Creative hubs spur innovation - but also a potentially growing digital divide

The trend in establishing start-ups, collaboration and “freelancing” contributed to the growing market of co-working and virtual spaces. www.shutterstock.com

In Indonesia, creative hubs such as co-working spaces and makerspaces are becoming places where original ideas are turned into action. However, while their growth may spur innovation, it may also worsen the digital and economic divide between cities and rural areas.

Space for creativity

Creative hubs is a term made popular by the British Council to identify “a place, either physical or virtual, which brings creative people together”.

In Indonesia, most of these hubs come in the form of co-working spaces (membership based working space), makerspaces (eg, workshops with communal production tools), or creative spaces (eg, independent art galleries).

All of these spaces provide an environment where ideas can thrive and plans can be materialised. Code Margonda in Depok, West Java for example, is home to several startups. Whereas Makedonia in Jakarta lends 3D printers to (high school) students allowing them to experiment for free.

Ngalup, a co-working space in Malang. Author provided (No reuse)

These spaces in community buildings allow new ideas and approaches to flourish. The development of such spaces in Indonesia grew steadily in Bandung, Jakarta, Surabaya and Yogyakarta between 2002 and 2010. Jakarta saw several co-working spaces emerge between 2010 and 2012. The rapid growth of these hubs is shown in the graph below.

However, as shown above, a real surge took place between 2012 and 2014, in which the number of hubs tripled within only two years. The shift towards digital technology in the last five years has made networks of ideas and individuals become more important than permanent physical space.

The trends in establishing startups, collaboration and “freelancing” contributed to the growing market of co-working and virtual spaces. Co-working spaces answer the need of individual freelance workers who could never see their needs accommodated by the mushrooming coffee shops with limited (but complimentary) wi-fi connection.

The rise of co-working spaces was therefore timely. It also signified the growing creative and tech sector in the world’s fourth most populous country.

Creative hubs are unique – and its ecosystem dynamic

The rise of co-working spaces is both a social and economic phenomenon, especially in relation to the rise of digital startups and internet economy. Among the younger generations, spending productive time in co-working spaces has become a new need - and norm.

This results in a landscape of creative hubs that is far from homogeneous. Some hubs such as Makedonia and Code Margonda are built on the principles of independence with a “Do-It-Yourself” flair. These hubs emphasise the importance of community and collaboration.

Meanwhile, at the opposite end of the spectrum we have hubs operating off the back of venture capital funds (eg, Cre8 backed by Kejora Venture, EV Hive backed by East Venture), providing them with more resources to invest in buying or renting properties and setting up flashy work spaces.

Venture capital-backed spaces have more advanced business planning. This makes up for their lack of engagement with already established individuals and networks. The differences between capital and community driven co-working spaces have created tensions between these spaces.

These differences are also at the source of a potentially growing divide. As has been pointed out by other writers, these co-working spaces may become just another silo of “isolated digital entrepreneurs” without real connection to other sectors of the economy. In this sense, co-working spaces may perpetuate already existing inequalities in infrastructure, access and opportunity.

This is where the government can come into play by levelling the playing field.

The Indonesian government, through its Creative Economy Council (BEKRAF), should intervene by establishing more creative spaces outside Indonesia’s major cities.

Challenge and Prospect

Owners of “grass-root” creative hubs in Indonesia are generally resilient. They have learned, often the hard way, to be adaptable from the very beginning. As the market is still volatile, creative hub managers have a tough task in building their product from scratch, educating their customers whilst staying true to their values and products.

As the market still needs to be made aware of the services offered by co-working spaces, financial sustainability becomes the most imminent issue to tackle. This has led them to be innovative in their operations. As attracting members has proven to be difficult, creative hubs’ main source of income is gained through monetising programs (eg, running workshops, holding seminars, etc). These finding in our 2017 survey findings can be seen in the graph below.

Despite all these challenges, space managers show a healthy amount of optimism when it comes to predicting the future. From our survey, hub managers show a glowing confidence in sector, with an average optimism of 8.275 (on a scale of 0-10) based on our question on the outlook of creative hubs. An optimism that is worth sharing, if the whole sector can find a bigger space for inclusivity.