Challenges of the Indonesian Creative Economic Agency In Managing the Creative Economy Sector

(Prepared by Agung Cahaya Sumirat, Patrick Hasjim and Priadji for Sesparlu-54 Group Blog #7)

Source pic: http://detiklgminews.co

At a glance, creative economy seems to be a new word to many of us.  Indonesia has in fact already had a projection on the concept of this creative economy. The establishment of Ministry of Tourism and Creative Economy in 2011 was the first signal of the Indonesian Government’s recognition to the importance of a creative economy. As years pass, the new government of President Joko Widodo has established the Indonesian Creative Economy Agency or Badan Ekonomi Kreatif (Bekraf) since 2015. This article wishes to explore the Indonesian creative economy that the Bekraf must manage and provide recommendation afterwards.

Bekraf’s Mandate

Bekraf’s vision is to make Indonesia a world leading power in creative economy in 2030. Bekraf tasks are to formulate, establish, coordinate and synchronize policy in the field of creative economy. The scope of creative economy among others includes application and game developers, architecture, interior design, visual communication design, product design, fashion, film, animation, and video, photography, crafts, culinary, music, publishing, advertising, performing arts, visual arts, and television and radio.

Bekraf has set up priority programmes such as the establishment of ICINC (Indonesian Creative Incorporated), Creative Economy Ecosystem across Indonesia, and Indonesian Creative Design Center (ICDC); the creation of Indonesia’s as center of the world Moslem fashion in 2016; Coding Mum Project as a training for household wives to become coder/programmer; and alternative screen for Indonesian film production.

Trends of Creative Economy

Creative economy contributed 7.1% of the GDP and  absorbed up to 12 million workers based on the data of 2014. This means that creative economy has a strategic potential to contribute to the poverty alleviation and job creation.

One of a good case of creative economy which has elevated the local economy is Kasongan, a village near Yogyakarta. Kasongan is known for its ceramics industry since early 1970s. It not only manufactures products like pots, masks and sculptures for the domestic market and export abroad, but also has become a cultural destination, where tourists can visit the workshops, discover the extraordinary variety of ceramics exposed in family workshops and buy souvenirs.

In addition to that case, Indonesia has much social economic capital for promoting creative economy. We have a prospective demographic bonus. Around 50% of our 250 million population is young people aged under 30 years old. With continued education upgrading programme, the Indonesian youths would be more creative, skillful and knowledgeable in driving the creative economy. Around 80 million of Indonesian middle class possesses strong purchasing power.

Likewise, the digitalization of our society has strengthened the platform for blossoming online creative economy process. The rapid development of IT-based start-up businesses in transportation businesses such as Go-jek, Grab Bike, Grab Taxi, Uber, Blue-Jek and Lady-Jek have made our life totally changed. The multi-dimensional services that they offer seemingly unthinkable before but this is a real happening now. Thousands of GoJek drivers now have enjoyed a significant income rise. On the other hand, the customers are happy with their multiple services at much lower costs.

Alternative Room for Improvements

There are several options that the Government needs to take in optimizing potentials for the Indonesian creative economy among others are:

1. Bekraf needs to build a roadmap and develop coherent development strategy and give guidance as well as support to all stakeholders of the creative economy. It must also strengthen communication and coordination with various State Ministries (including the Indonesian Embassies), Non-Governmental Agencies, local authorities and other relevant parties;
2. Bekraf needs to scout, open auditions, gather talented individuals with creative resource or skills, and promote them to become globally recognized. It is an opportunity to potentially create wealth and jobs;
3. The need to promote the high quality of film production. This film market is still under developed. In Korea for example, film’s budget is included in the state budget, for they consider films as locomotive of other sub-sectors, such as fashion, music and gastronomy. As a package, we need to intensify movie screening programme of the films in remote and isolated places;
4. There is a need to promote new and comprehensive legislation on promoting of as well as give a stronger legal basis for creative economy.
5. The Government should continue enhancing digitalization programme for wider population particularly providing as much as internet access in order to prepare conditions for the optimalization of online type of creative economy.

Conclusion and Recommendation

There is an enormous potential in cultivating the creative economy, but on the other hand  there are challenges to develop this prospective sector. To improve this, based on the options above, we would suggest that there are three most urgent steps the Government needs to do. First, the Bekraf needs to establish a clear roadmap for the promotion of the Indonesian creative economy. Second, the Bekraf needs to enhance communication and coordination among governmental agencies and other stake holders to focus on the work of creative economy. Third, there is a need to promote new and comprehensive legislation for progressing the creative economy so that it will lure investment and encourage those business communities involved in the creative economy.

Jakarta, 4 April 2016