Scaling digital technology for rural prosperity

Rural regions are critical for the global economy. As of 2023, 3.42 billion people, or 43% of the global population, resided in rural regions. In emerging regions, the share is much higher. For instance, in South Asia, 63.64% live in rural areas.

Similarly, in sub-Saharan Africa, over 57% of the population resides in rural regions. Besides being populous, these regions contribute significantly to livelihoods. Agriculture in large countries like India contributes to more than 42% of livelihoods and 18% of the country’s gross domestic product, while in sub-Saharan Africa, over 60% of the population are smallholder farmers.

Given the extent of human capital, along with abundant natural resources such as fertile land, freshwater and forests, rural regions have relatively underperformed in driving economic value. This can be attributed to factors such as lack of basic infrastructure, both physical and digital, coupled with challenges in accessing services including healthcare, education and finance.

Currently, the ability to earn sustainable incomes in rural settings in emerging economies is gradually decreasing, causing rapid urban migration, which may itself be unsustainable.

By 2040, an additional 1.6 billion people will move into cities, with 80% of this growth occurring in countries least equipped to handle it. In such cases, migration can result in sprawling informal settlements, strained infrastructure and increased vulnerability to climate change-related hazards.

Recent advancements in digital technologies can play a significant role in enabling rural regions to drive economic growth. These technologies can pivot these regions to become demand drivers (by increasing disposable incomes and triggering latent demand) and supply centres (by improving efficiency and productivity) from being receivers of support.

Three ways digital technologies can drive rural growth are:

At a foundational level, digital technologies can improve access to critical services. For instance, telemedicine can connect healthcare providers to village-level clinics, digital classrooms can connect students with educators and fintech tools can help the unbanked securely save, borrow and insure – boosting the resilience of rural residents.

Technology can enhance traditional livelihoods anchored in agriculture, livestock rearing forestry and artisanal crafts through targeted services. Precision farming tools and real-time weather updates can help bolster farm profits, for example, while technology-enabled farm-to-fork models, farmers can service urban centres, further unlocking marketability of their produce.

Rural areas can leverage a mix of physical and digital technologies to support diversification into new businesses such as rural tourism, agri-processing, hyperlocal logistics, or local entrepreneurship. For instance, youth can be trained in agricultural drones to complement existing activities. Similarly, investments in processing infrastructure and value addition can unlock additional economic growth opportunities.

For digital technologies to have a transformative impact, a comprehensive approach for tech integration is required. Some key considerations for decision-makers who plan to deploy digital tech for rural prosperity include:

A diagnostic approach is important for choosing the right technology mix for rural transformation. While choosing the right technologies, it is important to assess gaps on:

Once gaps are assessed, it is important to evaluate the value-to-cost ratio of different technology use-cases. Values can be both direct (e.g. increased income, time savings) and indirect (e.g. improved community resilience). An extremely simplified framework, using illustrative figures for representation only, is depicted below:

Piloting technologies through public-private partnerships (PPPs) can ensure better design, execution and long-term sustainability. In PPPs, governments bring scale, trust and access to beneficiaries, while private players can bring innovation, investments, technical expertise and operational agility. Relying solely on government-led pilots can result in rigid procurement-driven approaches that lack agility and prevent rapid iteration.

The Saagu Baagu project in India identified chilli cultivation as a key livelihood profile. Four technologies were then prioritized and delivered through PPPs where the government enabled farmer onboarding, while the private sector delivered services. Within a few cycles, farmers saw a 21% increase in chilli yields per acre, a 9% reduction in pesticide use, a 5% decrease in fertilizer usage, and an 8% improvement in unit prices due to quality enhancements.

Beyond service delivery, decision-makers should evaluate how technology can help enable the planning and evaluation of pilots. For instance, digital tools such as mobile surveys, geospatial mapping and remote sensing can allow for rapid, granular data collection on health, livelihoods, infrastructure and demographics. Similarly, technology enables rapid, low-cost evaluations through tools like sensors, mobile reporting and satellite data. This enables shorter evaluation loops, making pilots more agile and adaptive, so that they can be modified early.

For long-run implementation, it is also necessary to invest in human capabilities for both the delivery of technologies and enabling technology-driven entrepreneurship. For instance, in agriculture and healthcare, instead of technologies being delivered directly to residents, they can be intermediated via extension workers or village-level entrepreneurs.

These actors can facilitate technology adoption, offer basic troubleshooting and serve as feedback channels. Investing in their digital literacy and incentivizing their role can transform them into critical nodes of rural tech ecosystems, ensuring sustainable and scalable deployment. An example of this is India’s Common Services Centres (CSCs) model. CSCs have seeded rural entrepreneurs who provide access to government, financial and utility services to residents of rural areas for a fee.

Over a longer time frame, it is also necessary to build innovation ecosystems in rural areas that shift these areas from being import-dependent on imported tech to innovation hotspots. Targeted investments can enable such localization. For instance, decision-makers could set up infrastructure such as rural technology incubators and data exchanges.

Additionally, schemes that incentivize reverse migration can enable building up of rural technology capabilities. In South Korea, to improve the adoption of agriculture among rural populations, the government launched smart farm innovation valleys and provided youth with support to set up smart farms, including access to rental farmland and grants for setting up smart farms.

To unlock rural prosperity, technology must therefore be deployed not as a one-size-fits-all solution, but through a context-driven, inclusive and phased approach.

By aligning technologies to local needs, strengthening delivery mechanisms and fostering decentralized innovation ecosystems, digital technologies can be well leveraged to deliver equity, resilience and sustainable growth for the world’s rural communities.