Rethinking the Growth of Creative Economy in Indonesia: The Music and Gaming Sub-sectors

Rethinking the Growth of Creative Economy in Indonesia: The Music and Gaming Sub-sectors

Isabelle Antunès

Source: ERIA

Digital technologies are transforming economic activities in Indonesia, where the creative economy contributes significantly to the national GDP and provides employment for millions of people. An introduction to these shifts reveals that while traditional sectors like culinary arts, fashion, and crafts remain the largest employers, sub-sectors heavily reliant on digital technology, such as music and gaming, are experiencing the fastest growth. The music industry is characterized by high domestic consumption and a shift toward digital streaming, while the gaming industry is currently driven by international exports and a growing number of local studios.

An analysis of the growth of the music and gaming sector highlights a stark contrast in market dynamics: the music industry dominates the domestic market with local content, whereas the gaming industry struggles with a low domestic market share despite its global success. Growth in the gaming sector is largely fueled by local initiatives to incubate individual developers into professional businesses, yet many produced games remain small-scale and generate limited income. Conversely, the music sector is seeing rapid expansion through digital service providers and innovative distribution models, including physical sales in retail outlets.

The livelihood of musicians and game developers depends on a complex web of actors and distribution channels, moving from traditional unit-based models to modern access-based systems. Professional game production involves a rigorous cycle from initiation to prototyping, often requiring external publishers for funding and marketing. In the music industry, artists generate revenue through diverse streams such as digital streaming, synchronization rights, and live performances, the latter of which remains a primary source of income. Navigating these livelihoods requires a deep understanding of intellectual property rights and the role of collective management organizations in collecting royalties.

The key role of entrepreneurship and financial inclusion as a driver for growth emphasizes the necessity for artists to transition from merely earning money to making money through the creation of scalable products and services. Financial inclusion acts as a catalyst by providing artists with basic financial education, wealth management tools, and access to loans for expanding their creative businesses. This framework views intellectual property and proven revenue streams as viable forms of collateral, encouraging banking institutions to develop specialized products that cater to the irregular income patterns of creative professionals.

Circular creative economy growth: the new strategy to thrive proposes a regenerative model that moves beyond linear production and consumption. This theoretical framework suggests that creative products should be designed for long-term durability, reuse, and reinterpretation, allowing a single intellectual property to inspire new works across different sub-sectors. By integrating cultural assets and social features into the design process, creators can build virtuous circles where initial works generate ongoing royalties and publicity while feeding the intellectual process for future projects.

The way forward for the creative sector involves a comprehensive approach to capacity building, focusing on financial literacy, entrepreneurship training, and the adoption of the creative circular economy. Establishing a reliable national copyright management and information system is essential for providing transparency and building trust among stakeholders in the music industry. Ultimately, the expansion of the creative economy depends on the collaboration of all actors—including public institutions, private developers, and financial entities—to foster an ecosystem where innovation and creativity are managed as valuable, sustainable natural resources.

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