Jejak Vol 13 (2) (2020): 319-331 DOI: https://doi.org/10.15294/jejak.v13i2.25036 JEJAK Journal of Economics and Policy http://journal.unnes.ac.id/nju/index.php/jejak Opportunities of Using Information and Communication Technology in Reducing Poverty Nugrahana Fitria Ruhyana1 , 2Wiedy Yang Essa 1Sekolah Tinggi Ilmu Ekonomi Sebelas April, Sumedang 2Research and Development Agency of Bandung City Permalink/DOI: https://doi.org/10.15294/jejak.v13i2.25036 Received: May 2020; Accepted: July 2020; Published: September 2020 Abstract The development of Information and Communication Technology (ICT) is believed to improve the quality of human life, reduce inequality, and encourage the acceleration of poverty reduction. ICT can be developed as an alternative poverty alleviation program. The purpose of this study was to determine the opportunities of utilization of ICT in reducing poverty in Sumedang Regency and Bandung City. This study used quantitative methods with sources taken from National Socio-Economic Survey (Susenas) data in 2018. The data was analyzed by the Probit Regression method. ICT variables consisted of the ownership of cellular phones, computer use, and internet access. The results of the econometric model indicate that ICT can reduce the likelihood of poverty after being controlled by other related variables such as age, gender, education level, number of household members, access to business credit, and employment status. The government is expected to synergize with stakeholders to improve public services integrated with poverty reduction through the use of ICT, educating the public with productive internet, and expanding the development of ICT infrastructure. Key words : ICT, Poverty, Urban, Rural How to Cite: Ruhyana, N., & Essa, W. (2020). Opportunities of Using Information and Communication Technology in Reducing Poverty. JEJAK: Jurnal Ekonomi dan Kebijakan, 13(2). doi:https://doi.org/10.15294/jejak.v13i2.25036 Corresponding author : Nugrahana Fitria Ruhyana p-ISSN 1979-715X Address: St.Anggrek, No. 19 Sumedang-45323 E-mail: [email protected] e-ISSN 2460-5123 320 Ruhyana, N.F., & Essa, W.Y. Opportunities of Using Information and Communication Technology in Reducing Poverty 2014). The use of ICTs can provide opportunities INTRODUCTION for the poor to get access to better education, Poverty remains a strategic issue in health, employment, and markets. In addition, Indonesia, particularly in West Java Province, ICTs can also facilitate the use of government with the highest population density services and access to microfinance (Cecchini, nationally. It holds the third-largest number S., & Scott, 2003; Urquhart, Liyanage and Kah, of poor people in Indonesia after East Java 2008). and Central Java, whose location is Research conducted in several countries concentrated in rural areas (BPS, 2019). As a has proven that ICT is an effective means to result, most districts/cities in West Java have tackle poverty. However, it requires the active declared poverty alleviation as a roles of the government and all stakeholders to development priority. One of them is get the desired results and to overcome various Sumedang Regency, which in its Regional obstacles in the development of ICT, such as Long Term Development Plan 2018-2023 socio-cultural, infrastructure, economics, and targets a reduction in the poverty rate of technology. For developing countries, the cost 0.8% per year (Regional Development of providing hardware and access to rural areas Research and Development Planning Agency is a common economic and infrastructure of Sumedang Regency, 2019). The target is obstacle (Maxfield, 2004). not easy to achieve, considering that during Previous studies have revealed that the period 2010 - 2018, the average reduction economic background and income per capita in the poverty rate is only 0.44% per year. In are considerably influential in increasing the this study, the authors set the city of technological literacy of a society Bandung -the capital of West Java Province- (Neelameghan, 2004). Meanwhile, the lack of and neighboring Sumedang Regency, as a relevant local digital content also serves as a benchmarking. challenge in ICT development. Since many ICT As a metropolitan/urban area, one of tools and internet content depend largely on Bandung's challenges is to implement steps English media, people with limited English to accelerate poverty reduction to achieve language proficiency struggle to master them. 'Without Poverty' target by 2030, according Besides, socio-cultural barriers also occur due to to the SDGs. Likewise, since the poverty rate the existence of values that oppose the local in the rural area of Sumedang Regency culture of a society (Chib et al., 2008). remains considerably large, the poverty Chowdhury (2000) explains the functions condition of West Java persists as a major of ICTs in alleviating poverty: creating young issue in the national development agenda. workers' skills, providing numeracy and literacy Information and Communication skills for children and poor parents, and Technology (ICT) is believed to be one of the combating child malnutrition by ensuring factors that can reduce poverty, especially in adequate information available to households, developing countries with large especially for mothers. ICTs can also be used to infrastructure disparities between villages reduce information gaps in various stakeholders and cities. The lack of information to enable appropriate actions for poverty accessibility has also hampered rural reduction (Urquhart, Liyanage and Kah, 2008). communities dominated by farmers to take Furthermore, Ariansyah (2018) research actions like adaptations of modern mentioned a positive impact in promoting technology and strategies in intensifying internet coverage on monthly household agricultural production (Khuhawar et al., income. JEJAK Journal of Economics and Policy Vol 13 (2) (2020): 319-331 321 Poverty assessment at the micro-level towards the use of personal computers tend to with households and individuals as units of continue to live in ICT poverty. analysis for a study is the right choice for Research on poverty determinants in solving poverty problems, especially in Sumedang Regency was conducted by Darmadi developing countries (Andersson, Engvall, & (2012) with a probit model using the 2010 Kokko, 2006). This type of research can Susenas data. However, it emphasized more on describe the conditions/characteristics of the education factors and left out ICT elements. An poor to assist policymakers in establishing important finding is that the level of education, appropriate interventions in poverty measured by the length of formal education, reduction. affects the reduction in the likelihood of poor Several previous studies have been individuals/households' existence in Sumedang referred to by the authors in the selection of Regency. Other factors that play a role in variables, both for ICT and other explanatory reducing poverty related to the characteristics variables. Rini & Sugiharti (2017) used the of household heads are age, employment, 2012 Susenas data covering all provinces in number of household members, access to Indonesia with a logit model approach to credit, and residence. estimate the probability of poor status Research results suggest that the use of households by including several variables of ICTs can be an effective means of improving the household characteristics. The variables are quality of people's lives, including reducing the head of the household's gender, age, poverty. However, this needs to be studied in employment status, and education level, as more depth, especially related to differences in well as the number of household members, community domicile in rural and urban areas. access to business credit, cellphone This finding is expected to be an input for local ownership, and location of residence. In the governments in overcoming the poverty study, cellphone ownership is a significant problem. variable that can reduce the likelihood of The purpose of this study was to poor households. determine and compare the effects of ICT use in Widyastuti (2015) examined the effect reducing poverty in Sumedang Regency and of cell phone, internet, and broadband Bandung City. This research was the penetration on the rate of poverty. With an development of several previous studies related econometric approach over 13 years, it is to poverty reduction at the household and found that cell phone and internet individual level by emphasizing the influence of penetration have a significant effect in the use of ICT as a determining factor. Several reducing poverty. Between the two other explanatory variables with a strong penetrations, internet penetration has a correlation with poverty at the micro-level were dominant influence on the rate of poverty included and compared between Sumedang reduction. Regency (dominated by rural areas) with Anderson (2006) specifically examined Bandung City (an urban area). the transition in and out of society in the UK in ICT poverty, which is shown from internet access in households and/or cell phone METHOD ownership. Another significant finding is This study used a quantitative method that those who have a negative attitude with data sources from the 2018 National Socio- Economic Survey (Susenas); therefore, it was a 322 Ruhyana, N.F., & Essa, W.Y. Opportunities of Using Information and Communication Technology in Reducing Poverty cross-section data. Selected respondents logit model are models used to analyze the