Creative Industries and Regional Productivity Growth in the Developing Economy: Evidence from Indonesia

Abstract

This paper examines the degree to which creative industries stimulate regional productivity growth in a developing country, Indonesia. The Indonesian government promotes long‐established “traditional” craft businesses as creative industries, but they pay less attention to new knowledge creation and focus on highlighting heritage values as selling points. Our findings show that the “real” creative industries are still scarce and found mostly in fairly advanced urban regions. These industries are more likely to be an indicator than a driver of regional economic development. Meanwhile, those traditional businesses are much larger than creative industries and potentially contribute to regional productivity through consumption activities, thereby requiring different policy strategies.

Role of Creative Economy on Local Economic Development

“…This shows that connectivity in local economic development is very necessary and has a positive impact on local economic development. This finding similar with Fahmi & Koster, (2017); Tao et al, (2019) research. Same as Hidayat, Prasetya, & Wulandari, (2021) finding that internet coverage can be positive impact to reducing poverty with providing adequate information that makes more knowledgeable and informative.…”

“…The high concentration of the creative working class will certainly have a positive impact on economic development. This is similar with Avilés- Ochoa & Canizalez-Ramírez, (2015); Awalia, Mulatsih, & Priyarsono, (2013);Fahmi & Koster, (2017); Tao et al, (2019) which states that a creative workforce has a positive impact on economic and regional growth. The creative workforce is seen as one of the accelerating factors in improving the economy.…”

“…Given the contribution of college graduates is often positive for the creative economy. It can be identified that the creative workforce often requires high work skills (Fahmi & Koster, 2017). The importance of higher education levels in supporting the creative economy also encourages equality in getting opportunities to improve their welfare.…”

The Role of Place Identity, Local Genius, Orange Economy and Cultural Policies for Sustainability of Intangible Cultural Heritage in Bali

“…In the protection of cultural-creative products, products created from original ideas in the orange economy, of course, point to copyright protection inherent in creators [10,36,38].…”

Business networks, social capital and the economic performance of creative and cultural industries: The case of Indonesia

“…It has been shown that creative industries benefit from the diversified economic activities present in regions, and that these provide opportunities to find and combine, or ‘cross‐fertilise’, various skills and ideas in an informal way (Rosenthal and Strange, ; Potts, ; Feldman and Kogler, ; Karlsson, ). Creative industries may not only benefit from existing regional conditions, but also potentially foster regional economic growth through sectoral and knowledge spillovers, introduce and percolate new values to the economy (Potts and Cunningham, ; Fahmi and Koster, ). While existing studies have shown that networks and regional environments affect the development of creative firms, it consequently remains unclear by which mechanisms the firms in creative industries utilise knowledge and other resources across various levels in performing their creative processes, and which may then lead to increased regional economic performance.…”