Keywords

Introduction

Indigenous businesses play a crucial role in the economic and social empowerment of Australia’s Indigenous Aboriginal and Torres Strait Islander people through the generation of wealth and reinforcement of the long history and pride of the nation's first people (Altman, 2007, 2009; Collins et al., 2016; Evans et al., 2021; Foley, 2000; Shirodkar et al., 2018). These enterprises are a vital source of employment and empowerment for Indigenous people, especially in regional and remote areas (Hunter, 2013, 2015; Indigenous Business Australia, 2018; Supply Nation, 2020). Various stakeholders primarily led by the Ministry of Indigenous Affairs in the Office of the Prime Minister and Cabinet, who are the custodians of the National Business Sector (NBS) strategy (Australian Government, 2017), have led interventions and support mechanisms for Indigenous Business Enterprises (IBE).

The National Business Sector strategy and other extant studies outline barriers such as ‘historic economic marginalisation, low intergenerational wealth transfer, and the ongoing impact of poor education, employment and health outcomes’ (Altman, 2007; Foley, 2004; Hunter, 2013, 2015). Historical and contextual challenges, including low education levels and general exposure to business mentoring, also influence the extant barriers. These challenges negatively affect Indigenous people’s participation in entrepreneurial activities over generations (Jacobs, 2017). First Nations enterprises require additional business support, access to information and access to capital to establish and grow their businesses (Australian Government, 2017, p. 6). The impact of these barriers on enterprises is more eminent in regional rural areas than urban areas where the pressure for access to capital, basic infrastructure and business support services is high. Between 2006 and 2018, there was a 74% increase in the number of businesses operating in the First Nations business sector (Evans et al., 2021). This growth translated to an increase in the number of jobs created, totalling 22,000. Although data collection on jobs and new entrants is scarce, government reports noted that there are between 12,000 and 16,000 businesses in the sector, with an estimated increase of 2200 (Department of Foreign Affairs and Trade, 2019). It is important to note that the relatively low numbers of Indigenous business enterprises relative to non-Indigenous ones are not exclusively an Australian phenomenon. However, it is common globally in countries with Indigenous populations worldwide (Dana & Anderson, 2007).

This book chapter examines the policies and programmes in place to support Indigenous Business Enterprises and whether there is an effective integration of technology platforms to enhance financial inclusion as set out in the National Business Sector strategy. The chapter draws insights from major extant work undertaken to achieve similar objectives, such as Charles Jacobs’ 2017 Research Report, which evaluates the problems of Indigenous business policy. Hence, the chapter consolidates previous work in this evolving and dynamic study area.

Literature Review

The broader conversation of the participation of First Nations citizens in the economies of their lands is a long, ongoing one which is eminent across various First Nations and is beyond the scope of this chapter (Collins et al., 2016). Scholars such as Altman, Foley, O’Connor and many others have covered First Nations’ participation in the Australian economy from various perspectives (Altman, 2001; Commonwealth of Australia, 2014; O’Connor, 2012). A crucial part of this conversation has been on the definition or characterisation of an Indigenous business enterprise. Various works have debated what constitutes an Indigenous business in Australia (Commonwealth of Australia, 2014; Forrest, 2014). A key definition source is the Indigenous Procurement Policy, which categorises Indigenous business enterprises as businesses that are 50% owned and controlled by Indigenous people. Others, such as Supply Nation, give official certification to businesses with 51% Indigenous ownership, whereas the Australian Bureau of Statistics (ABS) defines a business with at least one Indigenous owner as Indigenous. The ABS’s definition has been criticised for undermining and not recognising business enterprises run by couples where there is an Indigenous and non-Indigenous spouse. This research relates to private micro, small and medium businesses that are private enterprises that operate for-profit like any other business and have a wide variety of definitions, including sole traders, 50% Indigenous ownership (e.g. between Indigenous and non-Indigenous spouses), 25% Indigenous ownership and employment of a particular percentage of Indigenous people (Forrest, 2014). These enterprises are subjected to harsher challenges and barriers.

It is essential to understand the historical and contextual challenges that IBEs operate under, potentially impacting their performance (Altman, 2005; Bodle et al., 2018). Extant studies on First Nations’ economies have focused on various aspects of framing the Indigenous economy. Frameworks such as Jon Altman's hybrid economy framework have helped frame the economic development problem Indigenous people face (Altman, 2001, 2007). This has been useful in educating scholars about the importance of not using a generic performance evaluation approach for Indigenous business enterprises (Altman, 2005, 2007). Altman asserts that the ecosystem (including the policy framework) that supports Indigenous people does not have a sound understanding of the makeup of this economy, which comprises market, state and customary components that operate in linkage and interdependencies (Altman, 2001, 2009). Transdisciplinary research on First Nations from a discipline such as economics, business, humanities and law has identified diverse resource and economic factors or barriers that negatively impact the well-being and impact of ISBEs (Hunter, 2015; Russell-Mundine, 2007; Sanders, 2016). These include historical marginalisation, weak conducive policies and programmes, limited access to capital and general financial inclusion in the financial ecosystem (Collins et al., 2016).

The government is critical in enacting policies and implementing programmes to support IBEs. Other stakeholders in the ecosystem include non-governmental organisations and representative bodies such as chambers of commerce. Relationship building is a crucial aspect of life among First Nations (Collins et al., 2016; Russell-Mundine 2007). There is a need to examine this in the context of IBEs and to establish networking opportunities. Thus, understanding the policies, programmes, financial inclusion challenges and prospects for networking is an essential antecedent to reframing support systems for IBEs. This is the gap our research seeks to address as the foundation for having a conversation with the IBEs to establish whether there is justification for developing a framework to address the gap. This is depicted in Fig. 1 as a conceptual framework which assumes a similar three-dimensional approach used by Altman focusing on policies, programmes, financial inclusion and networking opportunities. Once this preliminary foundation has been established, an Indigenous approach to establishing IBEs’ voice and evaluating these issues will be undertaken to develop a resource informed by the IBE's voice.

Fig. 1
A framework demonstrates the Indigenist Enterprises' Voice and Policy and Programme audit as a key element. The One Stop Portal provides users with access to a variety of components, including the Policy and Programme Tracker, Financial Inclusion Tracker, and Networking Tracker.

Conceptual framework

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Methodology

In conducting this research, a secondary data-based exploratory approach was utilised to collect data. In summary, the overarching objectives outlined in Fig. 1 were to:

  • To identify and evaluate relevant broad government policies and programmes (and other white papers and research work) that deal with Indigenous people (Federal and State).

  • To identify Institutional representative bodies that target Indigenous peoples’ participation in business enterprises, specifically to identify, map and evaluate their programmes.

  • To identify comparative international government policies and programmes that specifically target Indigenous peoples’ participation in business enterprises to draw some lessons and benchmark practices.

This review was used to develop foundations for a potential one-stop integrated portal outlined as the conceptual framework.

Findings

Policy and Programme Review

The overarching Federal government policy that directs the government's commitment to developing the Indigenous business sector is the Indigenous Procurement Policy (IPP). This focus is replicated across different states and territories (Jacobs, 2017). A key output from the policy and programme review is evidence that the Commonwealth and state governments have various policies and programmes to support Indigenous business enterprises. In his Research Report, Jabobs (2017) identifies mainstream vital policies and programmes. Table 1 outlines policies and programmes not captured by Jacobs, which reflect the increase in focus on supporting the Indigenous business sector by the various Australian jurisdictions.

Table 1 Commonwealth, state and territory Indigenous intervention policies and programmes
Full size table

Federal Government Policy Focus

Indigenous Procurement Policy (IPP)

The anchor policy of IPP that the Federal government uses was introduced on 1 July 2015 to give Indigenous businesses enhanced opportunities to win Commonwealth contracts. Ideally, the IPP should leverage the Commonwealth’s annual multi-billion procurement spend to drive demand for ‘Indigenous goods and services, stimulate Indigenous economic development and grow the Indigenous business sector’ (Australia Government, 2015; DIPMC, 2015). It is important to note that before the IPP, Indigenous business enterprises had a very insignificant share of Commonwealth Government contracts. For example, between 2012 and 2013, the value of contracts by IBEs from the government was worth $6.2 million or 0.02% of the total contracts (Jacobs, 2017). On the introduction of the IPP, this figure increased by a factor of 46%, translating to a total value of $284 million.

In principle, a vital advantage of the IPP lies in its emphasis on ensuring that IBEs are awarded contracts based on their capacity and ability to deliver products and services that meet the required standards stipulated in the government tenders. However, there are some questions as to whether procurement officers in government stick to the guidelines regarding ensuring the IBEs strictly meet the requirements.

  1. a.

    Foreign Affairs and Trade Economic Diplomacy Charter

The Foreign Affairs and Trade portfolio released a Charter in 2015 that outlines the range of services available to Australian businesses pursuing opportunities overseas. There is a specific focus and provision for requirements of Indigenous Australian businesses. The Charter and economic diplomacy agenda provide support for Indigenous Australian businesses by providing opportunities for tapping into overseas markets and providing general support services related to conducting business overseas (DFAT, 2019).

State and Territory Governments’ Policy Focus

Multiple policy initiatives across all states focus on supporting Indigenous Business Enterprises. Jacobs (2017) notes the different levels of commitment by the different states, which creates a gap for a coherent one-stop portal that could harness all these initiatives. Whilst several efforts have been made by the Council of Australian Governments (COAG) to discuss this issue, there has yet to be a concrete finality. States and territories are committed to state-specific Indigenous procurement policy and business targets, and support services for ISBEs (COAG, 2016, p. 4).

New South Wales Government’s Policy Focus

In line with the IPP, the NSW government aims for Indigenous-owned businesses to be awarded at least three per cent of the total number of domestic contracts for goods and services issued by NSW Government agencies by 2021 (NSW Chamber of Commerce, 2019). The NSW Procurement Board is given leeway to allocate specific targets to agencies or for different expenditure categories if it deems it necessary to enhance the accomplishment of the set targets.

Evaluation of Integration of Federal and State Policies

There is an overlap of policies among the state and federal policies, even though they are all primarily driven by the focus on an Indigenous procurement focus. The Commonwealth’s policy has set parameters of targets to be accomplished by the states, but the states have factored in various elements of their components of the policies and targets. For example, in the thresholds of contracts and concentration on specific industry sectors, NSW’s initiative in construction is not necessarily national (DFAT, 2019).

Policy Impact Assessment

Assessment of the impact of policies and programmes is a continuous ongoing challenge which must consider emerging variables that are changing the nature of implementing the policies and programmes. For example, in the case of the IPP, the various targets and thresholds across the different states make it difficult to assess the policies and programmes in place collectively. Moreover, focusing the impact assessment on the achievement of these targets alone needs to provide a detailed picture of the actual overall impact (if any) on the livelihoods of Indigenous communities from which these Indigenous businesses originate and operate. However, in principle, there has been an incremental improvement in the number of IBEs accessing Commonwealth contracts since the inception of the IPP. Regarding value between 2015 and 2017, IBEs had access to contracts worth $594 million. This was spread across 1000 IBEs and 4880 contracts. These contracts were also spread across diverse industry sectors ranging from clothing, information and communications technology, construction and recruitment to legal and financial services.

  1. a.

    Reflections on Validity of Measurement Indicators of IPP

There is an ongoing debate on measuring the impact of the IPP policy since it is the overarching policy used by the Commonwealth government and state governments to enhance Indigenous businesses’ participation in the economy. Jacob’s (2017) white paper on policy strategy evaluation raises some fundamental issues regarding the impact assessment of the IPP policy. He highlights the potential flow of using contract numbers as opposed to monetary value in measuring the impact of IPP policy. The critical gap with this approach is the possibility of creating an avenue for government departments to ‘tick off targets by enabling figures to be boosted by vast numbers of small contracts’ (Jacobs, 2017). This does not translate into any meaningful empowerment of the Indigenous enterprises. These potential inconsistencies are likely to create a situation where these overstated numbers of contracts inflate the actual level of economic activity by Indigenous business enterprises. Critics of the IPP drive argue that, in some ways, it represents some form of protectionism which might end up defeating its stated objective of economic development and empowerment (Piga & Tatrai, 2015). Other criticism relates to the restricted nature of government procurement, which can result in the IPP benefiting a limited scope of the Indigenous business sector. The construction industry is cited as an example of a sector that has developed a dependency on the IPP and has not helped IBEs develop appropriate business skills to survive in an open competitive market. For example, in 2015–2016, 60% of significant IPP contract spend (contracts over $10,000) was awarded to Indigenous businesses in the construction industry (Austender, 2017). Notwithstanding these different views, the IPP has been a critical enabler of empowerment for IBEs in Australia.

Government Programme Review

Federal Government Programme Focus

  1. a.

    Indigenous Business Sector Strategy

The National Business Sector Strategy (NBS) was an initiative set out by the government and Indigenous stakeholders to develop a long-term roadmap for empowering First Nations. The strategy sets out a clear economic development framework with a focus on business support, access to finance, stronger connections and harnessing of knowledge (Australian Government, 2017). The NBS also reiterates the scope of challenges faced by ISBEs, for example, access to timely and, in the case of IBEs, culturally appropriate forms of business advisory services and information on new market opportunities. Of particular importance is the challenge of access to finance, which enhances the financial inclusion of IBEs given the historical marginalisation of Indigenous people from mainstream financial services whose conditions of accessing financial products did not and still do not consider the complex nuances of the Indigenous people's context.

NSW Government Programme Focus

The NSW government has several programmes that are in place to support ISBEs. Two key examples are outlined below:

  1. a.

    Opportunity, Choice, Healing, Responsibility, Empowerment (OCHRE) Initiative

Part of the NSW Government Plan for Aboriginal Affairs includes the OCHRE initiative. This programme aims to support an inclusive approach to supporting Indigenous communities to actively participate in their economic, social and cultural affairs. Economic empowerment through the promotion of ownership of business enterprises is one of the pillars of OCHRE.

  1. b.

    Small Business Advisory Services

The NSW government provides targeted advisory services for Indigenous-owned businesses. The initiative aims to provide advisory services to at least 5% of Indigenous-owned small businesses annually.

Evaluation of Integration of Federal and State Programmes

The National Business Sector strategy provides direction on initiatives that can be designed and implemented to enhance the development and growth of Indigenous business-owned enterprises. However, individual states continue to develop and run their initiatives that focus on interventions in their states. Thus, whilst the objective of these initiatives might have a similar overarching objective, there is no deliberate integration of these interventions. For example, the initiatives by the various offices of small business commissioners across the states all have different approaches and targets for engaging Indigenous-owned businesses.

Representative Institutional Bodies and Programmes Review

Various critical representative institutional organisations are serving Indigenous-owned business enterprises. It was essential to review these bodies in conjunction with the policy and programme review because they are critical actors in the broad ecosystem of stakeholders supporting Indigenous enterprises. Summaries of these organisations are provided, followed by an assessment of their role in policy, financial inclusion and networking. The organisations covered have a national and state (NSW focus) profile and provide services to IBEs across Australia.

Indigenous Business Australia

Indigenous Business Australia (IBA) is a government organisation that provides workshops, advice, business support programmes and, in some cases, business finance to eligible Indigenous business owners. It is a statutory authority of the Australian government and is accountable to the Parliament and the Minister for Indigenous Affairs. IBA was created to assist and enhance the economic development opportunities of Aboriginal and Torres Strait Islander people across Australia. IBA serves, partners and invests with Aboriginal and Torres Strait Islander people who want to own their future (IBA, 2018).

Supply Nation

Supply Nation is a not-for-profit organisation funded by the Commonwealth Government. It aims to connect Indigenous suppliers (businesses) with government and private sector organisations to secure procurement opportunities through its comprehensive directory (Supply Nation, 2020). It is the only organisation that recognises two precise forms of ownership of Indigenous-owned enterprises, namely Registered Members made up of 50% or more Aboriginal or Torres Strait Islander ownership (caters for equal partnerships with non-Indigenous owners) and Certified Members made up of 51% or more Aboriginal and Torres Strait Islander owned, managed and controlled.

NSW Indigenous Chamber of Commerce

New South Wales Indigenous Chamber of Commerce (NSWICC) was the first Indigenous chamber of commerce in Australia, established in 2006 to support Aboriginal People to establish and operate their businesses and to provide a forum for business owners to come together to network, share and to learn from each other (NSWICC, 2019).

Discussion

  1. a.

    Policy and Programme Tracking—Opportunities for an Integrated One-Stop Technology Platform

The multiplicity and, in some cases, the overlap of policies and programmes at national, state and territory potentially creates a challenge for IBEs to effectively access these policies and programmes without an integrated and accessible resource. The multiplicity of initiatives can result in information overload for IBEs, which could be eliminated by establishing a one-stop portal that harnesses these individual initiatives into a consolidated portal that IBEs can easily access. The NBS highlights the importance of harnessing the power of knowledge through better sharing of information about commercial opportunities and better collection and sharing of data about Indigenous businesses. The various national, state and territory initiatives outlined in the review have different levels of utilisation of technology in the delivery of their programmes. A consolidated platform can enhance the involvement of the IBEs in the design/formulation of appropriate policies and programmes that speak to the Indigenist Voice of these enterprises. By integrating the Indigenist Voice in policy and programme design, prospects for better utilisation and engagement of policies and programmes will likely improve.

  1. b.

    Case for Facilitation of Financial Inclusion

The various policies and programmes in place through the government and other institutional players do not explicitly position their intervention as part of a broad agenda on financial inclusion. Although the IBA’s model does represent components of financial inclusion, there is a need to evaluate how this model interacts with the rest of the financial services ecosystem in developing a broad-based financial inclusion system. Both the Commonwealth government and state governments and territories have different programmes that focus on the provision of grants. This is aimed at addressing the traditional challenge Indigenous-owned businesses face in accessing finance due to several historical challenges. In regional and remote Australia, this is achieved through microfinance providers and the Indigenous Entrepreneurs Fund. However, the various initiatives in place do not explicitly position their intervention as part of a broad agenda on financial inclusion which also involves a structured involvement of the broad financial services ecosystem. There is a gap for a one-stop portal for tracking financial inclusion for IBEs which can be helpful in the design of grants and programmes that deal with the provision of finance for IBEs and in the design of policies used by financial service providers.

  1. c.

    Networking Prospects of the Portal

Findings from the review indicate that supporting institutions like IBA, Supply Nation and NSWIC play a pivotal role in facilitating networking among IBEs. However, there is an opportunity for harnessing these individual initiatives into a collective resource which can be accessed by the small enterprises whose voice and participation in these large-format organisations are often underrepresented. Thus, an expansion of this facilitation would be specific sector-focused networking facilitation via one-stop portal focusing on facilitating networking for IBES, which caters for the smaller enterprises that might be underrepresented in the more extensive scope of networking events and structures, such as the Business Hubs and Incubators provided by the IBA, Supply Nation or NSWICC. The idea is not to duplicate services but to ensure that the micro and small enterprises are catered for and, more importantly, are involved in designing this networking space.

Summary International Benchmarking

International benchmarking of policies, programmes and institutional support for Indigenous enterprises is a broad area of investigation beyond this paper’s scope. Hence, we provide a succinct summary of interventions in Canada and the USA to demonstrate how Australia's overarching focus aligns with international practice. Canada and the USA are two jurisdictions with dedicated policies and programmes targeting Indigenous business enterprises.

Canada

In Canada, there are currently more than 37,000 Aboriginal-owned businesses covering various economic sectors. The Procurement Strategy for Aboriginal Business is the overarching policy and programme that seeks to increase the number of Aboriginal firms participating in the federal procurement process. More than 100,000 contracts have been awarded to Aboriginal suppliers with a total value of $3.3 billion under the PASB policy, and lessons can be drawn from the minority procurement strategy.

USA

The Small Business Administration is the designated Federal government resource supporting all entrepreneurs, including minority-owned businesses. A minority-owned business is a business enterprise in which the minority business owner holds 51% or more of the company. Various programmes and agencies are in place to support Indigenous and minority enterprises. The main ones are the Minority Small Business and Capital Ownership Development Program, National Minority Supplier Development Council and Minority Business Development Agency.

Critical Insights from Canada and USA

The shared emerging insights from Canada and USA indicate the following:

  • Federal or central government commitment to creating an environment that supports Indigenous-owned businesses. Regular review of programmes.

  • Existence of multiple programmes with potential overlap and duplication of services.

  • A similar focus on Indigenous procurement policy drives the approach to engaging Indigenous-owned businesses.

  • Provision of various forms of financing support, forms of advisory and training programmes for Indigenous-owned businesses.

Conclusion and Future Direction

The second phase of this project involves engaging Indigenous small business enterprises to establish their evaluation of the support systems and relevance of the one-stop conceptual portal covering policy and programme, financial inclusion and networking tracking as outlined in the conceptual framework. In so doing, we are adopting an Indigenous approach which will draw an appropriate array of cultural knowledge, skills, abilities and insights from the enterprises, which should rightfully inform and shape any supporting framework that will be developed around the one-stop resource portal that has been developed from the review undertaken (Rigney, 1997). This is important in ‘incorporating recognition of First Nation peoples’ worldviews, knowledge and realities as distinctive and vital to the existence and survival of the First Nation communities’ when they operate business enterprises (Martin & Mirraboopa, 2003). This will ensure that the research and its outcomes are theoretically and conceptually grounded in the authority of the traditional owner/custodians as local knowledge holders in these enterprises.