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Innovation, Regulation and Local Player’s Dilemma

Adjie Priambada - 10 October 2015

The local digital creative industry is currently mushrooming nowadays. Innovations come and go, although sometimes regulation stands between them and and their success. During the second session of The New Wealth Nation: Creative Industry in ASEAN Economic Communities workshop, the attending speakers discussed about how innovation in creative industry relates to government’s regulation.

Within that very session, Endeavor’s Board Member Dr. Raoul Oberman, Blibli’s CEO Kusumo Martanto, and DailySocial’s CEO Rama Mamuaya shared their opinion.

The potential and advantage that local players should consider

During the first session, it was stated that Indonesia is still searching for the best digital data and information management format. Will it be open like in the U.S, or enclosed like in China?

Oberman tried a different perspective. He was certain that Indonesia, with all of its potential, should be able to create new options, being a new superpower. There are three things that support this argument of his.

First, the vast penetration of e-commerce industry and human resources that can be Indonesia’s main force. Second, the open society characteristic possessed by Indonesians, making them most likely to adapt, even faster than some of giants he believed, and is open to tech development. Third, Oberman is sure that Indonesians’ creativity is really high.

Martanto also believed that e-commerce can be a media that facilitates Indonesians to get what they need. Mamuaya added by saying that entrepreneur, who is strongly related to creative industry, lives with or though problems. “Indonesia is a problematic country, so entrepreneurship may most likely strive here,” he said.

From the market point of view, Indonesia indeed is a very prospective country. In reality, there’s no local player coming out victorious although facing tough competition from foreign players. All speakers agreed that this should be considered as an opportunity by players who really understand the market.

“In other countries, local players dominate, such as Alibaba in China and Flipkart in India,” Martanto stated.

Issues faced by players of creative industry

Although possessing mouth-watering potential, Indonesia also offers its own challenges. So far, the most encountered issue for e-commerce players would be payment and logistic. Lately, regulation becomes another issue to solve.

According to Mamuaya, regulation is still unable to catch up with the vast growth of innovation, be it in Indonesia or other part of the world. Unfortunately, it’s the one that slows down the growth in Indonesia.

“Regulation can’t and will never can catch up [with innovation]. This is because the scheme is never designed to be as flexible as innovation. This is why regulation is always a barrier,” Mamuaya explained.

Meanwhile, Martanto stated that SME has always been Indonesia’s saviour in crisis period. The challenge is to get them to the next step.

“Behavior or culture [more or less] influences the growth of innovation. [...] There are still many SMEs in Indonesia that regard product packaging as a cost, not a [long term] investment,” he said.

With more than 250 million of population, Indonesia’s main advantage would be the market’s potential. There’s no local player that comes out a winner because there’s no formula found out for that. Yet.

Local players should keep on trying, no matter what. It’s also essential to understand the local taste, especially if acquiring more users is the main focus.

 

Translated by Rifki Aria Nugraha

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