Creative economy: Indonesia’s wager

This publication is part of a series of articles highlighting the key themes of the upcoming 2018 edition Re|Shaping Cultural Policies to be launched on December 14th next at UNESCO Headquarters.

With a changing demography dominated by young people and a growing middle class, the creative economy is a promising avenue for Indonesia’s national economic development. The Indonesian government has recently established an agency (BEKRAF) to coordinate and implement the country’s creative economy agenda.

Indonesia has a very vibrant cultural scene with thriving fashion, film and visual arts sectors. Several major art events are organized, including the Yogyakarta and Jakarta biennales and the Jakarta Fashion Week. The cities of Bandung and Pekalongan have also recently been included to UNESCO’s Creative Cities Network in the field of design and arts.

Young entrepreneurs

Roughly, half of Indonesia’s population is below thirty years of age. With strong entrepreneurial and DIY (Do-It-Yourself) cultures in cities such as Bandung, young and tech-savvy Indonesians are starting to unleash the creative potential of the country. Harnessing this potential through government policies can further the relevance and impact of cultural and creative industries (CCIs) for the country’s economic development.

Discussions surrounding CCIs have become ubiquitous, leading to the establishment of Indonesia’s first creative economy agency (Bekraf) in 2015. This government agency advises on export strategies to support the marketing of national cultural goods and services, both domestically and abroad. According to the upcoming 2018 edition of UNESCO’s Global Report “Re|Shaping Cultural Policies”, which assesses how country around the world who have ratified the UNESCO 2005 Convention on the Protection and Promotion of the Diversity of Cultural Expressions are implementing policies to support creative sectors, the flows of cultural goods and services worldwide remains largely unbalanced. In 2014, developing countries excluding China and India, accounted for only 26.5% of the share of global exports of cultural goods in 2014. (See table below).

Article 16 of the UNESCO 2005 Convention calls on member States to implement preferential treatment within trade agreements to promote a more balanced flow of cultural goods and services. UNESCO is currently elaborating a training module to support trade negotiators to take into account the specificity of cultural goods and services in future trade agreements.


Source: UN Comtrade, Department of Economic and Social Affairs (DESA)/Trade Statistics Branch/United Nations Statistics Division (UNSD), 2016.

Wealth of opportunities

As developing countries try to move away from commodity-dependent economy, many of them consider the CCIs as a way forward for achieving inclusive and sustainable economic growth. In Indonesia, the creative economy contributed to 7.1% of its GDP in 2014 and absorbed approximately 12 million workers. This means that the creative economy has the strategic potential to contribute to poverty alleviation and job creation.

Mr Triawan Munaf, Head of Bekraf notes, “We face complex challenges and creative economy is becoming very important in a world of increased competition and depleting natural resources on which we cannot solely rely any more. We need to find alternative source of value beyond cheap labor and natural resources, the conclusion is that Indonesia needs to innovate.

The budget of Bekraf serves to support research, education and development, access to funding, infrastructure development, facilitation for intellectual property rights and regulations, and other technical support. Out of 16 subsectors, Bekraf focused its efforts in 2016 on three: digital applications, film and music, advising the government on how to open these creative sectors to Foreign Direct Investment (FDI) in an effort to boost the local industry.