Indonesia in the Metaverse Era: Becoming a Hub for Creative Industry Innovation

Authors: Tuhu Nugraha and Adrian Zakhary*

Prologue: A Midnight Dream in Jakarta

Imagine walking through Jakarta at midnight, a city that never sleeps, filled with neon lights and bustling life. Suddenly, a vision emerges: Indonesia as a hub for innovation and development in the creative industry in the era of the metaverse. In this world, young Indonesian designers create virtual fashion worn by avatars globally, and local game studios release world-renowned titles.

How promising is this industry? According to research by Allied Market Research in December 2022, the total digital clothing market will grow from $498.7 million in 2021 to $4.8 billion by 2031. In 2023, the global metaverse gaming market is valued at $51 billion and is expected to grow at a CAGR of 38.2% to reach $1,300 billion by 2033. Nearly half of this market, or 48%, is dominated by metaverse gaming hardware.

Based on our research for a book on Indonesia’s Metaverse ecosystem, Indonesia is well-positioned to carve out a niche for creative content in the global Metaverse supply chain. The reasons are twofold: Indonesia is currently experiencing a demographic bonus phase, dominated by a young generation, and the country is rich in cultural diversity. Here are some strategies to realize this vision.

Chapter 1: Turning Potential into Reality

Education and Training

First and foremost, we need to prepare Indonesia’s young generation with appropriate education and training. The Ministry of Education and Culture should collaborate with relevant industries to incorporate a digital and creative curriculum into the national education system. This is not just about coding but also graphic design, storytelling, and even digital ethics.

Digital Infrastructure

Without fast and affordable internet access, this dream will remain just that—a dream. The government must invest in digital infrastructure, ensuring that the entire archipelago, from Sabang to Merauke, is connected to high-speed internet.

Chapter 2: Building a Conducive Ecosystem

Financial Support and Regulation

The government must provide fiscal incentives and financial support for startups and companies in the creative sector. In addition, supportive regulations, such as strong intellectual property rights and clear data privacy policies, will provide security for innovators to create. Collaboration between the Ministry of Tourism and Creative Economy and the Ministry of Trade is essential to educate industry players on the importance of managing intellectual property rights, not just nationally but also globally. Tax incentives should be provided for foreign fashion and gaming companies that want to invest in Indonesia.

Collaboration and Creative Hubs

Building creative hubs or business incubators focused on the creative industry will facilitate collaboration between artists, designers, and developers. Imagine a “Silicon Valley” for the creative industry in Indonesia, where brilliant ideas are born and developed every day. Cities like Batam, Bali, and Bandung have the potential to become centers of creative production in this industry. These cities already have a supportive ecosystem, including schools and universities related to design and fashion, a creative young workforce, and a growing creative industry.

Key stakeholders from the creative community, such as the Indonesia Creative City Network (ICCN), Nakama.id, Maja Labs, and the Bali Blockchain Center (BBC), already exist and need to be optimized to achieve these goals. Other supporting infrastructure in Indonesia includes Drezzo, a marketplace for digital fashion, and Bali, which hosts various web3 creative industry activities, including Coinfest and NFT Bali, annual events that have gone global.

Chapter 3: Embracing the Future with Innovation

Technology as the Main Driver

In the era of the metaverse, technology is key. The government needs to invest in research and development, fostering innovation through funding schemes and collaborations between universities and industries. Blockchain technology, virtual reality, and artificial intelligence are some of the areas that should be the focus.

Role of the Private Sector

The private sector, both local and international, plays a strategic role in the development of Indonesia’s creative industry. Through financial investment, they can facilitate the growth of start-ups and creative projects. Additionally, through mentorship, they can help enhance the skills and capacities of industry players. Furthermore, as consumers, they also open up a broader market for Indonesia’s creative products and services.

By contributing in various ways, the private sector becomes a crucial pillar supporting the sustainability and innovation of Indonesia’s creative industry. Their involvement will not only strengthen the overall creative industry ecosystem but will also help Indonesia achieve its vision of becoming a global center for innovation and creativity.

Chapter 4: Building a Global Network

Market Expansion & Branding

To truly become a global leader, Indonesia needs to look beyond its domestic market. Exporting creative products, from digital fashion to games, should be prioritized. This requires an effective global marketing strategy and a broad distribution network.

There needs to be close collaboration among all stakeholders in the creative industry to introduce these products to the global market. In addition to the above, the government and tourism industry players need to include web3 events in Indonesia’s national tourism agenda, marketed globally in an integrated manner. Indonesia can learn from how the Belgian government made Tomorrowland a global destination, or the Coachella music festival.

Events like NFT Bali, Coinfest, and other initiatives spearheaded by Indonesia’s creative community should be promoted more globally to strengthen Indonesia’s positioning as a creative hub in the global supply chain.

International Relations

Economic diplomacy and international relations play a crucial role in introducing and strengthening Indonesia’s creative industry on the global stage. Through various instruments such as cultural exchange, knowledge sharing, and multilateral forums, Indonesia can build beneficial relationships with other countries. This not only opens up opportunities for investment and collaboration but also serves as a platform to promote Indonesian talent and creative work.

With a structured approach to diplomacy focused on sustainability, Indonesia can leverage its creative industry as one of the pillars in “nation branding,” or the creation of a positive national image. This will not only broaden the market reach and open up new opportunities but will also enhance Indonesia’s reputation and image as an innovative and creative country in the eyes of the world.

The government can establish bilateral cooperation with countries that have the potential to strengthen the domestic creative industry, for capital investment or even skill transfer and human resource development, such as with China, Japan, Korea, and the United States or India. The government can also promote this in multilateral forums such as ASEAN, RCEP, G20, BRICS, etc.

Chapter 5: Ensuring Sustainability and Ethics

Sustainability

To ensure the sustainability of Indonesia’s creative industry, a holistic approach that encompasses environmental, social, and economic aspects is key. This requires cross-sectoral collaboration, involving the government, industry, academia, and the community in formulating and implementing policies that support sustainability. By focusing on sustainability, Indonesia’s creative industry will not only grow and develop but will also contribute to sustainable development goals, creating a lasting positive impact on society and the environment.

Key Stakeholders: Ministry of Environment, Ministry of Finance, creative industry associations, and financial institutions that will serve as investors for these projects.

Ethics and Inclusivity

To ensure that Indonesia’s creative industry grows in an inclusive and ethical manner, there needs to be a strong focus on copyright management, social justice, transparency, and accountability. This includes strengthening regulations, education, and dialogue among all stakeholders, including the Ministry of Education, Culture, Research & Technology, Ministry of Communication and Informatics, Ministry of Social Affairs, industry, academia, and community organizations like Maja Labs, BlockDevID, and MetaDev.

With an inclusive and ethical approach, Indonesia’s creative industry will not only advance justice and equality but will also build the industry’s reputation and sustainability. This will help position Indonesia as a responsible and innovative leader in the creative industry, both nationally and internationally.

Epilogue: Becoming the Rising Sun in the Metaverse Era

Returning to the midnight dream in Jakarta, we now see a clear roadmap towards a bright future. With collaboration, innovation, and a clear vision, Indonesia can not only participate in the creative industry revolution in the metaverse era but also lead it.

This dream is indeed ambitious, but with the right steps, it can become a reality. Welcome to a new era for Indonesia, a country that is not just chasing the rising sun but is becoming the rising sun itself, bringing light and innovation to the entire world.Top of Form

Adrian Zakhary, Founder of Maja Labs & Chairman of Web3 ICCN