Interview: Triawan Munaf
How can the creative economy be strengthened in order to reach foreign markets?
TRIAWAN MUNAF: The creative economy is robust, contributing approximately 7.4 percentage points to GDP and employing around 25% of the total workforce. Regionally, Indonesia’s creative economy derives its strength from its vast population of 265m, with 60% of the population under the age of 40. Home to 17,000 islands, and more than 1300 ethnicities and over 700 spoken languages, Indonesia’s diversity is at the core of its creative economy. Generally speaking, the foundations of the economy are small and medium-sized enterprises (SMEs). The majority of SMEs are contained within the industries of food, fashion and craftsmanship. Moreover, with the world’s largest Muslim population, Indonesia also boasts the world’s largest Muslim fashion market. Due to this diversity, we have a wealth of culture to offer.
Our rich cultural offering is the foundation of all our creative industry products, whether these be in film, fashion, music or art. For instance, the Dangdut music market is spread across the Pantura region, located on the northern coast of Java Island, which is a hub of economic activity. Local artists have to produce at least 20 songs a month to fulfil market needs. This example illustrates the key challenge to accelerating the potential of local content distribution. As another example, the Indonesian gaming industry is worth Rp10tr ($709m). However, less than 3% is derived from local content. Data from e-commerce platforms Tokopedia and Bukalapak further indicate that only 10% of products sold are local products. We therefore need to create a better ecosystem to distribute Indonesian cultural content. To do this, it might be suggested that we follow the South Korean K-Pop example. However, South Korea’s culture is different to Indonesia’s and this would not be an entirely suitable model. Essentially, this is because South Korea’s main objective is to tap into a global market, rather than to create a product to reflect its culture, whereas our objective is to create something that is unique and ensure that we can improve content distribution.
What steps can be taken to accelerate growth of the country’s creative industries?
MUNAF: We can diagnose the creative industry ecosystem with six shortcomings that need to be addressed. The greatest challenge for SMEs in the creative economy is securing capital injections to fund their ventures. Since this is not a commodity industry, we must ensure popularity of products in order to bring capital into the industry. This directly relates to the second step in accelerating growth of the industry: using research and education more effectively. To do this, BEKRAF’s research and education department could collect a lot of big data on the market and the consumer base. These findings could then be analysed to identify gaps in the market, which we will match with consumer demand and thus ensure that the products we create fit the needs of consumers. Third, it is crucial that digital infrastructure is improved; across Indonesia, many creative players do not currently have access to the infrastructure required to create prototypes which help tap into the market effectively. In this regard, the digital domain refers not only to the internet, but also to the provision of an appropriate platform. Fourth, marketing of cultural content has to be done on both a national and global scale. Fifth, the process of intellectual property (IP) registration must be streamlined. Currently, around 4000 IPs are registered annually through our agency for the national market. However, many micro-, small and medium-sized enterprises lack the resources for IP registration, since the process is neither time, nor cost efficient. Lastly, the presence of inter-agency relations is crucial because our agency is only based in Jakarta and local governments often do not have specialist units that are dedicated to the creative industries.
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