Indonesia in recent years has registered a steady growth at above 5 percent. Steady investment flows have also allowed Indonesia’s economy to expand at a rapid pace. Most notably, the Indonesian government has announced various policy changes, which are primarily aimed at providing new opportunities for foreign investors.
Indonesia’s economic growth is more measured due to the slowing down of global economy impacted by the US-China trade war. Thus, it will continue to depend to a large extent on domestic investment and household spending to drive its economy in 2019.
One of the sectors that manifested consistent growth is Indonesia’s creative industry. t has an excellent growth record of 922.58 trillion IDR (US$64.7 billion) or 7.44 percent of the country’s GDP and accounted for 14.3 percent of Indonesia’s workforce.
Dubbed as the ‘creative economy’ initiative under the Jokowi administration, it is poised to become Indonesia’s future economic powerhouse. The government has prepared incentives and supporting measures which involve regulatory procedures made easier for interested investors. Jokowi established the BEKRAF or Indonesia’s Creative Economy Agency to facilitate development and coordination of creative economy in Indonesia.
Creative Economy is a concept that focuses on new ideas and human resources. The most active players in this sector are young entrepreneurs or small and medium enterprises (SMEs) but they are challenged with limited capital. According to BEKRAF and BPS data in 2017, small-scale companies are not eligible for financial loans because they are neither registered as limited liability companies nor obtained intellectual property rights.
On the other hand, BEKRAF has introduced the Investment Readiness Levels (IRL) to serve as a benchmark in assessing investment readiness, technological application and market competition.
The creative economy in Indonesia has 16 subsectors including apps and game development, architecture, interior/visual communication/product design, fashion, movies, animation/video, photography, handcrafts, culinary arts, music, publishing, advertising, performing arts, fine art, television and radio.
In 2016, BEKRAF targeted three subsectors including digital applications, film and music and directed the government to transform them into foreign direct investments (FDI).
(source: ASEAN briefing)