Opportunities in the Midst of a Pandemic

KOMPAS/ADITYA PUTRA PERDANA

Waste-based works are exhibited at the Semarang Creative Hub, Semarang City, Central Java, Saturday (13/3/2021). The Semarang Creative Hub, which is a creative economy forum for Semarang youth, was inaugurated on Saturday by the Minister of Tourism and Creative Economy, Sandiaga Salahuddin Uno.

The creative economy was in the midst of a recession in the world in the early 1990s. Now, its ability to support the economic recovery is awaited again amid the downfall of the global economy due to the Covid-19 pandemic.

The creative economy was identified by Australia and the UK when the two countries experienced an economic downturn in 1990 and 1991. The early 1990s were the toughest period of the Australian economy, as the unemployment rate reached 11 percent.

The Australian government then formulated a policy package called Creative Nation in October 1994. That was the time the term "creative economy" was introduced to the world.

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The policy included development in the economic and cultural fields. At the time, the Australian government considered that there was a large potential in cultural arts that could be developed after the industrial sector collapsed, followed by a high unemployment rate.

The development of the creative economy not only helped Australia step back from the brink of recession at the time, but it has strengthened the economy until this day.

Then-Australian prime minister Paul Keating injected about US$250 million to boost the productivity of arts and culture. The development of the creative economy generated state revenues worth $13 billion a year. In addition, the creative economy opened job opportunities for 336,000 people.

The development of the creative economy not only helped Australia step back from the brink of recession at the time, but it has strengthened the economy until this day. A report titled Australia\'s Cultural and Creative Economy: A 21st Century Guide (2020) shows that the contribution of the creative economy to Australia\'s gross domestic product (GDP) reached 12 percent with a total value of $160 billion. The economic sector employed 900,000 workers.

Something similar occurred in Britain. According to data from the Office for National Statistics, the unemployment rate in Britain in the 1990s peaked at 10.7 percent in 1993.

Then-British prime minister Tony Blair commissioned the head of the Department for Digital, Culture, Media and Sport (DCMS), Chris Smith, to define the model of the creative industry in the UK.

Chris Smith said an interview that the success of the development of the creative economy relied mainly on the support of the macroeconomic ecosystem, political will, government bureaucracy and business actors. The British creative economy stands on a strong foundation, because it emphasized the protection of intellectual property from the very beginning.

The UK realized that the biggest threat to the creative industry is piracy. If piracy is rampant, few people are interested in getting into this field.

According to data provided by the British Creative Industry Federation,the creative economy at present employs about 2 million workers, and more than three-quarters of them are outside London. The model of the creative economy developed by the British government is able to widely distribute economic activities, so that they are not only dependent on the capital city.

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Most of the creative economy businesses are small. As many as 95 percent of the creative industry entities in the UK involve fewer than 10 people. Thus, the maneuvering of business units during a crisis becomes more agile. Data show that, during a pandemic, the economic sector still contributed $159 billion or about Rp 2,300 trillion to the GDP.

Looking at the timeline of the development and the economic value generated up to now, the creative economy has a great potential to be further developed. Globally, UNESCO said that the creative economy generates $2,250 billion a year. This is equivalent to 3 percent of the global GDP.

Apart from income, the contribution of the creative economy also arises from a sustainable economic aspect. The main advantage of the creative economy is that it does not rely on the exploitation of natural resources but on intellectual assets, such as creativity, skills and the arts.

Indonesian Opportunities

KOMPAS/ANGGER PUTRANTO

MSME actor and Tiara Acesoris business owner Ratna Yunita shows her craft production in Banyuwangi, Thursday (5/11/2020). The Indonesia Creative City Network (ICCN) encourages the Government to partner with creative communities to increase economic growth, especially in the MSME sector.

Similar to the global trend, the creative economy in Indonesia has shown promising results. The early stages of the development of the creative economy were marked by the launch of the Indonesia Design Power 2006-2010 Program. This program was carried out by the Trade Ministry, Industry Ministry, Cooperatives and Small and Medium-Scale Enterprises (SMEs) Ministry and the Indonesian Chamber of Commerce and Industry (Kompas, 14/7/2006).

Under the program, which has been running for 15 years, the creative economy grew by 5.1 percent in 2019. That growth could be considered high, because it exceeded the national economic growth of 5.02 percent.

In 2018, the creative economy accounted for 15 percent of total employments in Indonesia, which compares to 8.1 percent in Australia and 10 percent in the UK.

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There is great potential for further development of the creative economy. We can infer that the creative sector in Indonesia is becoming stronger from increased copyright protection. On 30 March, 2021, President Joko “Jokowi” Widodo ratified Government Regulation No. 56 of 2021 concerning song and music royalties.

However, the development of the creative economy could be hampered by the recent merger of the Creative Economy Agency (Bekraf) with the Tourism and Creative Economy Ministry. In the ministry’s 2020-2024 strategic plan, the working activities tend to be focused on a promotion of tourism. More efforts are needed to support the creative economy, so that it can grow faster in the International Year of the Creative Economy. (Kompas Research and Development)

This article was translated by Hendarsyah Tarmizi.