Assessing Indonesia’s government-led creative transformation
By Erich Renz
Erich is an interdisciplinary Master of Creative Industries student at Popakademie Baden-Württemberg (GER) and Queensland University of Technology (AUS).
In recent years many developing countries have recognized the challenge of embracing creativity in the arts and innovation in business. The case of Indonesia is significant, firstly because the nation is a young democracy, and secondly because the central government is taking an active development role. Like many other countries in Asia, however, the term creative economy is hierarchically managed and aligned to economic improvements rather than furthering pluralism. In effect the government has taken the master template from the UK’s Department of Culture Media and Sport and adapted this to local conditions. Along with this cultural borrowing come high expectations.
In October 2011, an Indonesian cabinet reshuffle led to the establishment of the Ministry of Tourism and Creative Economy, headed up by former Minister of Trade Mari Pangestu. Minister Pangestu was in charge of aligning the development goals of the tourism industry with those of the creative industries. However, the newly elected president Joko Widodo subsequently changed the name of the back to Ministry of Tourism, omitting the term creative economy. Mari Pangestu was then replaced by Arief Yahya, the former CEO of Indonesia Telecommunication Company, the company behind a large development project called Bandung Digital Valley.
The main task of the former Ministry of Tourism and Creative Economy was to attract international visitors to Indonesia’s cultural heritage, represented primarily by culinary businesses, domestic fashion and indigenous craft. The government’s focus on tourism is diversification of the economy. Spending by foreign tourists has not only flowed into creative products and services but to provinces for regional development.
While the creative economy idea has not been dispensed with it is currently unclear how it will be reframed. Suggestions are that a separate agency will be formed although some believe that the creative economy is too big an idea for an agency to manage. The former hybrid Ministry (of Tourism and Creative Economy) managed two industries that mutually contribute 12% to GDP and deploy a workforce of 16.9 million inhabitants out of a total labour force of 119 million.
According to government estimates the contribution of the creative industries to the nation’s total income totalled US$ 58.8 billion in 2013, an increase of 9 per cent over the previous year. Of course, like other countries that have embraced the creative economy concept these figures need to be put into context. Much of the value comes from fashion, craft and tourism related sectors, the latter not regarded as creative industries in the original template put forward by the UK’s Department of Culture Media and Sport.
The role of the former hybrid Ministry was to promote exports from craft sub-sectors including native handicraft, batik clothing and rattan and timber furniture through exhibitions, publications and websites. Other actions included financial support to micro, small and medium enterprises in the fashion industry for the purchase of acquiring machinery and raw materials such as hemp, silk, banana and pineapple fibre. By harnessing such natural resources the government assisted local designers to shape uniquely Indonesian brands for the global market. This is the case of Bagteria, a boutique bag producer that has achieved a measure of international success. The company makes use of traditional craft and embroidery patterns.
Fashion shows like the Jakarta Fashion Week serve as a promotion platform to activate collaborations with western designers. Such regular events are also designed to leverage bilateral trade.
Elsewhere Indonesian companies have collaborated with Sweden in the export of furniture and crafts. In response to this a Swedish Trade Council was established in Indonesia to further nurture international trade relations. To effectively realize export potential, the fast growing advertising sector is assisting in exposing Indonesian products at home and abroad.
As many developing countries have realised combining the cultural appeal and economic importance of tourism with the creative industries nurtures new value chains. In doing this it stimulates job
creation; it allows more local people to get involved in regional development either by setting up suitable infrastructure and transportation systems for yet unexploited tourism areas or through
certifying tourism professionals in water sports, marine tourism and diving. It is worth mentioning here that Indonesia has the world’s largest coastline with an archipelago of over 17,000 islands. Also high-ranking on the governmental creative economy agenda are cultural parks, considered
appropriate venues for local dance performances, indigenous art and traditional handicraft. In order to perform on a professional level and to stand out in Asia’s competitive tourism market, regions with such cultural heritage assets are in need of skilled personnel.
Developing creative cities
The Indonesian government has directed considerable effort and research into the development of future creative cities. The aim is to distribute tourism, creative and digital industry clusters throughout the country as effectively as possibly. Currently, Indonesia experiences high tourist concentrations in Bali and Greater Jakarta. These two hot spots show increasing potential as business hubs. In fact, so-called MICE (Meetings, Incentives, Conferences, Exhibitions) tourists spend five times more than leisure tourists during their stay in Indonesia. One strategy to redistribute visitors throughout the country is the start of direct flights from Bali to other tourist destinations (Java, East Indonesia). The government hopes that this approach will produce a domino effect, resulting in novel tourism clusters in other provinces.
To bring about greater regional diversity and attractiveness for entrepreneurs, the government is fostering the transition of cities such as Bandung, Semarang and Yogyakarta from heavy industry into knowledge-intense zones. This creative transformation aligns with Richard Florida’s well known prescription that city growth strategy needs a ‘people climate’, one that aims at ‘attracting and retaining people, especially, but not limited to, creative people.’
According to Florida knowledge-based workers, and in particular high-tech workers, can unleash the economic potential of cities. The development of high-speed broadband, widening international business relations, and a rise in education standards have all paved the way for a flourishing IT sector in Indonesia. This can be seen in a vigorous social media market (Indonesia is ranked on a global scale no. 2 on Facebook and no. 3 on Twitter). Third party applications, tailored advertising solutions and software engineering are the main developments in recent years.
Due to Bandung’s urban transformation, a 700-hectare Silicon Valley-like technopolis has evolved as a blueprint for other Indonesian cities. The appointment of Ariel Yahya, the former Telecommunications head to a central post is certainly significant and Bandung’s aspirations to extent mirror creative technology projects taking place elsewhere in Asia. The Bandung City mayor Ridwan Kamil, a former architect, has been instrumental in driving many changes in the city. Currently, several creative projects are ongoing in Bandung such as the Creative Kampong (Village), and Bandung Creative City Forum. The central government in tandem with provincial administration has taken into account thriving entrepreneurialism not only in the fashion industry but also within the IT sector. State-owned banks are therefore directed to lend more to creative entrepreneurs and small businesses, as well as improving funding.
With a view to attracting and retaining creative talent the government has prioritized intellectual property rights. They hope this will protect aspiring entrepreneurs from predatory exploitation. According to commentators such as Florida, patents are a crucial factor in regional innovation. Another great challenge is the reduction of software piracy.
Looking at Indonesia’s political efforts to accelerate its creative industries, one can appreciate how the DCMS model was selectively adopted from the UK. At the moment it is unclear how the creative industries will be integrated into the new ministry structure. For a nation like Indonesia, which is rapidly modernizing while retaining elements of tradition, the creative industries offer a template to change the structure of industries and the mindset of populations. Whether or not it will contribute to a more robust democracy however remains unclear.
Image:Pasupati Bridge in Bandung, from Wijayanto Budi Santoso