Digital Transformation and AI Readiness for Strengthening Rural Economic Resilience:

a BUMDes Case Study

Abstract

Purpose: This study examines how digital transformation within BUMDes Agung Manunggal contributes to rural economic resilience in Kebonagung Village and explores the readiness, potential applications, and strategic role of artificial intelligence (AI) in strengthening BUMDes competitiveness and organizational effectiveness.

Research Method: A qualitative case study was conducted in Kebonagung Village, Imogiri, Bantul, Special Region of Yogyakarta, Indonesia. Data were collected through in-depth interviews with BUMDes managers, village government representatives, business-unit managers, and relevant stakeholders, complemented by observation and documentation. Data were analyzed using an interactive qualitative analysis and thematic approach, with source and method triangulation applied to enhance the credibility of the findings.

Results and Discussion: The findings reveal that BUMDes Agung Manunggal is at an early stage of digital transformation. Digital technologies are currently used for administration, financial transactions, and promotion, but remain fragmented and have not been fully integrated across business units. AI has not yet been formally implemented; however, participants identified its potential for digital marketing, customer service, business analysis, reporting, and operational support. Human-resource capability emerged as the primary barrier to further digital transformation. BUMDes contributes to rural economic resilience through essential service provision and the potential strengthening of local production, distribution, and economic circulation.

Implications: BUMDes should prioritize digital skills, system integration, formal digital policies, younger workforce involvement, and external collaboration before gradually adopting AI-based solutions.

Originality: This study provides a village-level perspective linking digital transformation, emerging AI readiness, BUMDes institutional capability, and rural economic resilience, emphasizing AI as a prospective capability rather than an already realized economic intervention.