic and social status, or religion is. The success of this program depends not only on the government policies for proliferating infrastructure and content but also on how citizens perceive how such applications impact their life.

In particular, rural areas do not have educational, communication, and transportation facilities. Job opportunities are not many; information on job opportunities in other locations is not easily available. In emergencies like epidemic breaks or floods it is difficult to contact other organizations for help. Even commerce takes place at a primitive level. Therefore certain aspects of Internet appreciated by urbanites are not needed by rural folk and vice versa.

The study presented here is based on a sample survey, the sampled individuals belonging to rural areas. Each of 319 respondents chosen for the survey was given a set of 30 items to be rated. The items consisted of perception of the impact of Internet, and twenty nine other independent variables. For example, the main item measuring the perceived impact of Internet was articulated as the extent (using the scale above) to which the respondents felt that the Internet had an overall positive impact on their life.

Another item, “ability to get current information through Internet,” was measured by the rating given by the respondents rating of the statement,  “I am able to get current information through Internet.” If a respondent rates this statement with the score of 4, then it means that the respondent agrees with the above statement; on the other hand, if the score is 2, then it means they disagree with the statement.

As the objective of the survey was to understand the connection between the dependent variable, perception of the impact of Internet, and the independent variables, it was thought that too many independent variables would make the analysis unmanageable and would make the results difficult to interpret.

Hence, the first part of the analysis was to club the independent variables into groups, or aggregate variables (or latent dimensions), and combine their scores such that each aggregate dimension gets a single score, a weighted sum of the scores of its components. Further, each dimension should be independent of the other groups in a statistical sense, while the variables within a dimension should be strongly related to one another. Thus, as the number of dimensions is much smaller than the number of the original independent variables, the final number of variables considered in the analysis would be manageable.

The analysis combined the 29 independent items into three aggregate (or latent) dimensions, which were labelled as Empowerment, Enhanced scope of work, and Transactional efficiency. The individual items which were components of each of the above are given below.

Further analysis is called for after deciding the variables (the above three latent dimensions and other attributes of the respondents like age and gender) of interest. One would like to know for example whether the perceived impact would increase or decrease, and by what extent, if the score for empowerment is marginally increased. For such predictions, a multiple regression equation was estimated, with variables, which were already estimated to be significant through earlier analysis. The equation obtained was: Perceived Impact = 1.013 * (Empowerment) - 0.113 * (Enhanced Scope of Work) + 0.034 * (Age)  

In the above, age is a dummy variable, and during the estimation of the regression, was coded as 0 or 1 value as per the following coding system: Age=0 for age <= 25 years; 1 otherwise

Interpretating the results

The effect of ‘Empowerment’ on ‘Perceived Impact’ is significant and positive. For the rural user, the highest impact of the Internet is through ‘Empowerment’. This aspect shows that for an individual rural user, the Internet’s ability to bridge the poor physical and institutional infrastructure in rural areas is very important. The items that relate to Empowerment refer to the transport and information infrastructure, emergency services, and ability to maintain social ties. For these users, there was significant perceived impact owing to the Internet’s ability to overcome vulnerabilities on these dimensions.

The effect of ‘Enhancement of Scope of Work’ on ‘Perceived Impact’ is significant and negative. The implication is that, while keeping the values of other independent variables fixed, if the value for enhanced scope of work is increased, say by one, then the value of perceived impact is likely to decrease by 0.113. This result is counter-intuitive. However, this could be explained by understanding the theory behind satisfaction formation. For this we use Disconfirmation Theory that stipulates that satisfaction from Internet use is mainly determined by the gap between cognitive standards and desires or expectations, and perceived performance. Negative disconfirmation arises when the perceived performance, especially for Internet based services is below expectation or desires. In the context of our study, the above indicates that possibly individuals who used the Internet had high levels of desires and expectation on the dimension of ‘Enhancement of Work Scope’ by using the Internet. The outcomes on this dimension were lower than their desires and expectations, leading to a negative perception. This gap could be due to the novelty factor and the changing nature of scope of features and services available on the Internet that create dynamic determinants of satisfaction. Such changes could lead to users possibly having low self-efficacy and higher negative disconfirmations. An alternative explanation could that the gap was due to the individuals not getting enough support for enhancing their scope of profession as there may not be enough or relevant content for individuals in rural areas. In addition, lack of content in local language, poor presence of local websites, inadequate quality of Internet connectivity and meagre Internet penetration lead to low levels of perceived performance. Thus, high expectations and desires could be driving the negative disconfirmation and hence the negative sign on this dimension. On the other hand, the ‘Enhancement of Scope of Work’ is significant in terms of its ‘Perceived Impact’.

The effect of ‘Transaction Efficacy’ on ‘Perceived Impact’ is insignificant; and this variable was not therefore included in the regression. This could be due to the low levels of transactions by the survey respondents. The reason for this could be because Internet services in the survey area had become available only a few months back and may not have had high levels of service quality in the initial phases. Studies of Internet adoption indicate that users initially begin with the usage of Internet for social purposes. Only when they feel comfortable with various uses of Internet and see the benefits of on-line transactions, they may graduate to it. Online transactions for e-commerce are a relatively newer phenomena in India and many individuals in rural areas may not be able to participate on account of not having Internet banking, delivery of services to rural area, lack of trust in on-line transactions.

The above results make it clear that overall impact of Internet on a community is a complicated phenomenon. Often, the effect that a certain type of service has on the overall impact of Internet might go against common sense. The designers of the portfolio of Internet services would do well to assess a priori which applications are likely to contribute most to the community of users under consideration. What works for one user group may not work for another. A mere introduction of Internet infrastructure without a proper choice of services would only end up with wasted resources.

Note from the editors. This article was originally published in Technomic Review, our Indian edition, developed with Indian Institute of Management, Ahmedabad.

Rekha Jain
Professor, Indian Institute of Management, Ahmedabad