About the Creative

Economy
Togar M. Simatupang
School of Business and Management
Bandung Institute of Technology
15 July 2010
Bio – Togar M. Simatupang
• Educational background:
– B.Eng. in Industrial Engineering, Bandung Institute of Technology (1991)
– M.Tech. in Technology and Quality Management, Massey University (1996)
– Ph.D. in Decision Science, Massey University, New Zealand (2004)
• Professional experience:
– Speaker, researcher, advisor
– Professor at the School of Business and Management in ITB
– Member of the Academic Senate at Bandung Institute of Technology (2006-2009)
– Head of Master and Doctoral Study Program in Management at ITB (2009-now)
• Current projects:
– Creative Bandung and Creative Jakarta
– Product Development in Digital Creative Industries
– Supply Chain Collaboration
• Current course work: Creative Economy, Supply Chain Management, and
Operations and Technology Management
• Interests: philosophy, design, literature, creativity, science fiction
Welcome to…
HIJAU DAUN - LUNA MAYA - THE TITANS - THE VIRGIN - OPICK FEAT AMANDA - SHE
Animation
 Learning Outcomes
• Describe the creative economy
• Describe, in-depth, the the mechanism by which creative
industries are conceived, developed, financed, and
distributed.
 The Creative Economy Era
The 12 pillars of
Is the information age economy at an end and are we
Competitiveness
entering a new and very different age or economy?

Agricultural Age Industrial Age Information Age Creative Age

(farmers and (factory (knowledge (creators and TO
crafters) workers) workers) empathizers)

No-empathy, Disharmony,
OR Greedy

7
The Creative Economy

8
The Creative Economy Definition
The enterprises and people involved in the
production and distribution of goods and
services in which the aesthetic, intellectual,
and emotional engagement of the consumer
gives the product value in the marketplace.
 Importance of the Creative
Economy
• Provides jobs and employment
• Creates wealth and revenue
• Creates markets for other businesses
• Supports and enriches other economic sectors
• Enhances quality of life
• Helps attract businesses
 What are “Creative” people?
• People who use a combination of their right
and left brain to solve problems

• People who use style, art, design, or

imagination to create products and services

• People who demand a high quality-of-life

 Creative People

Musician Song Writer Singer Dancer Researcher

Fashion
Writer Designer Architects Painter
Designer
Why? Multiple Intelligences
 Creative-preneurs
Domestic and global markets

Creative-prenurs
Objective: new venture or
established venture Marketing

Funding
Incubator New Venture

New Venture

Consultation
Creative Mentoring
Business
Ideas 14
Why? The progression of economic
value
 Where did the idea come from?
• The Rise of The Creative Class - Richard Florida
– A book on research compiled by him and others that
showed a correlation between the existence of a creative
class of people in an area and that area’s economic
success.
• A Whole New Mind - Daniel Pink
– A book about the shift from left-brain (linear) thinking to
right-brain (conceptual) thinking. The United States must
become right-brain dominant to compete with the third
world that is producing engineers and other left-brain
professionals by the thousands each year.
A variety of cultural industries and occupations
contribute to state vitality
 Creative Industries
• “…those activities which have their origin in individual
creativity, skill and talent and which have a potential for
wealth and job creation through the generation and
exploitation of intellectual property.”(UK Government,
Department of Culture, Media and Sport)
• Are based on individuals with creative arts skills, in
alliance with managers and technologists making
marketable products whose economic value lies in their
cultural (or ‘intellectual’) properties.
• Creative capital is created jointly.
Creative Industrial Process
Circle of Creative Industries
 On Cultural Production
• More or less meaning intensive production
• Exportation of culture means exchanging of cultural
meanings between communities
Creative Industries Taskforce (UK)
 About the Structure
• Advertising
• Architecture
• Crafts, designer furniture
• Fashion clothing
• Film and video production
• Graphic design
• Leisure software (computer games)
• Live and recorded music
• Performing arts and entertainments
• Television, radio and internet broadcasting
• Visual arts and antiques
• Writing and publishing
 The Concept of the creative
business
Creative
Government
Policies Infrastructures
Trade Space

Business
Model

Creative Demand Value Competitive Fans Creative

Creation Advantage
Markets Community
Creative
Innovation

Labour Creative Culture

People

Creative Training,
Education, and
© T.M. Simatupang Research
 On Defining Experience
• Wikipedia: A personally influential and powerful event
• Pine & Gilmore (1999, 12): An event that engages on a
personal level
• Perttula (2004, 30): A personally important experience
• Boswijk, Thijssen & Peelen (2005; 2006) A process of
purposeful acting upon the inner and outer impulses by doing
and undergoing that aims to render value
• LEO (2005; 2006; 2007): Meaningful experience is defined as a
multisensory, positive and comprehensive emotional
experience that can lead to personal change of a subject
person
 The Service
Economy
The Goods-Based
Economy
The Experience
Economy

The Agrarian
Economy
Now let’s talk about coffee…
Commodity - Grower 2 cents per cup

Goods - Manufacturer 5-25 cents per cup

Service – Corner Diner 50 cents -$1 per cup

Experience– Premium $1 - $4 per cup

Coffee Shop

Ultimate – Café Florian

Venice, Italy $5 - $10 per cup
 Competitive
position

EXPERIENCES!
The progression of economic value

Services

Goods

Commodities

(Pine & Gilmore, 1998) Pricing

 Conclusion
• The creative economy is based on human creativity
and innovation
• Creative industries is part of the creative economy.
• All terms, Creative Industry, Experience Industry and
Cultural Industry, represent the same
phenomenon/a, but from different viewpoints.
Thank You