Framework of e-marketplace adoption by small medium enterprises in Indonesia: an investigation of the digital divide based on the Palapa Ring regions

Small and medium enterprises (SMEs) play a crucial role in Indonesia’s development. Out of all SMEs in Indonesia, 98% are micro-sized businesses which employ less than 10 people and rely greatly on their owners. Since 2018, SMEs in Indonesia have been encouraged by the government to adopt cloud-enabled e-marketplace platforms with the introduction of the two government initiatives called the ‘National Movement of 1000 Digital Startups’ and the ‘National Movement of SME Go Online'. Despite the support from the government, the rate of e-marketplace adoption is still shown to be low in areas that are characterised by the digital divide. The digital divide is most evident in rural populations that have low levels of education, low trust in technology, the absence of support from government and private sector services and poor-quality infrastructure. The Indonesian Government has responded to this by instituting the Palapa Ring project, which aims to improve national telecommunications infrastructure. This research seeks to define relevant measures to better leverage the investments made in the Palapa Ring project for SMEs in rural Indonesia.