Creative Industry Development

Strategy
Togar M. Simatupang
School of Business and Management
Bandung Institute of Technology
15 July 2010
 Overview
• The rise of creative industries in South East
Asia
• Cases:
Creative Industries National Mapping Project
Creative Industries in West Java Province
Creative Industries in Bandung
Creative Industries in Jakarta
• Concluding Remarks

2
The rise of Creative Industries in South
East Asia
Thailand
 Thailand has just stated its desire to be
the creative centre for SEA. It has
allocated around USD 500 million to a
“Creative Thailand” project strategy, and
plans to set-up a Creative Economy office
to facilitate the implementation of the
project.
 Targeting value of Thai digital content
worth up to 30,000 mil. Baht by 2010, and
positioning as “Digital content and
multimedia education hub in Asia Pacific”
 It aims to raise the creative industries
value from 12% to 20% of GDP by 2012.
Singapore
 The creative industries are one of the
fastest growing sectors on the island. From
1986 to 2000, the sector's growth was
13.4%, outpacing overall economic growth
of 10.6%. In 2008, Singapore's creative
industries made up 5.6% of GDP, and
employed more than 172,000 employees.
 Singapore has invested more than USD 120
million to facilitate its goal of raising the
share of creative industries to 6% GDP in
2010.
 New Asia Creative Hub in 2012: a
Renaissance city (Arts and Culture), a Global
Cultural and Business Hub for the Design
(Design), and a Global Media City (Media)
3
The rise of Creative Industries in South
East Asia
Malaysia
 The government has set aside a budget to
the tune of some USD 50 million for the
development of the creative multimedia
sector. It has also recently increased
funding for the sector and has initiated a
special program called the MAC3 or the
Multimedia Creative Content Centre which
provides funding for co-production
opportunities for animation, games and
visual effects development.
 Malaysia’s creative industries GDP
contribution stands around 1.5%.
Philippines
 The Philippines launched its Creative
Industry Development Strategy in 2005. In
the same year, the creative industries
contributed around 5% to the GDP and
accounted for 11% of the country’s labor
force.
 In its effort to boost the contribution of
the creative industries, the government
has plans to establish a Creative Industries
Office, under the care of the Department
of Trade & Industry, with an estimated
fund of USD 500 million.
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The rise of Creative Industries in South
East Asia (SEA)
Indonesia
 Year 2009 has been declared as “Creative
Indonesia Year” in Indonesia’.
 Year 2008 was also the year Indonesia’s
President launched “Indonesia Creative
Economy Development Blueprint 2009-2025”
and the “14 Sub-sector Creative Industries
Development Blueprint 2009 - 2025”.
 In 2008, the Indonesia Game Catalogue was
launched, providing a database of the country’s
game and animation developers.
 In 2007, the Creative Industries National
Mapping Project was published. Indonesian
creative industries mainly serve its sizeable
domestic market although some sub-sectors are
already exporting creative goods and services
abroad. Creative industries contributed 6.3% to
Indonesia's GDP in 2008.
Vietnam
 Vietnam is a country with a long tradition of drawing
and painting. Vietnam boasts 54 ethnicities living
across the country.
 Investment in culture accounted for 0.3% of GDP.
People in Vietnam read about 50 books a year on
average.
 Built up Creative Entrepreneur Networking in Ho Chi
Minh City, a leading city in the creative industries in
Vietnam.
 Creative economy in Vietnam might include media,
movies, fine arts, advertising, publication, printing,
animation, photography, other cultural services.
 Beginning in 1991, Vietnam became a heaven for
overseas animation studios as a unique capability for
producing high-quality animation such as Hanoi
Cartoon Studio and Pixi Vietnam.
 Cultural and sports activities accounted for only 0.55
percent of the total value in 1995 and 0.44 percent in
2008.
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Source:
http://www.synovate.com/businessconsulting/insights/periscope/issues/200912/
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8
Creative Industry Development

9
 How to develop productive and creative
community?
Potential Creative
Talents Community
Talented
People
Training & Creative
Experiments Workers
Creative
Creative-preneurs
Skills
Business
Skills
Business
Network

Creative
Education10
 A “Sense of Place”: What Defines it?
• The Look of a Community

• The Feel of a Community

• The Development of a Community

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 CASES
 Creative Indonesia:
Creative Industries National Mapping Project
(National Level)
 Creative West Java:
Creative Industries in West Java Province
(Provincial Level)

 Creative Jakarta:
Creative Industries in Jakarta (Provincial and
City Level)

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Reasons for Developing the Creative
Economy

13
 Why is the Creative Economy important?

Economic Contribution Business

Employment creation Demand Shaping & Creation

Welfare Critical Input
Income Entrepreneurships
Foreign Exchange

Social Impact

Identity Human Development

Why is the creative Quality of Life
Cultural Heritage Economy important
Cultural Development
Values Preservation
to Indonesia?
Meaning and Ideology
Image
Promotion
Tourism
Innovation & Creativity National Icon
Communication
Value Creation
Problem Solving Ideas
Creativity Discussion Forum
Innovation System Policy
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 MENGAPA EKONOMI KREATIF
1. Economic Contribution
United Kingdom:
7.9% GDP from
creative industry.
Annual Growth 9%
New Zealand:
3.1% GDP from
creative industry
Australia :
3.3% GDP from
creative industry
Annual Growth 5,7%

Indonesia
6.3% of GDP from Creative Industry
Rp 104.73 trillion or
US$ 10,5 billion
15
2. Business
 Number of creative enterprises in 2006 was
2,188,815 companies.
 Creative industries affects other sectors:
 The highest output multiplier given by Film,
Video and Photography is 2.21
 The biggest backward linkage coefficient is
given by Music as 2.15
 The biggest forward linkage coefficient is given
by Publishing and Printing as 7.52

Number of Creative Business in 2006

16
3. Image and Identity
Culture
Tourism and
Heritage

Human
Government
Resources BRANDING

Investment
Exports &
Immigration

The improvement of Product Image

Indonesian Creative
Products and Services Service Image
indicates the
competitiveness of
Indonesian Culture
Indonesia 17
 4. Renewable Resources
Based on knowledge, creativity, and technology
ideas Innovation
Creative industry stems from human creativity. Contrast to
other industries which are based on physical resources,
creative industry is capitalized on creative ideas, talent, and
skills. Ideas are renewable resources. Inspiration Action

x Green Community (less waste,

creating employment)

x
• Design intensification reduces the
exploitation of natural resources.
• Getting creative workers close to
material supply (villages) would
ease the emergent of production
cluster on the village scale, the
economy of village would grow
and prevent urbanisation.
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5. Innovation and Creativity
Ideas and Intellectual Properties
The output of Indonesia patents is low. The development of the creative
economy will encourage increases of patents, copyrights, brands, local
design, and business recipes.
Radio Kayu-Singgih

New Value Creation

Innovation is presenting products and services to the market. Innovation can be
happened by combining existing technology to produce a marketable product. For
example, all technologies in iPod belong to third parties, but Apple was capable to
integrate them to be a new product with new value.

Savings in Investment and Time

Design needs less investment and shorter development time compared to the manufacturing sector. In average,
Korean companies spent 400 million won (US$ 429,830) to develop a new technology, meanwhile design related
projects in average spent 20 million won (US$ 21,492) with the completion time is maximum 9 months.

19
 6. Social Impact
Quality of Life
Creative for Development increases quality of life (well
being).
Labours
Creative workers in film, music, interactive games,
computer services and software, and research and
development generage better incomes above the Creative Workers

everage income of other sectors.

Social Cohesiveness
The concentration of creative workers indicates
economic dynamics and healthy, maget for
investmentes, and better job opportunity.

Creativity based Cultural Heritage

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National Creative Mapping Projects

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 Chronology of Indonesia Creative
Economy
Rebirth of Indonesian Film
Industry since 2000. There
are approximately 40 to 50
films released each year
compared to around 100
films 15 years ago.
The first Trade Expo
Indonesia in 1986 as
Resource Indonesia
Exhibition
"Let us develop a creativity-
Road Map Indonesia Design The Season of
based economy by putting Indonesian Cultural
Power 2006 - 2010
together ideas, art, and
was launched on 13 July Heritage & Craf, 4-8
technology. We can do it, we
2006 June 2008
must be able to compete with Presidential
by The Indonesian Ministry
other nations in developing this Instruction Number 6
of Trade, Ministry of
creative economy“, Yudhoyono on Creative Economy
Industry and Ministry of
said in a speech to open the Development dated 5
Cooperation & SME which is
Indonesian Cultural Products August 2009
aimed to redesign and
improve creative products. Exhibition on 11 July 2007.

Indonesia's Music 2006 British Council The 2007 Indonesian Development of

Industry grew International Young Creative Industry Study: Creative Economy
significantly since Creative creative industries Indonesia 2025 to
2000 Entrepreneur (IYCE) contributed an average further develop the
6.3% to Indonesia's GDP emerging creative
between 2002 and 2006. industries. Yudhoyono
Two Indonesias films, Berbagi
announced on 20
Suami (Love for Share) directed
Indonesia Creative January 2010 that
by Nia Dinata, and Serambi
Week 2009, 25 - 28 he would establish a
(Aceh and Tsunami aftermath,
June 2009 National Innovation
the movie) directed by Garin
Committee.
Nugroho, are on the go to be in Afer National
one of the worlds outstanding Mapping Project
film festival, the Cannes Film
Festival, held in France, on 17th- 22
28th May 2006.
 The 2007 Creative Industry National
Mapping Project
Purpose
• The provision of rapid quantitative mapping of creative industries in Indonesia to support evidence based policy development in
stimulating and nurturing Indonesia’s creative industries.
The Findings. It's bigger than we knew!
• There are 14 such industries formally recognized by the government: music and musical instruments, advertising, architecture, art and
antiques, craft, design, fashion, film, video and photography, interactive games, performing arts, printing and publishing, computer services
and software, and radio and television.
• Indonesia's creative sector presently comprises around 2.5 million companies, 1.3 million of which are in fashion, 900,000 in craft, 200,000
in graphic design and some 25,000 in other areas, according to data from the Trade Ministry.
• Over the 2002 to 2006 period, the creative sector contributed an average 6.3 percent of the national GDP, equivalent to around Rp 104.68
trillion (US$ 10.5 billion), absorbing some 5.4 million workers and ranked fifth among the Indonesia's top export commodities.
• Creative industry exports were worth an average Rp 70 trillion (US$ 7 b) over the same period, with a peak in 2006 of Rp 81.5 trillion.
Project Background
• Indonesia has great potential to become a creative nation because Indonesia is rich in culture and ideas, has a large pool of creative and
artistic talent, and a large domestic market.
• The strong point owned by Indonesia in the global market competition is the wealth of natural and human resources that are available to
be developed in the creation of superior products that are able to penetrate markets.
• The issue of measurability and performance statistics for the Creative Industry is absolutely critical. Without accurate, timely data it is
impossible to be sensitive in tracking the success or failure of Indonesia’s creative industries.
• The Creative Industries National Mapping Project is a research project to develop and publish a range of accurate and timely measures of
the Creative Industries in Indonesia. The national mapping project was funded by the Trade Ministry.
Project Components
• Rapid map the size, scope, and structure of creative industries in Indonesia through quantitative mapping and statistical definitional
collection processes including economic contribution of creative industries in Indonesia.

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 Proportion of Contribution to the total added value of Creative Industries
Creative Industry are “those activities which have their origin in individual creativity, skill and talent, and which
have a potential for wealth and job creation through the generation and exploitation of intellectual property”.
(UK Creative Industries Task Force, 1998).

Advertising Interactive Game

(7%) (0.3%)

Architecture Music
(3.2%) (3%)

Art & Antiques Market Performing arts

(0.6%) (0.1%)

Crafts Publishing & Printing

(28%) (3.5%)

Design Research & Development

(7%) (1%)

Software & Computer Service

Designer Fashion
(1%)
(44%)
Film & Animation Television & Radio
(0.3% (2%)
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Source: the Ministry of Trade Republic of Indonesia (2009)
Follow up work to support implementation
of the creative economy (1)
• The 2007 Indonesian Cultural Product Exhibition:
– There were 17 categories ranging from craft to batik designers.
– This event facilitated more than Rp 16 billion in sales and contract deals and received around 27,000
visitors.
• The four-day Indonesian Cultural Product Exhibition at Jakarta Convention Center in 2008:
– At least 20 potential investors, including a Japanese-institution, have engaged in advanced talks with
the company
– There were 38 with new categories including animation, painting, graphic design and multimedia.
– The exhibition was expected to receive 30,000 visitors and stimulated transactions worth around Rp
20 billion.
• The government (2008), through the Trade Ministry, was attempting to stimulate the economy and create
jobs through an extremely comprehensive plan, "Development of Creative Economy Indonesia 2025". The
government should provide a conducive legislative and regulatory environment to nurture the
development of alternative funding solutions such as venture banks, venture capital, venture leasing,
mezzanine financing and angel investors to develop the creative industry sectors.
• The road map is aimed to guide the creative industries, encourage people to be more actively involved in
creative industries and help drive the national economy. The road map defines existing opportunities and
ways to tackle challenges in the industry, including the lack of awareness, to improve creativity in schools
and accelerate domestic and export growth.

25
Follow up work to support implementation
of the creative economy (2)
• Trade Minister Mari Elka Pangestu (2009): the country’s emerging creative industries need
support from banking and non-banking institutions (e.g. venture capital) to flourish, the
protection of their intellectual property rights, promotion, and development of Indonesia’s
human resources to compete with similar industries in other countries.
• The 2009 Indonesian Creative Product Exhibition (http://www.indonesiacreativeproduct.com/):
Celebrating the “Indonesia Creative Year of 2009”, The Season of Indonesian Creative Products
2009 present the latest innovation in the fast-growing creative industries.
• Copyrights issues. According the data of Indonesian Society of Singers, Composers and Musical
Arrangers, piracy triggered lost of tax income for the country worth 1 trillion rupiah (about 100
million U.S. dollars) while the loss suffered by artist and producers reached 2.5 trillion rupiah
(about 250 million U.S. dollars).
• Creative Indonesia Digital Plan: Digital Creative Industry Activation Roadmap 2009-2010
• Presidential Instruction Number 6 on the Creative Economy Development dated 5 August 2009.
• Development of Prominent Creative Cities in Indonesia.
• Yudhoyono announced on 20 January 2010 that he would establish a National Innovation
Committee.

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Typical Problems faced by creative
industries in Indonesia

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 Vision and Mission of the Creative
Economy in 2025
• Vision:
on
Our vision is that “Indonesia is respected as a creative nation
in the world”.
• Mission:
ion
To empower Indonesian human resources to participate in
the national development program:
 Increase contribution of creative industries to national GDP,
 Increase exports based creativity with local and Susilo Bambang Yudhoyono
contemporary content,
 Crete job opportunities of the creative sector,
 Increase the number of creative enterprises,
 Prioritize to use renewable resources and sustainability,
 Create economic value creation based on cultural wisdom
and cultural heritage,
 Develop creative clusters in Indonesia regions,
 Enhance creative image to Indonesian products and services
as a ‘National Branding’ in the international arena.

Mari Elka Pangestu

Source: the Ministry of Trade Republic of Indonesia (2009) 28

 Model of Development
Spinning of
creativity, “The Triple Helix”
innovation, and
commercialization
Academia Business Government

Intermediary
Technology

Resources

Institution

Financial
Industry
Society People

Society • Three main actors involved in creative industries:

– Academics who drive the advancement of science & ideas as
creative resources and educate creative human resources.
– Business are enterprises which transform creative into
products and services with economic values.
– Government are agencies as facilitators, regulators,
consumers, investor, and urban planner that make creative
industries grow and sustain.
• Plus: Creative Communities, Philanthropies, and Mass Media

Preparation Stage 2008-2015 Acceleration Stage 2016-2025

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PROGRESS INDICATORS

Source: the Ministry of Trade Republic of Indonesia (2009) 30

Creative Cities

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 The Province of West Java
• The West Java Trade and Industry Agency has designed a business strategy to develop creative
industries in order to increase revenue for the province.
• Head of the agency Agus Gustiar said the strategy specified several steps prepared by the provincial
administration to boost the growth of 15 creative industries between 2008 and 2013.
• The 15 creative industries are inclusive of the advertising, architecture, design, art and antique
markets, fashion, music, performing arts, publishing, software and computer set services, TV and radio
roadcasting, games, animation, photography, research and development, and culinary sectors.
• The administration was in the process of recording data on all creative industries in the province in
order to prepare a strategy to improve their product quality so that they could compete with other
markets.
• In the short-term, the administration will hold exhibitions for creative industries annually for the next
five years.
• It also plans to streamline the process for entrepreneurs to get licenses to start or develop businesses.
• The administration had facilitated all creative industries in the province in registering intellectual
property rights for their products.
• Creative Industries contributed around 7.82% (Rp 20 trillion or US$2 billion) of the West Java regional
income in 2005 (the first mapping project).

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 Bandung Creative City
• Celebrating 200 years of Bandung City: 25 September 1810 - 25 September 2010
• The province's capital, Bandung, started developing creative and innovative
industries in the early 1990s without the assistance of the administration.
• Now, Bandung's creative industries - with the fashion industry leading the way,
absorb 30,000 workers, have launched 400 brand names, and reap a combined
monthly revenue of up to Rp 25 billion (US$2.7 million).
• Bandung's creative fashion industry products have markets in Malaysia, Singapore,
Australia, Europe, and the United States.
• Distro (short for distributor outlets) have been pioneered by creative professionals
from Bandung. There are estimated to be around 1,500 distros across Indonesia,
managed by the young and creative, some of which have total revenues of up to
US$ 100,000 a month.
• The British Council named Bandung one of the top 12 creative towns in the world.
• Creative Industries contributed around 10.6% (Rp 5,35 trillion or US$ 535 million) of
the Bandung city income in 2007 (the first mapping project).

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BANDUNG CREATIVE CITY

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JAKARTA CREATIVE CITY

35
 The first mapping project:
Creative Industries contributed around 15.5% of the Jakarta city income in 2007
(Rp 89.6 trillion or US$ 8,9 billion)

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Jakarta Creative City

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Collaboration

38
 The Importance of Collaboration
• The data source of Rapid mapping is often from Statistics Indonesia (Badan Pusat
Statistik). Interviews from associations and communities were carried out to reveal
size and economic contribution of creative industries.
• Collaboration is not only important in mapping projects but also for developing
creative industries. Most creative programs were launched and implemented based on
collaboration.
• Indonesian Animation and Content Industry Association (AINAKI)
(http://www.ainaki.or.id/):
– The industry still needs a lot of government support, such as tax breaks and copyright law education.
• Indonesian Chamber of Commerce and Industry
– Roadmap of Indonesia Economy Development 2009-2014.
• Collaboration the British Council with Indonesia’s Forum Graphic Digital to map the
economic potentials of the print and graphic industry, which encompasses such high-
flying sectors as advertising, graphic service, packaging, the press, printing and
publishing. Initial results were published during the Biannual Digital Graphic Forum
Expo in August 2007.

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British Council Creative Industries
Program 2006-2011

40
 Example of Collaborative Work: International Young
Creative Entrepreneur (IYCE) Design Award 2009
The Program
• The British Council is seeking the next young DESIGN ENTREPRENEUR to represent Indonesia at the IYCE
Award competition in London.
• The IYCE competition rewards the entrepreneurship of young people who made art and creativity the most
important industry of the 21st century.
• Follow on the footsteps of Indonesia’s Design champions Ridwan Kamil (2006) and Gustaff Iskandar (2007).
Supported by
Kamar Dagang dan Industri Indonesia | Departemen Kebudayaan dan Pariwisata Republik Indonesia
Education Partner
Universitas Bina Nusantara
Association Partners
Arsitek Muda Indonesia | Asosiasi Penyelenggara Jasa Internet Indonesia | Bali Creative Community |
Bandung Creative Entrepreneur Network | Common Room Networks Foundation | Desain Grafis Indonesia
| Forum Desain Grafis Indonesia | FGD Forum | Ikatan Arsitek Indonesia | Indonesian Interior and
Architectural Space Resource Center | Indonesian Visual Art Archive | Indonesia Young Entrepreneurship |
Masyarakat Industri Kreatif TIK Indonesia | Persatuan Perusahaan Periklanan Indonesia
Official Media Partners
90.4 Cosmopolitan FM | 101.4 Trax FM | O Channel | Detikcom

Source: www.britishcouncil.or.id
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 Historical Pathway

25-27 June 2009

23-26 June 2010
?
• “Triple Helix Model for
Developing the Creative
4-6 June 2008 Economy"

• Celebrating the “Indonesia

Creative Year of 2009”
• “Culture and Technology as
• “Cultural heritage inspires the bases for developing the
11-15 July 2007 awakening of the creative Indonesian Creative Economy”
economy”
• Implementation of the blueprint
• Launching of the blueprint of the of the Indonesia Creative
Indonesia Creative Economy Economy

• “Diversity of Indonesian Cultural Products

for the world"
• Starting point of the Government support
to the development of the creative
economy
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Source: the Ministry of Trade Republic of Indonesia (2009)
 Concluding Remarks
• The creative economy (CE) emphasizes on human creativity and innovation that drive value
creation in products and services. Creativity cultivates on cultural heritage of society and
creative talents of people.
• Every city has its own uniqueness in creative talents and entrepreneurship. The creative
industries project mapping is the first step in revealing the potential for development.
• The mapping should be a part of a visionary roadmap to nurture and develop creative people
and industries.
• Leadership plays a key role in the development of the creative economy. Government
leadership is vital to the development process, especially in South East Asian countries.
• Leadership is important to inspire and maintain the continuation and investment of the
creative programs.
• The stakeholder approach should be applied when dealing with the creative clusters
comprising of creative industry value chain, education, innovation system, tourism, local
culture, mass media, and creative communities.
• The creative industries mapping project is not only about economic contribution of creative
industries but should be extended to include mapping of culture and arts, talents, creative
industry ecosystem, creative professionals, and creative education.

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Thank You

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