Showcase of the Creative Economy

The word "change" has become a new mantra in life, especially in the economics field.

The economic landscape is changing rapidly, not only in the types of businesses, actors, policy instruments, and organizational structure, but also in production and distribution.

In the past, it took up to 30 years to turn a company into a conglomerate, but now the process can be shorter, taking just under 10 years, even less than five years.

Information technology has helped drive this change. However, the upstream of these changes as a whole is none other than the knowledge-based economy.

Also read:

^ The Economy and Stock of Knowledge

^ Politics of MSME Development

The downstream is the creative economy and industry, which has become a "new" potential sector, given that most of its resources rely on knowledge. In the meantime, the world is faced with the pressing challenge to realize the Sustainable Development Goals (SDGs).

The SDGs consist of 17 goals and 169 development targets to be achieved by 2030. Time is running out.

Latent development issues

The issue of the SDGs needs to be raised early in the dynamics of change because it carries the fundamental mandates that concern life, such as poverty and hunger, inequality, the environment, education, gender equality, housing, decent jobs, as well as clean water and energy.

In the wake of a major crisis, as happened in 1998 and now, the pandemic in the past year, the number of poor people suddenly surges.

Since the foundation of the Republic, those issues have been the fought out as the nexus of development from era to era. The issue of poverty, for example, has been systematically safeguarded by virtue of various policies and programs, with quite encouraging results. However, one of the emerging challeges is the dynamics of poverty in a time of economic instability (crisis).

In the wake of a major crisis, as happened in 1998 and now, the pandemic in the past year, the number of poor people suddenly surges. The economic resilience of the poor has collapsed in the face of recession, even though the government has initiated various permanent programs and drafted new responses against the pandemic.

KOMPAS/AGUS SUSANTO

Residents repair the tin roof of their house on the banks of the Ciliwung River in Kebon Manggis, Matraman, East Jakarta, Wednesday (17/2/2021). The Central Bureau of Statistics released that the number of poor people in Jakarta is now 4.69 percent of the total population or 496,840 people, almost reaching 497,000 people. In the first six months of the 2020 pandemic, there were an additional 16,000 poor people in the capital.

The constraints of human habitation have seen many citizens unable to afford decent homes. Meanwhile, only 64.1 percent of rural communities had access to drinking water in 2018 (Statistics Indonesia/BPS, 2019). Even in urban areas, the figure also remains large. Women\'s access to education is lower than that of men, as shown by the Human Development Index.

The wages of male workers were 21 percent higher than the wages of women for the same type of work in 2015-2019 (BPS, 2020). The gender wage gap has been government’s focus over the last six years. The ratio decreased before again going up slightly, as the pandemic has interrupted the government measures.

Disasters have been causing havoc one after another, such as floods and landslides, which have been blamed on environmental destruction that began decades ago. The carrying capacity of the environment for human development is low, so achievements could potentially regress and narrow once again.

Also read: Looking at the Digital Economy in 2021

Of course, Indonesia is not alone. Other countries are experiencing the same situation, although to different extents and magnitudes. The message from the above descriptions is that the core problem has remained the same amid the ongoing rapid economic changes, so "two worlds" of life exist at the same time.

First, most countries have been facing the same developmental issues for decades, such as poverty, inequality, environmental degradation, health and education. The number of “backward” communities remains deplorably very large (the majority of the world population).

Second, the economy is increasingly driven by knowledge-based technology and information. This sector can only be filled by a narrow tier of society, which means that many people are left outside the development arena. This is the point at which economic policies and programs must be mapped out appropriately in the face of global change.

KOMPAS/COKORDA YUDISTIRA

Penglipuran Traditional Village, a tourist village in Bangli, Saturday (17/4/2021). Penglipuran Tourism Village has been certified by the CHSE-based health protocol as a form of destination readiness during the Covid-19 pandemic.

Anchor of creative economy

The world of increasingly dense knowledge is the source of the shift to creative economy. Information, internet, digitization, and applications are some of the tools that enable knowledge to be transformed and produced into commodities for mass consumption.

The concept of the creative economy is derived partly from the praxis of the creative industry, which in several respects refers to the cultural industry. The creative economy has at least five conceptual anchors (Moore, 2014): (i) applications that are expected to accelerate growth in income, employment and exports, as well as promote inclusive social, cultural and human development.

Following this are: (ii) the interplay between economic, cultural and social aspects with technology, intellectual property and tourist destinations; (iii) a knowledge-based economy that connects the micro- and macroeconomic levels; (iv) more feasible development that is responsive to multidisciplinary policies and effective coordination; and (v) the creative industry as the core of the creative economy.

Also read: Digital Economy Blueprint

The creative economy is a celebration for the big house that is Indonesia because it aligns with the commitment to build an inclusive society, foster cultural diversity, and strengthen human literacy. The creative economy not only gives value added to economic activities through the adoption of technology and the injection of knowledge, but it also has a comprehensive ability to serve these broader interests.

The face of economic development is thereby much more civilized than practices in the past. More importantly, the broader part of the creative economy is integrated with value added buffer instruments, namely technology, intellectual property and tourism. The tourism sector is no longer offered merely to attract crowds of people to see beautiful natural vistas or artificial creativity, but is integrated with ideas that grow from sociocultural and technological potentials. Tourism must become an economic driver that capitalizes on diverse knowledge and culture.

Economic activities that link the macro- and microeconomic levels have so far been tied through the input and value-added output process (between levels of business). Economic transformation policies, for example, are approached with the idea of bringing value-added products to certain sectors based on the available resources. This approach is not wrong, but it has missed knowledge as a vital rope that wraps the whole process to frame the micro/macro economy in broad knowledge.

Tourism must become an economic driver that capitalizes on diverse knowledge and culture.

When implemented outside the policymaking room, this process will encourage more flexible collaboration between stakeholders, so that multidisciplinary work and coordination will become the fulcrum of the economy’s movement.

This whole interaction will grow the creative industry: an economic approach that moves to strengthen upstream knowledge, resting on social and cultural inclusion and on policies that are not isolated to narrow fields. This is the showcase of the creative economy.

KOMPAS/P RADITYA MAHENDRA YASA

The thatched roof huts, which are characteristic of the traditional architecture of the Sasak people, are decorated in the yard of a weaving seller gallery in Sukarara Village, Jonggat sub-district, Central Lombok Regency, West Nusa Tenggara, Wednesday (27/1/2021).

Social network market

How do we ensure that progress of the economy and the creative industry does not stray from the efforts to build equitable development so all citizens can get on board the moving locomotive of the economy? What capitals does the nation have?

The nation possesses at least three core capitals at this level. First, the richness of the value system has shaped a diverse culture so that the mosaic of knowledge will never lose its supply.

Children\'s toys made from local resources (banana stems, bamboo, oranges, coconut wood, etc.) are a small example of how local knowledge has developed.

Formal education may be limited, but knowledge can culminate in local creativity. This intelligence is connected to culture, such as that arising from rituals during planting or harvesting season, traditional architecture, or the beautiful wayang motifs in batik designs. As long as cultural diversity does not die, the creative industry will continue to exist.

Also read: Digital Economy

Second, around 70 percent of the population has access to information (internet, digitization, applications). This means that around 200 million people are exposed to large networks and the global economy. They are not only a potential market, but also prospective producers of ideas who can become suppliers of authentic goods and services.

The current knowledge source is obtained through expanding digitalization. The progress of economic activities in other locations and countries can automatically be absorbed and modified. Likewise, the creative economy developed at home can be displayed in an application that will be visited by citizens of the world. If this access is balanced with literacy in using and processing information into productive activities, it is a potential economic boom that stems from the power of the knowledge network. China is a concrete example of how mobilizing digitalization can become economic hegemony.

Third, Indonesia is currently experiencing a massive cultural shift due to improved knowledge capacity: laborers-standardization-urbanization-commercialization. Over the last 40 years, the workforce’s increased knowledge capacity has escalated, through both formal and informal education, so that skills standardization (certification) has become the new identity of the economy.

This group of citizens is the driver of urbanization, which has made the population in cities surpass that in villages. It also dictates the market in many ways: type of production, distribution, and methods of consumption. The good news is that these people are a lucrative market for economic / creative industry commodities.

KOMPAS/TOTOK WIJAYANTO

Ahmad Erani Yustika

This means that if this market is managed well, the economic scale of the creative industry will be fulfilled (not to mention the potential gains from the international market). Don\'t forget that this must also be integrated with the "social network market", so it is commensurate with the citizen empowerment efforts.

Ahmad Erani Yustika, Professor, Brawijaya University Business and Economics School; Economics Deputy, Vice Presidential Secretariat.

This article was translated by Musthofid.