International Conference on Global Education V

“Global Education, Common Wealth, and Cultural Diversity”

CREATIVE ECONOMY DEVELOPMENT TO INCREASE

LOCAL ECONOMIC COMPETITIVENESS

TIUR ROIDA SEMBIRING

Abstract

The purpose of this study is to determine whether the creative economy is able to
increase the competitiveness of the local economy. The economy has entered a new
phase which the source of competitive advantage has changed. Source of the latest
competitive advantage is innovation and creativity. Competitive advantage based on
innovation and creativity should be preferred because it has the durability and longer
term. The phenomenon of low interest and motivation for entrepreneurship Indonesian
youth today is a serious concern for many parties, including government, education,
industry, and society. SMEs problems related to the productivity, among others a lack of
protection of copyright on innovation and creativity. Small and Medium Enterprises
(SMEs) as part of the economy also should improve their competitiveness by
innovation. Creativity and innovation are closely linked with efforts to seize
opportunities in an increasingly competitive world, so that creativity and innovation is a
critical success factor in improving the competitiveness of the economy. Thus the
creative economy felt able to improve the competitiveness of local economies
surrounding communities armed with the knowledge, creativity, innovation can even
develop jobs. Furthermore, this paper is expected to enhance the economic
competitiveness of the creative for creativity and art creators a higher level.

Keywords : Creative Economy, Local Economic, UMKM

INTRODUCTION
The creative economy is an economic concept in the era of the new economy are
intensifying information and creativity by relying on ideas and stock of knowledge of
human resources (HR) as main production factors in economic activities. The structure
of the world economy undergoes a transformation is rapidly along with economic
growth, from a natural resource-based had gradually become based human resources
(HR), from the era of genetic and extractive to an era of manufacturing and information
services as well as the latest developments went into the era of creative economy.
The concept of the creative economy is also increasingly giving hope that more
optimistik when an expert in the field of Economics, Dr. Richard Florida of the United
States, author of The book “The Rise of the Creative Class” and “Cities and the Creative
Class” States: “all mankind is creative, whether he is a worker at the factory ofglasses or
a teen Street Central makes hip-hop music. But the difference is on its status (class), as
there are individuals who are specifically being in creative and got the economy profited
directly from these activities. Then place in cities that are able to create new innovative
products ensures the fastest, as the winner of the competition in the era of the creative
economy.”

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In Indonesia itself a creative economy starts to show up and get the attention of
the Government during the administration of President Susilo Bambang Yudhoyono
(SBY) in 2006. The Government, through the Minister of trade of INDONESIA, Dr.
Mari Elka Pangestu in 2006 launched the Indonesia Power Design in the ranks of the
Department of Commerce of INDONESIA, a government program that is expected to
boost the competitiveness of Indonesia's products in the domestic and export markets.
This program keeps rolling with created the program in 2009 (Presidential Instruction
No. 6/2009) as Creative by Indonesia President Susilo Bambang Yudhoyono marked by
creative viral holding of exhibitions includes 14 sub-sectors of thecreative industries
and food exhibition nusa 2009 include Indonesia's food industrycreativity by SMES.
Indonesia which is still at the level of developing countries, are building the
economy through micro, small and medium enterprises (UMKM). A wide range of
policies made by the Government to continue to encourage the growth and development
of SMALL MEDIUM ENTERPRISES in the fields of capital one. Micro, small and
medium enterprises (UMKM) is the largest segment of the national economy. SMEC is
also a strong effort faced a difficult economic situation, visible when the economic
crisis struck Indonesia SMEC remain able to survive, even SMALL MEDIUM
ENTERPRISES are able to make a contribution in the process of healing the national
economy (national economic recovery).
The DEVELOPMENT of the CREATIVE ECONOMY AGAINST the
COMPETITIVENESS of the LOCAL ECONOMY in MEDAN
The existence of creative economic trade in the city of Medan on some side has
given its own color for Medan city, because it has been able to provide an alternative for
citizens to obtain the needed goods at affordable prices. The creative economy is trade
business group structure in the bottom rung of world trade, not a few large employers
initiated his efforts as a small business medium at the beginning of his career.
Creative economy businessmen have been able to create a multiplier effect on the
development of the local economy in which the existence of such trade has prompted an
increase in demand for raw materials from agriculture, agro-industries, and industries.
As such, then the ekraf can develop the competitiveness of the local economy and
increase demand for labor and the variations of job opportunities available to the local
population, this condition will affect the increase in economic growth, the reduction of
unemployment, unemployment poor households, improve the welfare of society, and
can increase the long-term acceptance of local government sector taxes and levies.
Another impact of it is the rebuilding of the infrastructure and facilities by the
Government such as drainage, roads and other infrastructure in the area is cleaner, more
beautiful and more interesting to visit.
Table of the growth of small and medium business in Medan

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International Conference on Global Education V
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Year Household Percentage Labor Percentage

(Unit) (People)
2007 5.001 - 9.282 -

2008 5.309 6,15 9.429 1,58

2009 5.498 9,93 10.255 10,48

2010 5.758 15,13 11.467 23,54

2011 5.960 19,17 12.119 30,56

Source: Disperindag the city of Medan, 2011

According to McClelland in Bambang (2015), that a country will be prosperous if
the solicitor (entrepreneurial) has at least as much as two percent of the population and,
according to Bambang (2015) that the greatest option for future work is to become
business owners, small and medium-scale ventures is the main object of future
economic growth. Two important indicators in the developed countries and
aneconomically prosperous will be fulfilled, i.e. the low unemployment and high
foreign exchange mainly results from the export goods produced when entrepreneurs
can thrive. This is an opportunity that must be seized by the labor force due to
theentrepreneur in Indonesia is still minimal and forecast Bambang about job
opportunities in the future is to become a business owner is the motivation for our work
force, no longer waiting for the opportunity to work in the formal sector are very risky
with the termination of employment relationships and attachment.
Empowerment of the creative economy trade through structuring effect on the
development of the competitiveness of the local economy of a region, which will
increase the economic aspects of economic activities happening around the region.
Social aspects can increase order and comfort for businessmen as well as a creative
economic communities that buy. From the aspect of the site can organize the Setup
room for businessmen so there happen the manifest irregularity of traffic.
THE ROLE OF THE CREATIVE ECONOMY TOWARDS NATIONAL
ECONOMIC GROWTH
Creative economy (ekraf) since the last five years has continued to increase. Even
though it cannot yet be said to be significant, but every year the sector contributedat
least ekraf 7.13 percent GDP to the total national GDP. The creative economy is
subsector of 16, culinary, fashion, and craft is a subsector contributed the highest added
value.
Not only to take part in building the national economy, the creative sector of the
economy is also capable of absorbing at least 13.90 per cent of total personnel working

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“Global Education, Common Wealth, and Cultural Diversity”

in Indonesia. Of the total 15,959,590 manpower working in the creative sector of the
economy (year 2015) 48.56 percent are in the formal sector and 51.44 per cent are in the
informal sector.
In the period of 2010-2015 creative economy able to absorb 1,611,957 of labor in
Indonesia and increase the GDP of 10.14 percent each year.
THE ROLE OF CREATIVE INDUSTRIES IN INDONESIA
Creative industry plays an important role in the national and global economy
because it contributed to aspects of life both economically as well as nonekonomi.
Economically, creative industries play a role in creating a business climate, the
achievement of employment, fostering innovation and creativity, the creator of
renewable resources, and contribute positively towards the gross national income (Gross
National Product-GNP).
Based on the creative economy report of the Ministry of Commerce, the
economiccontribution of creative RI can be seen from some of the indicators of both
economic and non economic are as follows:
a. Impact on the social aspects
In addition to contributing to the economy, creative industries contribute to other
social economy. For example, to increased quality of life, increasing social
tolerance, even improved the image and identity of the nation.
b. Impact on the preservation of cultural
The important role of nonekonomi of the creative industries was instrumental in
building the culture, heritage, and local values. Creative industry based culture
created the Foundation of a strong local culture character. Creative industries are
able tofight for the rights of intellectual property (IP) for cultural heritage, and
cultural wisdom. Herbal medicine-meal, traditional food, traditional medicine,
traditional art, and traditional dress is a cultural heritage that can be protected as
INTELLECTUAL PROPERTY. In the field of very diverse technologies, such as
subak irrigation system,the preservation of forests inland tribes and other crafts,
cultural heritage of all the cultural heritage have the potential market and is a
product of the nation's creative industries
c. Level Of Education
Certainly the level of education is very necessary in competitiveness, to conduct an
innovation of course used very creative thinking so as to bring up the brilliant ideas
so that it can compete with the other. Community participation in educated 94,7% of
recorded ELEMENTARY SCHOOL, JUNIOR HIGH SCHOOL of 66,5%, as well
asliteracy of 99.4%.
RESEARCH METHODS
This research is qualitative research, i.e. research using an approach that

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International Conference on Global Education V
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emphasizes its analysis on the process of false assertion as well as an analysis of the
dynamics of the relationships between phenomena observed with the use of scientific
logic.
1. Object/key informant Research
The object of this research the author did in the creative economy trade 42 located in
different places, owned by Entrepreneur's creative crafts, printing industry, fashion,
and advertising. As a Key informant study was a craft business owners in thisbatik.
2. Methods Of Data Collection
Data collection methods used in this research are:
a. interview. The interview is doing a q & a with parties concerned to get the
information and data that it needs.
b. Obeservasi. Observation is observing it directly on the environment
c. Documentation done by finding and collecting the data, the source of the
information and materials obtained from the literature, books, articles.
3. Methods Of Analysis
The research method used is descriptive qualitative methods. According to
Moleong (2008; 6) qualitative research is research that holistically intends to understand
the phenomenon of what is experienced by the subject good behavior, motivation,
perception, nor his actions and descriptions in the form of words or language in aspecial
natural context and by utilizing a variety of scientific method.
Analysis tools are used to determine the initial SWOT is development strategy
that is one method to describe and evaluate the condition of a problem, project or a
business concept based on internal factors (in) and external factors (outside) i.e.
Strengths, Weakness, Opportunities and Threats. SWOT matrix used was qualitative
matrix.
RESULTS AND DISCUSSION
Geographically the town is situated on a Terrain of 30o, 3-3, 43o North latitude
and 98, 35o -98, 44o East longitude with 26,510 hectares (265.10 km2) or 3.6% of the
total area of North Sumatra. Thus, compared to other cities or counties, the terrain has a
relatively small area.
Geographical location of medan is highly strategic as the gate (entrance) activities
of trading goods and services, both domestic and foreign trade (import-export).
Creative economy began to reverberate since the onset of the crisis in Indonesia.
The economic crisis which imposes on the high cost of production goods import sites
related to high, high rates of JOB CUTS, and rising prices of export-oriented domestic
inputs, then dig into the ideological potential and creating unique items so that they can
target the domestic market is great, then the creative industry sector evolved is the heart
of the creative economy in the economic development, sourced from intelektuak

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“Global Education, Common Wealth, and Cultural Diversity”

creations that have economic value and benefit economical contribution it has against
the value of Indonesia'S GDP. In addition, the economic benefit is being able to dig into
the creative potential of the local nation Indonesia and digging up HUMAN
RESOURCES in the country especially the younger generation, because most of the
creative industry in Indonesia was involved by the younger generation.
Based on the results of the interview, observation and documentation on the
research object and do the analysis and selection of data research results thus
obtainedthe SWOT are as follows:
Strengths ( S )
1. Product quality
2. The availability of raw materials
3. The specificity of the product
4. Contribute significant economic
5. Create a positive business climate
6. renewable resource-based
7. Provide positive social impact
Weakness ( W )
1. The limitation of capital
2. Lack of knowledge in financial management, product development and marketing
3. Low purchasing power caused the public image that results in expensive product
including handicrafts
4. lack of varied products batik creation tailored to the desires of the market
5. lack of cooperation with the designer batik so always used for formal events and not
as fashion
6. lack of promotion and the limitations of foreign language
7. terdatanya data hasn't been creative industry groups performed by the Government
in this regard Deperindag
Opportunities ( O )
1. creative sector Development can lead to increasingly powerful media promotionand
distribution of the product.
2. creative Sector in the city of Medan gave an advantage in cooperation projections
3. The existence of a free market/export opportunities
4. The existence of community support
5. Create jobs
6. Batik as Indonesia cultural diversity needs to be developed

Threats ( T )
1. The public perception that assumed that buy batik cloth only when certain events
2. Competitors are increasing
3. The large number of industrial products in this industry of fabric can be easily to
modified
Based on the results of the SWOT analysis, then the creative industries batik
Medan Medan city growing provides a hope that in the development of his creative
entrepreneurs should be able to provide innovation and creativity against products batik.
The development of human resources of high quality fully harnessed and give one the
opportunity to run the creative economy as an economic concept in the era of the new
economy that prioritizes information and creativity by relying on ideas and stock of

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International Conference on Global Education V
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knowledge through self development, learning how to manage the financial, capital,
products and procedures for micro-credit services. The results of the SWOT analysis
provides some strategies that must be observed by the economic trade creative as
business owners batik in human resources development to improve their skill.
Strengthening Market
During this creative economy businessmen for batik in medan city in marketing
his product had enough strategic places or locations of its existence the Marketing
Function here as a medium to bridge the interaction between companies with customers.
The other role is to facilitate the process of identification of product opportunities,
defining market segment, and the identification of customer needs. Part of marketing is
also specially designed communication between companies with customers, setting a
price target and designing the launch and promotional products.
Mentoring And Coaching
One of the problems often encountered by the perpetrators of the creative effort
was the lack of mentoring and coaching in the empowerment of SMES. So that
mentoring programs conducted both by the Government, STATE-OWNED
ENTERPRISES and other institutions have yet to get the maximum results. One of the
factors that cause the program hasn't been fullest human resource development is still
less does it mean that businessmen should be given the ability of skill and knowledge in
order to be proactive in carrying out their activities as business owners such as venture
capital turnover.
Mentoring programs in terms of structuring good management required by the
Creative Economy. Mentoring and coaching programs can be in does with viewed
management functions within the company itself among other things needed is financial
governance management, production, and marketing strategies it is meant the
entrepreneur as business owners should have a good skill and can be relied upon and
may be able to because the economy competitive power extremely creative potential for
productive activities and income generation.
Creativity
The nation of Indonesia since the first, known as a creative nation, it can be seen
from the multicultural nation of copyright works, and karsa inherited ancestor. The
creativity of the nation of Indonesia looks at various methods of processing raw
materials into finished goods, the ability of the digging of the resources originally not
fruitful experience something that is worth menjai, and creativity in creating art and
cultural products.
Raw Materials
Raw materials are the most important but intangible in the creative industry is
creativity. Other raw materials is crucial in the sustainability efforts is the raw material

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of the product. The nature of the raw material industry creative can be updated but the
number is limited, such as wood and rattan, cannot be updated for example precious
metals, or made a great price such as availability of electricity.
Competitor products
Understanding of the competing product is important for positioning the new product
successfully and can be a rich source of ideas for the design of products andproduction
processes. Competitor analysis is done to support the many activities of the beginning to
the end.
Changes in technology
Subsector interactive games, printing, advertising, film, video and radio are very
vulnerable to changes in technology. Technology investment in the subsector relatf
high, and when technology changes appeared with more sophisticated technologyand
entrepreneurs are required to replace the technology so as not to compete. The challenge
in dealing with is employers attempted to be more knowledgeable ofthe more advanced
technology, so that it can continue to be in the forefront.
SUMMARY
The creative economy is an economic concept which made creativity as the
Foundation of its activities. Creative industries is the heart for creative economy. This
creative economy development has many benefits, both economic benefits or benefits in
the non economically. In the process, the creative economy has many opportunities and
challenges. Opportunities and challenges in the external analysis is closely related to the
industry. Opportunities can be found in the creative industi is creativity businessmen,
mentoring and coaching, reinforcement of the market. While the challenge for creative
economic development in Indonesia is a competitor's products, availability of raw
materials and technological change. In the implementation of the creative economy is
able to capture the opportunities mentioned above, and is capable of facing these
challenges, then the creative economy industry will be able to become a crutch for the
competitiveness of local economic development.
REFERENCES
Moleong, L.J, 2008. Metodologi Penelitian Kualitatif (Edisi Revisi) Jakarta PT Remaja
Roskadaya
Murdaka Eka Jati, Bambang, dkk. 2015. Kewirausahaan Technopreneurship Untuk
Mahasiswa Ilmu-ilmu Eksakta. Yogyakarta: Penerbit ANDI
Nugroho, Puguh Setyo, 2008. “Analis Industri Kreatif”, Jurnal Ekonomi Desember
2008
Tim Dept. Perdagangan RI.2009. Studi Industri Kreatif Indonesia. Update. Jakarta.
Dept. Perdagangan Republik Indonesia

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