Tuesday, July 11, 2006

Hobbynomics, Creative Industry @ Tempo

Tempo Magazine
No. 45/VI
July 11 - 17, 2006

Stifling Creativity

Several countries are triggering the development of their respective creative industries. The government however is still dilly-dallying.

IN a European-style "castle," hundreds of young people are thinking and working hard in front of computer screens. With their skilled hands, several animated films have been created and these have already penetrated the US and European markets. Two of these hard-working young people have even been rewarded with international prizes.

Carlos Adventure was named the best animated children's film serial at the International Animation Festival in Tenerife, Spain, in 2002. Another film, Jim Elliot Story, received a Golden Remy Award in the 2006 international film festival film in Houston, Texas, USA.

Perhaps you will find it hard to believe that these two films were not created by film kings in America or Europe, but rather by the hands of two creative young people aged between 20 and 30. They only work in a five-floor ruko (shop-house) in the Pasar Baru area of Jakarta, which is better known as a shopping center for textiles and shoes.

This is where Castle Production, which was set up in 1998, has its headquarters. According to Ardian Elkana-both owner and head of this animation studio, the largest in all of Indonesia-in the period of a year, Castle produces 13 episodes of 2D animated films and 13 episodes of 3D animated films. For the past six years, all of these films have been exported and financed by foreign institutions.

Financing has come from several European countries, such as Spain, France, England, Germany and Switzerland. The producers and scriptwriters come from America. "There's no one domestically who is capable of covering the costs involved," said Ardian, who has a Master of Business Administration degree from the University of Chicago, USA. This is easy to understand, bearing in mind that the tariff level per episode is US$40,000 (around Rp370 million).

This tariff is in fact quite small when compared to the level of tariffs of US animation giant, Disney, which reach some US$300,000. But, due to the fact that the tariff is low, Indonesia is attracting the attention of financiers who have started to move their orders from Korea and Taiwan-which are already considered to be too expensive-to India, China or the Philippines.

Unfortunately, Indonesia is not able of making the greatest use of this unexpected opportunity. One of the obstacles is the limited amount of qualified human resources in the animation sector. Compare this with the situation in India. There, at least 400 animators work in the country's largest animation company. Not surprisingly therefore, hundreds of animated films can be created and supplied every year to MGM, Disney or even Universal.

There are also vast opportunities for Indonesia's creative industry in the multimedia and graphic design sectors. PT Elasitas, which was set up by Calvin Kizana, 32, certainly showed this by creating the website for Nokia, the cellular telephone company from Finland.

The design of the Nokia bookmark created by this programmer, who has worked in both Singapore and the US, has already been translated into 17 languages and is now used in a total of 35 countries. Because of this success, the company has continued to develop. Whereas at the start, it only had one computer and one employee, there are now already 60 workers.

Another source of wealth is its product package-design capability. In this sector, Indonesia's performance has actually been very encouraging. Proof of this can be seen in the fact the packaging design for Wall's Ice Cream created by PT AdMire has been exported to Thailand. As regards price, the owner of AdMire, Andi S. Boediman, acknowledged that the cost of product and packaging design in Indonesia is far cheaper than the cost of services offered by foreign design companies. In Indonesia, one piece of design work is only worth between Rp10 million and Rp25 million, while for the design of one Blue Band margarine
can in England, the tariff reached Rp800 million.

Andre, who is Chairman of the Digital Graphics Forum, has also pointed out that Indonesia needs to clean house as soon as possible in order that it will be
able eventually be capable of competing within the global creative industry. This is because, according to the creator of the first animated logo for the Seputar Indonesia program on the RCTI television station 10 years ago, "Compared with Thailand and Malaysia alone, we are already five to 10 years behind."

THE creative industry, which is based on creativity, expertise and individual skill, has the potential to bring in prosperity and more new jobs. From the results of mapping carried out in England, starting from 1998, it is known that this industry can be regarded as the fastest growing.

In 2002, this sector, which is based on intellectual property rights, contributed 7.9 percent of England's gross domestic product (GDP). During the 1997-2000 period, this sector grew at an average rate of 9 percent per year-far above England's average economic growth rate of only 2.8 percent. Every year, this sector provides new jobs for more than 1.9 million people.

According to Andi, this is the fourth stage in the economic development of a nation, after going through economic periods based on agriculture, industry and information. In England, there are 13 sectors in this industry category. They include advertising, architecture, design, film, music, the performing arts, television and radio, plus computer services and software.

In terms of development, the growth of the creative industry has been truly astonishing. Just consider the market value of IBM, Intel and Microsoft. Together, they are worth 2.3 times more than the automotive industry. Consider also film giant Disney, whose corporate value has grown from US$2 billion to US$22 billion in a space of only 10 years.

It's even more amazing when one looks at the economic potential that can be produced by the global games industry. The market value by 2004 alone had already reached US$20 billion (approximately Rp186 trillion). Even more fantastic is that this was achieved in a period of only 20 years-growth that was more than three times faster than that achieved by the Hollywood film industry.

This rapid growth of the games industry was a true blessing for Europe. From payments for downloads alone, it is estimated that this region will earn approximately US$2 billion (around Rp18.6 trillion) in 2007, with an annual growth rate of 25 percent.

Several countries in Asia are also active in the development of their respective information and digital industries. These include India, Japan, Korea,
Hong Kong and Taiwan, and all have very bright futures. In India, for example, last year the animation industry had already earned a total of US$1.5 billion
(approximately Rp14 trillion), and will experience annual growth in the region of 30 percent. In addition, there are the proceeds from between 700 and 800
films that are produced every year.

Aware of this huge future potential, Singapore continues to organize. The city-state has presented a program planned to develop a creative industrial
center, which is referred to as a creative cluster. The three creative industry clusters to be developed include media (the Media 21 cluster), design (the Design Singapore cluster) plus arts and culture (the Renaissance City cluster).

Through this program, the economic base of Singapore will move from an information economy to a creative economy, by blending together technological creativity, economic creativity and creativity encompassing arts and culture. The target is for the contribution from the creative industry to Singapore's GDP to rise from its current level of 3 percent to between 6 and 7 percent by the year 2012. "The wish of Singapore is to become what it calls the Renaissance City, which will eventually be the center of modern Asia," said Linda Hoemar Abidin, Chairperson of the Administration Board of the Kelola Foundation.

So what does the future hold for Indonesia? Apparently the country's creative industry has not yet received sufficient serious attention from the government. "Until now, bureaucrats have only paid any attention to anything that has an economic source base," said business observer Kafi Kurnia. In fact, the vast creative potential that is possessed by Indonesia could produce added value for the economy.

Just consider the potential of the batik, furniture, painting and sculpture companies stretching across the islands of Java and Bali. Up to now, many people's companies are in suspended animation but they keep going. As a result, the added value created by many is now being enjoyed by foreign companies. As an example, Kafi pointed out that in a boutique in Las Vegas, USA, a single kebaya (traditional blouse) from Indonesia is for sale with a price tag of some Rp200 million!

In economic terms, the contribution from the film industry can also be said not to be that small. Many people have jobs in the production process of domestic films, of which last year a total of 50 were produced. And remember, the government has earned its share form these as well. How? Because approximately 20 percent of the proceeds of cinema ticket sales have to be paid in taxes.

This means that from one film alone, for example Ada Apa dengan Cinta, which earned somewhere around Rp24 billion, approximately Rp5 billion found its way into the state's coffers. "Half of this was absorbed by the regions," said Mira Lesmana, producer. "Regional governments are not however aware of this."

Based on this state of affairs, the British Council has started to collect data on Indonesia's creative industry. From this, according to Yudhi Soerjoatmodjo, Art Manager of the British Council, "We will end up knowing just how important its contribution is to the Indonesian economy." -- Metta Dharmasaputra