The Role of Business Incubators as Creative Policy Intermediaries in Indonesia
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Creative industries and cultural policy
discourses have spread around the world, not only to first world countries but
also to some developing countries, including Indonesia. Since the term creative industries is more
prominent in Indonesia than cultural industries to distinguish contemporary and
popular culture from traditional arts and culture, I will use the term creative
policy rather than cultural policy for this essay to avoid confusion.
Unfortunately, contemporary culture audiences
in Indonesia is not as plenty and appreciated as traditional culture audiences.
Doing contemporary culture is often seen as an act of neglecting local cultures
and a movement to uphold Western culture more than Indonesian culture which is
not entirely true. For that reason, the dissemination of this idea must be
supported by intermediaries. This essay will highlight two types of business
incubators as creative policy intermediaries in Indonesia.
This essay is structured as following. Firstly,
I will describe the creative industries discourse and model in Indonesia and
how intermediaries are able to aid the development of the creative industries. Secondly, the term creative
intermediaries will be explained thoroughly. To make this essay more specific,
I narrowed down the many types of intermediaries and chose to address Business
Incubators (BI) and further explain the roles of BI. Then thirdly, I will
undertake a critical review of the
implementation of BI in my home country, Indonesia, endowed with real world
examples, two particular types of BI, how it is interrelated to promote the
model and discourse, and suggestion for improvement.
Indonesia recovered from the severe Asian economic crisis in 1998 which
marked the transition between New Order economic period to Reform economic
period (Jones, 2007). At this rough time, numerous big corporations went bankrupt.
On the contrary, Small Medium Enterprises (SME) stood still and saved
Indonesian economic system. Therefore, since that period Indonesian government
has been striving to intensify the growth of entrepreneurs. Within just 17 years’
period until 2003, there were 64 new institutions, ranging from governmental
bodies, banking services, and private companies, initiated 594 diverse programs
related to SME empowerment. These programs
include coaching, funding, and award granting (Tambunan, 2007).
Moreover, with the abundance of Indonesian
citizen as well as a limited job
opportunity, the notion of self-employment is highly compatible to be
implemented. The widespread of the creative
economy term also influences the number of SME which operates within creative
economy categories such as fashion, craft, design, and interactive leisure
software. In line with Reform’s vision of ‘greater freedom of expression in the press and cultural practices’ (Jones, 2007,
p.449), the overall circumstances of Indonesia in this economic period is indeed
far more conducive for creative workers than the oppressive New Order period. We
can see the determination of Indonesian government to nourish creative
entrepreneurs in its long-term development plan to
embody competitive and dynamic creative
entrepreneurship: (1) increase quantity and quality of creative entrepreneur
(amount, even distribution, enhancement of skill-knowledge-attitude) and (2)
increase collaboration, networking, and partnership at local, national, and
global stage (Indonesia Ministry of Tourism and Creative Economy, 2014, p.292).
In other words, the delivery of creative
economy discourse in Indonesia is emphasised
on creative entrepreneurship or SME development. My undergraduate research also
shows that the alumni from art and design faculty have a hard time finding
suitable jobs related to their degree because the creative economy ecosystem in
Indonesia is not supportive enough. The implication is some alumni chose to
work in non-creative industries (Wiradarmo, 2014). This is why entrepreneurial
spirit must be implanted for them so they
can invent new job opportunities independently.
This leads the government to apply cultural
occupation theory by Grodach (2013) as a creative economy model. The focus of
this model is to maximise the power of
human capital in the sense that government must prepare all needs of creative
workers to help them thrive. Intermediaries are needed as a bridge to ensure
that all of their necessities are affordable whether in terms of cost or
access. This theory is backed by Markusen and Schrock (2005) who popularised the artistic dividend theory, an
approach to highlight how precious it is to foster artists and creative workers
as an investment that can improve the extensive economic landscape.
In addition, Indonesia also highlighted the
importance of ‘design-led innovation’ from Potts and Cunningham’s (2008, p.237)
growth model as a competitive value for creative industries which is able to
boost not only creative industries revenue, but also has wider implication to catalyse
the prosperity of other non-creative fields like tourism, technology, or
service industries that will evoke higher Gross Domestic Product (GDP). In this
model, creative industries is classified as a specialised
subject. It is positioned above other industries and overarched them. For
Indonesian case, this may explain the transformation of Ministry of Tourism and
Creative Economy (KEMENPAREKRAF) to a more independent Creative Economy Council
(BEKRAF) in 2015 because its programs require inter-ministry collaboration
(Creative Economy Council, 2015).
The term ‘cultural intermediaries’ was coined
by Bourdieu (1984, p.356) in reference to critics about how cultural products
were chosen to be consumed by the masses. However,
currently, the term is slightly shifted.
Intermediaries are defined by Perry et al. (2015) as institutions which connect
creative goods from producer to consumer and vice versa, then frame it in order to gain a greater monetary advantage. Another definition
by Jakob and Heur (2014, p.357) add
another significant policy-related role of
intermediaries to ‘shape, regulate, organise,
and govern’. For them, some intermediaries have contributed to informing stakeholders about what kind of
policy is needed by the masses, while at the same time other kinds of intermediaries invoke policy to the masses.
There are several types of intermediaries
ranging from ‘creative hubs, business support services, […] national agencies
with specific policy framings, to […] policy think tanks’ (Selfe, 2016).
Nevertheless, the most interesting one for me is business support services or
in this case, business incubators (BI) because it intersects with Indonesian’s
creative economy agenda to cultivate the people. BI is defined as
a […] combination of business
development processes, infrastructure and people, designed to nurture and grow new and small business by supporting them
through the early stages of development and change (UKBI, 2007 cited in Bruneel
et al., 2012, p.111).
In my perspectives, BI as intermediaries will
fortify the application of the two theories which are implemented in Indonesia,
the occupational and growth model.
More or less creative economy development in
Indonesia is based on the UK model which was first socialised by British Council. It even invited Charles Landry, a
prominent creative economy consultant from the UK to Bandung, a pilot project
for the creative city in Indonesia (Temenos
and McCann, 2012) so the citizen can learn directly from the source. Until
nowadays Indonesia still does policy
benchmarking to other developed countries and then adapted it in Indonesia with
some adjustment. Consequently, it is better to learn how BI concept is executed
in developed countries.
 |
| Sheffield Cultural Industries Quarter (Source: www..integreatplus.com) |
There are many BI across the UK itself, namely
Sheffield’s Cultural Industries Quarter, Birmingham’s The Custard Factory,
London’s The Chocolate Factory, Cardiff’s Chapter Workshops, and Glasgow’s
Creative Clyde. Physically it almost looks like conventional office space, but
there are other additional facilities like front office, meeting room, print
and photocopy, cafeteria or studio workshop for a more advanced type which can
be utilised by all tenants. Basically, the tenants will save operational
cost because they are grouped with other renters to get common facilities with
cheaper shared price. The environment also provokes collaboration or
inter-trade with other businesses.
Apart from cheaper total rent cost than typical
office space, consultancy service is incubators core value proposition. Since
most of the prospective tenants are new in entrepreneurship field, they are
eager to learn practical things. There are workshop coaching and private
mentoring with hope to help these start-ups overcome critical early phase of
business until they are mature and ready to leverage their business to the next
phase. Tenants do not have to pay the supplementary
cost for this service since it is included in their rents (Bergek and Norrman,
2008).
Most BI are owned by private corporations thus
their revenue relies upon rent payment. In order to gain additional payment,
they often rent common rooms for events
such as seminars, gathering, or craft workshops. There are also ancillary
activities like a coffee shop, library,
or gift shop which can also act as a showcase for the tenants’ products. BI
with bigger spaces tend to include gallery or performance stage thus they can
attract general visitors beside the existing tenants (Montgomery, 2007). In principle, they always find a way to make the
space lively and attractive for prospective tenants.
After analyzing Indonesian BI
models
and compare it with literature, generally I find 2 main roles of BI in
Indonesia: the first one is (1) business-based output to increase nascent
creative entrepreneurs, especially for youth, with new business or start-up as
output; and the second one is (2) product-based output to help extant SME to
develop new creative product or re-branding process in order to fit better into
creative industries criteria such as novelty and well-designed products.
As for the way BI choose tenant, Bergek and
Norrman (2008, p.23) divided into two approaches, namely (1) ‘idea-focused’
where innovative ideas and business models are the primary consideration and
(2) ‘entrepreneur focused’ which put aside ideas but emphasizes on character
and quality of the person or the team. The first approach believes that entrepreneurial spirit can be
nurtured upon training or coaching, while the second approach argues that realistically not everyone can be
entrepreneur so they must select the right individual from the beginning of the
program. The differences in these two
approaches are in parallel with the two
types that I previously mention.
Clearly, these
two types can be seen in real world practice. For this essay, I chose four BI
programs from three different governmental bodies as an example. Most of the programs are recently launched thus there
is still much room for evaluation and improvement. The reason to choose state-owned bodies is to
understand how the key stakeholders interpret and lead creative industries development.
Besides, these programs may become a significant
precedent for other private BI.
The first category includes BEKRAF for
Pre-Start-up (BEKUP) program from Creative Economy Council and Bali Creative
industries Center Business Incubators (BCIC-BI) from Ministry of Industry. In
2016 BEKUP aspire to select 100 teams which
consist of 1200 participants from all over Indonesia to join 8 coaching clinics
in Jakarta, the capital city of Indonesia, for several weeks. The mentors are experts
from diverse backgrounds who teach everything participants need to know to
build a start-up. The mentors are
selectively approached by the government and they even had their own
pre-training. This program divided the coaching material into 4 stages, namely
talent development, founder preparation, program preparation, and mapping
(Palupi, 2016).
 |
| Competition in Bali Creative Industry Center (Source: www.bcic-ikm.net) |
BCIC-BI is pretty much the same, but it has
longer incubation period for 6 months. It is held in Bali Creative industries
Center building in Bali which is occupied with workshop. It takes time because
the participants are organised to
fabricate product prototypes for their business by themselves and later
collaborate with local craftsmen for the actual products. BCIC also organises design competitions and the tenants
are allowed to join (Bali Creative industries Center, 2015).
The second category comprises of Nusantara Innovative
and Creative Collaboration (IKKON) from
Creative Economy Council and Designer Dispatch Service (DDS) from Ministry of
Trade. IKKON offers a combination of
creative entrepreneurship and cultural empowerment program. For the first year,
it selects 5 teams which consist of
designers, photographers, and anthropologists to live in selected rural areas,
with minimum exposure potential, to develop new product or system for several
weeks. The aim of this program is to empower local talents outside big cities
of Indonesia to be involved more in creative industries discourse. The teams
will reconstruct traditional crafts and designed them in a more sophisticated
way. The first program was held in Sawahlunto, Lampung, Brebes, Rembang, and
Flores, all areas with the eminent
culture of batik and weaving (Zulaikha, 2016).
 |
| Product from Designer Dispatch Service Program (Source: www.facebook.com/indonesia-design-development-center) |
The other program, DDS, also facilitate
designers to work together with local SME from 11 export-intensive cities, such
as Yogyakarta, Kupang, Medan, Palangkaraya, and Solo. Two businesses from each
city are curated and then assigned with one designer to help them design a new product which best fit current global market
trend. Later the designs will be mass-produced by the SME. DDS is the eldest
program of all the BI cases in this essay. It was first initiated in 2011 and
since then has contributed to improving
export product diversification (Indonesia Design Development Center, 2016).
The most apparent distinction from UK BI model
is Indonesian BI are free of charge. The BI and all programs related to them
are fully sponsored by the government. As far as I comprehend, the uttermost
objective is to promote that creative economy is not exclusive, but inclusive,
hence they have to reach audiences as
broad as possible, even the less fortunate one. Payment may overcast the
audiences’ excitement for this program, especially because these programs
mainly target youth. The bottom line is Indonesian BI must encourage that everyone
is invited to participate in this promising industry, learn, and grow together.
Because tenants do not have to pay, there are
some limitations for Indonesian BI. For instance, there is a short time limit
for them to be engaged in the program. This is not happened in developed
countries’ BI because they can stay as long as they pay the rent or at least
for a long period of 3 years (Bruneel et
al., 2012). When the program is over, tenants are released without any formal
bond or contract. To illustrate, a BI could have been set a strict target for
all tenants to launched their business a month after incubation process ends or
to hit breakeven point one year after the business is launched. Quite the
contrary, there is still no data regarding
how the BI evaluate these tenants
afterwards, hence there is no solid evidence to prove that this system or
tenants’ businesses to be succeeded or failed. Possibly the evaluation will be
accomplished for upcoming years’ program. I recommend cost-benefit analysis to assure that the governments’ huge investment
for this programs is right on target and
gap analysis to compare and contrast with best practices programs as suitable
policy evaluation methods.
Another
distinctive feature from Indonesian BI is the shape of the BI. In developed countries, BI is a tangible place or real brick
and mortar buildings, while in Indonesia BI is adapted as an event or
incidental program which can be held in
several places based on the sponsors. Here, incubators are perceived as a
system. There is also an adaptation for BI
as actual places, which often called co-working space in Indonesia, but this
space is open for any kind of businesses, certainly without special training or
mentoring services as offered by conventional BI.
Despite these different
adaptations, pointedly for business-based output BI, they should
acknowledge that initiating a business is not as hard as sustaining it.
Regardless of how brilliant the product, branding, and marketing strategy which
are the core coaching material for most BI (Mustafa, 2016), business needs a stable operational system and constant profit
to keep on going forward. These non-creative management tasks may sound less
appealing to learn and can be delegated to outsourced workers, but it is
essential for business owners to understand the basic knowledge. Based on my
observation, I suggest BI to invite professional accountant to teach tenants in
composing major financial statements such as income and expenditure report,
balance sheet, and cash flow. Above all, these start-ups need access to
capital. A sponsorship guidance related to business model presentation,
pitching, and how to approach angel investor is of the utmost importance.
On the other hand, my suggestion for
product-based output BI type is to include training related to intellectual
property rights. As an Indonesian product design student, from my experience,
there are many SME, which mostly produce furniture and craft, with exquisite
craftsmanship skills but the products’ designs are copied from existing
products or even from the internet without proper acknowledgements. This is caused by their poor understanding of design
and copyright. They do not know that this simple act can be considered as an
illegal practice, especially if they want to expand their market overseas because it is better to showcase goods
with true Indonesian identity. Furthermore, it will attract bad publication for
Indonesia to be known as a copycat country. Therefore, the presence of BI is
necessary to educate the value of design and inspire them to hire designers for
the upcoming production process. Bridging talented designers and emerging SME
through intermediaries is a good step to overcoming
this perennial problem.
Considering this fact, in my opinion, the
product-based output approach is more viable for Indonesia because the output
is directly visible and more measurable. There is no worry regarding the mechanism
of production because it is professionally handled by experienced industries,
thus the BI can go straight to manage the export system. For instance, what
international exhibition should the products be displayed at so the industries
can acquire more international customers? By the same token, the risk of
program failure is smaller since in assumption, working with nascent
entrepreneurs in idea-based output BI model without precise talent assessment
is open to the possibility of irresponsible tenants who do not reap the
intention of the coaching.
All in all, the role of governmental business
incubators is paramount to achieve Indonesian vision for 2025 to accelerate
creative entrepreneurship growth. Even though there are three disparate
governmental bodies with their own flagship creative industries support
programs, we should see them as complementing rather than overlapping one
another. Eventually, they are all playing active roles to achieve the long-term development plan.
Most of these programs are recently established
in the past two years. In such circumstance, it is pleasant to notice that
Indonesian government’s put such determination to flourish creative industries.
I believe in the upcoming years more creative entrepreneurship-related
programs will be established and in the end,
I am optimistic that Indonesia will reach its creative economy long term
development plan in 2025.
DISCLAIMER
This is an essay for CICP Assignment for Creative Industries and Cultural Policy Course at the University of Glasgow. Please provide proper citation if you use this as reference.
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