Sunday, 10 August 2014


Lately discussions over the Creative Industry were being intensified. In various seminars, and public for a opinions were expressed about the role of creative economy for national economy.

The Creative Economy was a concept in the era of new economy which intensified information and creativity that stems from Man’s creative juices as the essence of production commercial value.

As time goes by, economic development had come to creative economy after previously the world was dominated by Information Economy where information was the core of business. John Howkins in his book The Creative Economy How People Make Money from Ideas was the first person to introduce the term Creative Economy.

Howkins realized the emergence of a creative-based economy when in he saw that in 1997 America produced products of Intellectual Wealth acknowledged as Intellectual Rights [HKI] worth USD 414 billion, making it number one export commodity of the USA.

Howkins defined Creative Economy as “The Creation of Value as a Result of Idea” In an interview with Donna Ghelfi of World Intellectual Property Organization [WIPO] Howkins elaborated on Creative Economy as “economic activities among the people who spend most of their time creating ideas instead of doing the same thing repeatedly. To these people, to create ideas is something to be done for progress”.

Meanwhile the United Nation conference on Trade and development defined creative economy as “an evolving concept based on creative assets generating economic growth and development, Furthermore the Department of Culture, Media and Sport [DCMS] defined creative economy as “Creative as those industries which have their origin in individual creativity, skill and talent and which have potential for wealth and job creation through the generation and exploitation of intellectual property and content.”

In fact the Creative Economy was often seen as a concept which enfolded other concepts which was also becoming popular on the eve of this 21st century i.e. the Creative Industry. In fact the term ‘Creative Industry’ already popped up in 1994 in the report “Creative Nation” released by Australia” but this term was only uplifted in 1997 when DCMS United Kingdom set up Creative Industry Task Force.

So if the Government of RI set up the Ministry of Tourism and Creative Economy, it was indeed right. In the blueprint of development of Indonesia’s Creative Economy 2009 – 2015 Creative Economy was defined as “the new economic era after Agriculture, industry and information economy which intensified information and creativity by relying on ideas and knowledge of people as main production factor in the economic activities” with further elaboration elaboration as follows:

Firstly to promote increase of income, creation of employment and income from export and at the same time to promote social care, cultural diversity and human talent development.

Secondly to enhance the social aspect, culture and economy in the development of technology, Intellectual Rights and Tourism.

Thirdly economic activities based on knowledge with trans-sectoral connectivity within the dimension of development at micro and macro economic level as a whole.

Fourthly, a choice of development strategy which needed trans ministerial action and policy which was innovative and multi disciplinary.

It was presumable that Creative Economy in relation with Creative Industry was economy activity which relied on industry with human creativity as main asset to create economic added value. The only thing was to refer to the statement of the Ministry of Tourism and development of Creative Economy was still obstacle by many factors, in spite of the rich potential in that sector.

Having run Creative Economy for many years Indonesia had estimated data that the sector constituted 7% of national economy and divided into 15 sub-sectors of creative economy, of which 3 main sectors were culinary, fashion, an handicraft – while others were relatively less sizable but had high growth potential like the information Technology sectors.

Beside, access to technology by players of the Creative Economy was hard.  The same was with access to financing, access to market especially the global market and a conducive climate for the Creative Industry to grow including legal protection for Intellectual Right, and incentive and Government’s support. The last handicap was quality of Human Resources as related to formal education.

In fact Indonesia had great advantage compared to other countries like Singapore and Malaysia especially in terms of domestic market which was immense and strong. Indonesia must make the best of local asset found elsewhere.

The ministry of Tourism and Creative Economy themselves had schemed up long term plan in regard to development of National Sub-sector 2015 – 2019 15 sub-sectors like architecture, design, cinematography, and culinary. Besides also handicraft, fashion, music, publication and printing, interactive games, advertising, Fine Arts, entertainment, Information Technology and Broadcasting [TV and radio].

In the future, Creative Economy must be seen as a strategic sector in national development. This was because Creative Economy contributed significantly to national economy, i.e. 7% against GDP inclusive of multiplier effect.

Besides, the Creative economy could employ 11.8 million workers or 10.72% of total national workforce, create 5.4 million business units or around 9.68% of total national companies contributing Rp. 119 trillion to states’s forex reserve or 5.72% of total national export.

In 2013 last, growth of creative economy was posted at 5.76% or comparable to national economic growth at 5.78%. This was because Creative Economy stems from creativity, skill, and individual talent to contribute to the pursue of people’s welfare and job opportunities.

In some countries, Creative Economy played important role. In England, the pioneer in Creative Economy development, Creative Industry grew by 9% on the average per year, way above economic growth of 2% - 3%. The contribution to national in come was 8.2% or USD 12.6 billion and was the second biggest source of income next to Financial Sector – it exceeded income from manufacturing industry and oil gas. In South Korea, the Creative Industry contributed more than manufacturing since 2005. In Singapore Creative Industry contributed USD 5.2 billion or 5% of GDP.

Today Creative Industry in the world was growing fast. Creative Economy at global level was projected to grow by 5% per year and grow from USD 2.2 trillion to USD 6.1 trillion in 2020 next. In Indonesia Economic Creative posted notable growth in national economy, only trouble was that in Indonesia there was lack of Government support. Awareness among Government high officials in this regard was still low. The Government was still focusing attention on manufacturing, fiscal, and agro-business.

Mapping out of the Creative Industry by the Ministry of Trade in 2007 unveiled that the contribution of Creative Economy to national economy in Indonesia was seen in 5 main indicators, i.e. GDP, employment, number of companies, export and impact on other sectors.

Data of the Ministry of Trade had it that Creative Industry in 2006 contributed Rp104.4 trillion or 4.75% on the average of national GDP through 2002 – 2006. This amount exceeded contribution from electricity, gas and clean water. There subsectors contributing most were fashion [30%], handicraft [23%] and advertising [18%].

This sector also employed 4.5 million workers with growth level of 17.6% in 2006. This was way above growth of national workers which was only 0.54%. However, this industry only contributed 7% to export; in other countries like South Korea, England and Singapore above 30% on the average.

In the future creative economy was generally believed to be future prima donna of industry. There were 3 underlying reason for it: energy efficient, less dependency on natural resources, and promised higher profit margin.

The above factors were supported by massive Human Resources, although they still needed upgrading by quality. Today Indonesia’s population was around 251 million. People of 15-29 years of age numbered 40.2 million or nearly 18.4% - was a fat market for creative products.

The Ministry of Trade had schemed up long term plan development of the Creative Industry. The target was to increase contribution to GDP. In 2009 – 2015 was targeted at 7% - 8%. In 2002-2006 they contributed 6.2% worth Rp 100.7 trillion. Indonesia’s position was below that of England [7.9%], but better than New Zealand [3.1%] and Australia [3.3%].

The year 2009 – 2015 was mentioned as a phase of consolidation, contribution of the creative Industry to national export to become 11% - 12% while employment increased between 6% - 7%. The 2015 – 2025 period was a phase of acceleration, where contribution to GDP increased to 9% - 11%.

To develop Creative Economy was not as easy as imagined, due to obstacles emerging from the Creative Industry itself; not just in Government policy but also the businesspeople themselves.

They were rated as not having good entrepreneurship and bad management such as mixing company’s cashbox with personal pocket and recruitment of employees on the basis of friendship and no legal ground in regulating company’s ownership and profit distribution, so in case of company break up the industry would die. The business run by young entrepreneurs must be navigated with strong mentality and motivation since the very start.

Personnel upgrading through trainings in the Creative Industry must be promoted by the Government and schools, universities. Trainings in skill development and management was most important to support businessplayers in the Creative Industry.

It would be necessary to set up business associations for companies of the creative industry to promote innovations and creative among members. Art-based creative industry run by young entrepreneurs in Indonesia generated fresh energy amidst exhausted big industries in Indonesia today.

The handicap in Creative Industry was among others low awareness among Government officials of the potentials of the Creative Industry which brought forex reserves to national economy. The integrated policy needed would be among others to promote creativity among young Indonesian entrepreneurs and facilitate easy access for them to register their copyright of product to be mass produced and marketed.

This integrated policy would be applicable not just for small and medium industry like clothing but also for music industry and pure art: painting, handicraft, natured-based creative industry like bouquettes and flower arrangement, recycle of disposed materials and other small industry lines based on innovation and creativity. (SS)

Business New - July 4, 2014

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