Tuesday, April 16, 2024 | 15:12 WIB

Collaboration to Develop a “Creative Economy”

Jakarta, IO – A creative economy is defined as an economy that intertwines with economic, cultural and social aspects and interacts with technology, intellectual property and tourism destinations. The creative economy sector is also supported by multidisciplinary science and innovative policies, such as technology, in its development and implementation. In general, the creative economy is a sector that is notable for growing very significantly. 

In Indonesia, for example, on October 13, 2023 the Ministry of Tourism and Creative Economy/Tourism and Creative Economy Agency (Kemenparekraf/Baparekraf) noted that Indonesia’s creative economy managed to grow after the COVID-19 pandemic. In 2021, the creative economy expanded by 2.9% and skyrocketed by 9.49% in 2022. In fact, during the 2020 pandemic itself, creative economy growth was only -0.5%. The growth figure for the creative economy in 2022 was higher than that of pre-pandemic times or even 2019, which marked 3.9%. 

In 2022, the contribution to the national Gross Domestic Product (GDP) by the creative economy hit IDR 1,280 trillion. Nearly 100% of the total export value of creative economy products was contributed by fashion, culinary and crafts subsectors. A similar trend can be noted from January to June 2023, where the contribution to the export value of creative economy products from the fashion subsector reached USD 6.56 billion, while the culinary subsector contributed USD 4.46 billion, and the crafts subsector was USD 792.67 million. 

Not only does the creative economy sector provide a high economic contribution; it also absorbs a high quantity of labor, by workers with a high school education and below. As many as 54% of the workforce in the creative economy sector are high school graduates (SLTA), followed by high school graduates (SMA) at 38.8%, and 7.2% are diploma graduates or higher. The creative economy sector also employs more women (58%) than men (42%). 

Putu Rusta Adijaya
Putu Rusta Adijaya, Economics Researcher from The Indonesian Institute, Center for Public Policy Research

Although, in general, fashion, culinary and craft subsectors dominate in terms of exports of Indonesian creative economy products, this does not mean that other creative economy subsectors do not show growth prospects. The gaming subsector in the creative economy is another promising subsector. Based on the 2023 Reedser Analysis data from the Ministry of Communications and Informatics, around 70% of the Indonesian population has been exposed to games on various devices. 

In 2022, game users in Indonesia downloaded 3.45 billion online games. In 2028, Indonesia is projected to have 45.5 million online game users, signifying an estimated income for the business of USD 491.10 million or almost IDR 6 trillion. 

The Government has also taken the development of the gaming industry more seriously, through Presidential Decree 19/2024 on the Acceleration of Development of the National Gaming Industry, stipulated on February 12, 2024. The policy direction is to encourage a national gaming industry that adapts to culture, technology, creativity, societal innovation and the global economic environment, while globally competitive and generating new job opportunities, ones that support Indonesian arts and culture. 

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Unfortunately, developing a creative economy is not as easy as it sounds, due to various challenges. For example, Artificial Intelligence (AI), whose development has the potential to hamper human creativity, can ultimately impair innovation, stifle art and discourage authentic new ideas from humans. Infrastructure and human resources in technology are not proportionally fair. Lastly, the protection of intellectual property rights (IPR) still needs to be strengthened by the Government. 

To overcome the above challenges, the Government can take several measures; for example, strengthening cooperation and collaboration between the Ministry of Tourism and Creative Economy and associations and companies in the creative economy subsector, providing incentives to financial services institutions that contribute to developing the creative economy subsector, in collaboration with the Financial Services Authority (OJK), providing training to MSMEs in general and women-owned MSMEs in particular, and strengthening and fostering intellectual property rights regulations so that the public and MSMEs working in the creative economy industry feel safe and protected with legal certainty.