Bandung. Chatib Basri, economist and former finance minister, said on Tuesday (05/12) that Indonesia must invest more in its human capital to benefit from the opportunities offered by the creative economy.
"The challenge for Indonesia's creative economy is in human capital," Chatib said during his keynote speech at the preparatory meeting for the World Conference on Creative Economy (WCCE) in Bandung, West Java.
Indonesia, with its relatively stable economic growth, may become the fourth largest economy in 2050, according to an analysis by PricewaterhouseCoopers (PwC).
As the Indonesian middle class grows at around 10 percent annually, according to Chatib a key change is going to occur in the consumer behavior, with wants and leisure getting on top of necessity goods. The increasing purchasing power also means that more people will be concerned about quality.
Chatib emphasized that Indonesia could forge new exports, especially in the creative industry, by improving the quality of its human capital through vocational education.
But the government is still not ready to invest adequately in the sector's workforce.
"We have government training centers, but their equipment does not meet the latest requirements," he said.
Budget limits leave little room for the government alone to fix the issue, but it can "ask the private sector to do the training" with a tax-deduction incentive, Chatib said.
The creative economy, which relies on ideas and innovation, is likely to transform the world's markets. Indonesia, with its cultural and ethnic diversity, and a population of 260 million, can greatly advance in this sector.
The creative industry contributes 7.3 percent to Indonesia's gross domestic product (GDP) and employs nearly 16 million people.
Since the sector is partly dependent on digital technology, which gives broader access to markets and new business models, according to Chatib it can also support equal opportunities in employment.
"If we are looking at economic trends ... Indonesia's future will greatly depend on the creative economy," he said.