According to Steve Miller, who heads up HSBC’s division for small business enterprises Indonesia’s prospects for weathering the global recession are good. “SMEs will continue to drive the Indonesian economy in 2009”, he said in Jakarta last month. Many international economists and business pundits would agree. Though things may get tough, Indonesia is better placed than most to come through comparably unscathed, they say. The reason being the lack of a sophisticated financial infrastructure, which is what got us into this mess to begin with, a low level of national equity participation, a healthy agro and extractive industry base, and a huge potential for the growth of creative exports.
In fact Indonesia’s potential for creative exports is almost certainly the wave of the future globally. The tiresome and crass manifestations of what I term “mass luxe” are now abruptly and distinctly passé. The new “luxe” in the very different world we are now entering will be the real and authentic.
Indonesia is probably the only place in the world today where large numbers of the population still possess the ability and the desire to make beautiful objects with their hands in a traditional manner and using traditional materials.
Thus the opportunity to greatly expand Indonesian creative exports is huge. Currently the nation’s creative exports account for employing roughly 5% of the workforce. Recognising this Minister of Trade, Maria Pangestu, has plans to increase this to 10% by 2016 and 13% by 2025 thereby doubling the employment levels in the sector.
That’s all very well but for this to happen Ms. Pangestu at Trade and her colleague, Sri Mulyani Indrawati, at the Finance Ministry, will need to play their part with an astute combination of promotion and getting out of the way, for it is not simply a question of making beautiful handmade things, Indonesia can do that in trumps, they have to be positioned in a way that makes them acceptable and desirable to retailers and end-users internationally. That usually requires the expertise of foreigners well acquainted with both the vagaries of doing business in Indonesia and the international market. Such people do not grow on trees.
Fortunately there are two companies that come to mind which can be used as excellent case studies on how to grow the nation’s creative exports. The first , Out of Asia, was started by Australian entrepreneur and now Indonesian citizen, Warwick Purser, who has paid his dues doing business here since the 1970’s. Started in the mid-90’s on US$10,000, Out of Asia has succeeded to the extent that four years ago Indonesian conglomerate Mitra bought in with a 70% share. Based in the village of Tembi near Jogyakarta, the company at full throttle employs up to 10,000 in Java and Lombok making by hand, disdaining all manufacture, what may be termed “interior accessories”, which are then sold internationally at all levels from Harrod’s to Target. The most expensive item retails at US$200, the majority cost less than $100. Such success does not come easy. It requires imagination, patience and perseverance. At the outset there was a 45% rejection rate, within 3 years this had reduced to 3%.
The second corporate exemplar is the jeweller John Hardy. Started by John Hardy, the man, back in the 70’s the company grew up in the rough and tumble of doing business in the foothills of Bali making “fashion jewellery’ using mainly silver and semi-precious stones and succeeded in establishing an international reputation for creativity and fine workmanship. In 1997 John Hardy, the company, was put on a new footing with the establishment of KTI as the Balinese production arm and John Hardy Ltd as the corporate HQ in Hong Kong with a marketing entity in the US. In 2003 the investment house 3i funded a US$30m management buyout to enable further international promotion and expansion. Since 1997 the company has grown and prospered. All has not been smooth sailing, however. Last year the company ran into an undeserved brouhaha over the emotive and murky question of the patenting of creative motifs. The essential fact is you cannot patent a traditional motif, period. Only your own design.
Given that the world will continue to desire and buy beautiful and well-made objects, particularly when they are affordably priced, the era of the authentic and the real is upon us, as opposed to that marketing chimera and unlamented contradiction that is ‘mass luxe’, or more commonly what are called branded luxury goods. That is not to say that the path to expanded creative exports is smooth or easy. The economic in this sector is as brutal in the village as in the factory. In the last quarter Out of Asia’s sales fell by 40%, with a corresponding lay-off of piece workers. At John Hardy/KTI some 140 of their 600 odd employees, at all levels including directorial, have been let go (not the grossly inflated figure of 400 I heard recently). The cull in John Hardy USA was proportionately a lot worse than that. A re-orientation to the home market and a non-strident ‘Buy Indonesian’ campaign in the creative field could be in order.
Given our civilisation continues, albeit chastened for the time being, companies such as these point the way forward. If true luxury is once again the Fabergé egg, then ‘mass luxe’ is now a beautiful handmade wicker basket.
And that, I am convinced, is one giant step for mankind.
The New Age is Upon Us....
And it ain’t all Sweetness & Light
The financial crash that began in Wall Street late last year is a global meltdown of our international financial system on the scale of 1929 right enough. What is not yet clear is, whether we are in for another Great Depression, the effects of which lasted well over a decade, or whether it will turn out to be a particularly hard landing, from which we shall emerge slimmer but wiser in 18 to 24 months time? The Crash of ‘29 we are told with hindsight was badly handled and there was actually no need for it to have turned into the worldwide depression it did. Only coming to an end, at vast human cost, in the camps and killing fields of WW2. The aftermath of which booted the USA and the world into new and unprecedented levels of production and wealth creation, and yes, freedom.
My own feeling is that we are at the end of a 60-year post WW2 cycle and are actually already well into the first decade of something altogether much more vast, something which will become the foundation for a sustainable future over the coming millennium no less. Consider, global warming and our mismanagement of the planet and its resources already promises dislocation on a catastrophic scale unless we collectively get our act together in a way the international order has flunked to date. Without such an imperative, do you think for one moment, that in the face of an enraged Gaia our various national governments will hesitate in seeking to protect themselves at the expense of their neighbours?
In other words, the financial crisis and the serious global trade recession we are now experiencing is a secondary and knock-on effect of the environmental challenge all but a few of us now accept is all-too real. History may be a bad guide to how the future will pan out, but it is an excellent mentor when it comes to opening the mind to the ebb and flow of the human condition over time. What’s coming our way will not be a repeat of 1929-40. We will face entirely new challenges and opportunities, and on an epic scale. However, we are not the same people we were in the first half of the 20th century. Societally we have evolved enormously, we already possess many of the tools we need to face the challenges that lie ahead and the skills to develop the new ones we will undoubtedly require. We cannot be certain, but if we’re smart we have the chance to live in harmony with Nature, having found the means along the way to reconcile our innate conflicting and divisive drives toward communality and individuality. On the other hand, history also shows us that if we give way to folly we can all too easily be thrown back into a Dark Age that can last centuries.
The planet, they say, has another 11 billion years to go before it’s swallowed up by a dying Sun and can get along very nicely without us. How long we as a species will be around and the quality of our lives while we are here, depends to very greatly on us. In the short 150,000 years or so that we’ve been around in the form that is recognisably us, we are the very first to be faced consciously with such a challenge. What a privilege... and how exciting! 60 million years ago the dinosaurs didn’t have the option. We could actually be headed for the sunny uplands of life on Earth, or failing that a truly dismal existence as we fight our way back over centuries.
Let’s not screw it up.... we might not get another shot.
