The creative industry has long been a key driver of global economic growth. With the rise of Artificial Intelligence (AI), this sector is poised for an even greater transformation. AI offers unparalleled potential to enhance creativity, productivity, and innovation in various domains, including art, music, film, and design. In the global landscape, Indonesia has the opportunity to position itself as a leading player in AI-driven creative industries by leveraging its rich cultural heritage, dynamic digital economy, and growing AI capabilities. Additionally, with a population dominated by Gen Z, highly adaptive to digital transformation and innovation, Indonesia has a unique advantage in fostering a tech-savvy workforce that can drive AI-powered creativity forward.
Indonesia can potentially serve as the global production hub—or the creative industry’s “kitchen”—for AI-driven content, particularly in film, animation, gaming, and modest fashion. By capitalizing on its growing talent pool, cost-effective production capabilities, and AI adoption, Indonesia can become a preferred destination for international creative projects.
This article explores how Indonesia can prepare itself to become a hub for AI-powered creative industries, addressing key challenges, opportunities, and strategic pathways.
AI Applications in Creative Industries
AI has already demonstrated its capabilities in transforming creative industries worldwide:
Film and Animation: AI enables advanced visual effects, automated editing, and realistic deepfake technologies, making production more cost-efficient and high-quality. Indonesia’s animation studios are already gaining international recognition, and AI can further enhance their capabilities. The Indonesian animation industry has experienced rapid growth in recent years. According to the Indonesian Animation Industry Association (AINAKI), in 2020, there were around 120 animation studios in Indonesia. Between 2015 and 2019, the industry grew by 153%, averaging 26% per year. Moreover, the film, animation, and video (FAV) subsector significantly contributed to Indonesia’s GDP, growing by 6.31% in 2021 and adding Rp 2.69 trillion. These numbers highlight the immense economic potential of the industry, reinforcing the need for AI-driven enhancements to further propel its growth.
Gaming: AI is used to develop intelligent non-player characters (NPCs) and create dynamic, immersive gaming experiences. With Indonesia’s growing gaming industry, integrating AI can increase global competitiveness. According to Indonesia’s state news agency, Antara, Indonesia has the largest gaming market in Southeast Asia, accounting for 43% of the region. It is estimated that by 2025, Indonesia will have 192 million gamers, further solidifying its role as a major player in the global gaming industry. Additionally, Indonesia ranks as the 16th largest gaming market in the world, making it one of the most promising and fast-growing gaming industries globally, with continuous annual growth.
Modest Fashion: AI-driven trend analysis and generative design tools help predict modest fashion trends and personalize collections. As Indonesia is a global leader in the modest fashion movement, AI can enhance the country’s position by providing innovative, scalable solutions for sustainable and customized fashion. AI can also be utilized for market research, identifying consumer preferences, and forecasting future modest fashion trends. Additionally, AI-powered virtual consultants can assist designers from the ideation phase to product development, market access, and digital marketing strategies, ensuring they can compete in the global industry. According to the State of the Global Islamic Economy (SGIE) 2023 report, Indonesia ranks third among 81 countries with the largest Islamic economy. Indonesia also has the world’s largest Muslim population, supported by rich cultural heritage and a vast young workforce. These advantages present a significant opportunity for Indonesia to dominate the global halal industry, including the modest fashion sector.
By focusing on these sectors, Indonesia can create an AI-powered ecosystem that strengthens its reputation as a global creative production hub.
Comparative Analysis: Learning from Global Leaders
Several nations have already positioned themselves as leaders in AI-powered creative industries:
United States: Silicon Valley has become a hub for AI innovations in entertainment, gaming, and digital media.
China: With state-backed AI investments, China has rapidly advanced in digital content creation, gaming, and AI-driven art.
Europe: Countries like the UK and France have successfully merged AI with fashion, music, and digital art.
Indonesia must learn from these nations by fostering an ecosystem that supports AI adoption in creative fields through investment, policy frameworks, and education. By aligning its strategies with global best practices, Indonesia can create an environment that nurtures innovation, enhances competitiveness, and leverages its strengths in animation, gaming, and modest fashion. This approach will enable Indonesia to solidify its position as a major player in the global AI-driven creative economy.
Key Factors for Indonesia’s AI-Creative Industry Success
To establish itself as a global AI-driven creative hub, Indonesia must focus on strengthening technological infrastructure, developing talent, implementing supportive government policies, fostering industry-academic collaboration, and integrating into the global market. Technological infrastructure plays a crucial role, requiring expanded high-speed internet access, particularly in rural areas, along with advancements in cloud computing and big data capabilities. Additionally, Indonesia needs to support AI research and development through digital innovation hubs.
In terms of talent development, integrating AI and creative technology into higher education curricula, upskilling digital and creative workers through vocational AI training programs, and offering scholarships for AI-related studies are essential steps. Government policies and regulations should foster AI innovation while ensuring ethical AI practices, providing tax incentives for AI-based startups and creative businesses, and strengthening intellectual property rights for AI-generated content.
Industry and academic collaboration will be key to accelerating AI adoption in creative fields. Establishing partnerships between AI firms and creative institutions, encouraging knowledge transfer through joint research projects, and organizing hackathons and competitions can significantly boost innovation. Furthermore, Indonesia must integrate into the global market by promoting AI-driven creative products through international exhibitions and platforms, partnering with global e-commerce and digital content platforms, and attracting foreign investments to enhance its creative AI ecosystem.
The government also needs to encourage creative industry players to develop Digital Intellectual Property (Digital IP) and expand into global markets. Additionally, the government must establish clear regulations regarding Digital IP that align with global agreements, ensuring Indonesian creators receive proper recognition and protection in the international market. Digital IP ownership is crucial for long-term competitiveness, enabling Indonesian creators to commercialize their work beyond traditional boundaries. By securing their rights and integrating AI, Indonesian creators can position themselves on a global stage, ensuring sustained growth and economic benefits.
Challenges, Risks, and Ethical Considerations
Despite its potential, Indonesia faces challenges in developing an AI-driven creative industry:
Limited AI Talent Pool: Solution: Establish AI-focused educational initiatives and international exchange programs. This includes the creation of vocational schools, open online courses, and the promotion of AI integration in vocational high schools and universities to ensure widespread access to AI education and skill development. To incentivize young talent to pursue AI-related skills, the government should provide scholarships, facilitate industry link-and-match programs, establish AI-focused incubators, and encourage mentorship programs with leading AI practitioners. Furthermore, collaborations with international AI firms and research institutions should be strengthened to provide exposure to global best practices.
Infrastructure Gaps: Solution: Accelerate government and private sector investments in digital infrastructure. In the short term, the government needs to create pilot regions and special creative economy zones supported by adequate infrastructure, such as in Batam, Bali, and Bandung. These areas can serve as innovation hubs, attracting investment, fostering talent, and driving AI-powered creative industry development.
Regulatory Uncertainty: Solution: Develop clear AI governance frameworks and align with global best practices. This includes collaborating with industry associations and researchers to establish ethical AI standards that ensure responsible innovation and fair practices in Indonesia’s creative industries. Ethical considerations include preventing AI bias, ensuring transparency in AI-generated content, protecting intellectual property rights, and mitigating the risk of job displacement. Additionally, efforts must be made to ensure that AI-generated content aligns with cultural sensitivities and respects consumer privacy. Additionally, the government should implement a regulatory sandbox for AI-based innovations by fostering partnerships with industry and academia. This will provide a controlled environment for experimentation, ensuring that AI-driven solutions align with both national and international standards while promoting responsible AI development.
Market Competition: Solution: Differentiate Indonesia’s AI-powered creative industries by integrating traditional cultural elements and positioning itself as a production powerhouse. This is further supported by the availability of young, competent, and competitively priced talent. Since AI-powered industries such as animation, film, and gaming can be produced from anywhere in the world, Indonesia’s workforce can serve as a strong advantage in attracting international projects and investment.
Conclusion
Indonesia is well-positioned to become a leading player in the global AI-driven creative economy. By investing in technological infrastructure, fostering AI talent, implementing supportive government policies, and strengthening industry collaborations, Indonesia can create a sustainable and competitive AI-powered creative ecosystem.
By focusing on AI-driven production in film and animation, gaming, and modest fashion, Indonesia can establish itself as a leading global ” cloud kitchen” of creative industry production, supporting international content creation while strengthening its domestic capabilities. The government’s role in encouraging Digital IP ownership and global market integration is essential in ensuring long-term success. With strategic planning and multi-stakeholder cooperation, Indonesia can transform its creative sector into a global powerhouse in the AI-driven era.
