Where do I get a shovel?

There is no shovel in the game and that mound of dirt was just a rock. It doesn't do anything.

The NPC was referring to dig spots.enter image description here

The small black worms in front of me are a dig spot that can be dug with a hoe. Dig spots can contain valuable items, including books and museum artifacts. They're a little easier to spot in-game, since they're animated.