Factor Analysis of The Digital Economy In The Villages Iwan Kurniawan 1 , Budi Setiawan 2 Politeknik STIA LAN Bandung, Jl. Hayam Wuruk No.34-38 Bandung {iwan.kurniawan@poltek.stialanbandung.ac.id} Abstract. This study aims to describe the characteristics of economic growth in rural communities, determine significant factors, and provide alternatives to enhance economic growth through the digital economy. The research method used is quantitative using factor analysis and determination of the research locus and respondents using the Proportional Stratified Random Sampling technique. Data collection using questionnaires and interview and observation guidelines. The results of research conducted in three districts in Bandung Regency show that the Digital Economy formation model which previously consisted of 12 components can be reduced to only 4 factors in rural areas, namely the factors of community environmental conditions, communication processes, implementation of activities, and businessmen competence. The role that is considered influential and strategic for the development of the digital economy in rural areas is the all factor of formation in the digital economy. The competence of businessmen is indeed very diverse but business actors who want to learn to adapt to follow the development of digital technology will increase economic growth in their villages. Variable Discordance, Internet Networking, Immediacy, and Knowledge have a strong relationship to the four factors of the formation of the digital economy. Keywords: factor analysis, digital economy, villages 1 Introduction Digitalization has changed the way human beings think and behave, especially in the economic sector because business processes are faster, more efficient, and effective. The digital era offers new economic opportunities that were not seen before, through various creative ways based on digital services. The business model in transactions also moves quickly from conventional market systems to e-commerce platform markets, which no longer recognize regional boundaries for both producers and consumers. During the last decade Indonesia is experiencing the slowest economic growth, but the growth of the e-commerce industry is actually accelerating in the country's economy. E- commerce is one part of digital economic activities. It is quite possible that the e-commerce industry can become one of the backbones of the national economy [9]. The Governor of West Java said to bring the Digital Village program for the village community to be more productive. Digital villages do not only deal with the internet but also changes the way it trades, changes the way it communicates, maps potential, promotes village tourism through a digital ecosystem. Businesspeople in the village can trade online and be trained in e-commerce literacy. Trading of village produce will be cheap and practical with an easy application [10]. ICAS 2021, September 15, Bandung, Indonesia Copyright © 2022 EAI DOI 10.4108/eai.15-9-2021.2315197