Current state of play for Indigenous business

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Indigenous business application by location

This bar graph shows number of indigenous businesses (x axis) and total number of businesses for each state or territory (y axis). Queensland has 24 businesses, New South Wales 21, Northern Territory 12, Western Australia 9, South Australia 7, Victoria 5, Australian Capital Territory 1. The bars show Queensland businesses are approximately 40% in the metro area, 50% in regional areas, and 10% in remote areas. New South Wales approx. 60% metro, 40% regional. Northern Territory approx. 65% regional, 35% remote. Western Australia approx. 60% metro, 10 % regional, 30% remote. South Australia approx. 60 % metro, 30% regional, 10% remote. Victoria approx 85% metro, 15% regional. Australian Capital Territory in the metro area.,

Source: Department of Industry, Science, Energy and Resources (2020)

The number of Indigenous businesses has increased significantly. Between 2006 and 2016, the number of Indigenous businesses jumped by almost 72 per cent to 11 587.[1] Despite rapid growth, the rate of business ownership by Indigenous Australians is much lower than non-Indigenous Australians.[2] Indigenous businesses only represent between 0.6 and 0.8 per cent of the 2.1 million businesses nationwide,[3] whilst 3.3 per cent of the Australian population were Indigenous at June 2016.[4]

While the department has not historically collected Indigenous business data for all of our program applicants, it is estimated based on partial data, that Indigenous businesses represented around 0.2 per cent of all applications to the department’s programs over a period of five years.[5]

Of the estimated 0.2 per cent of Indigenous business, most applications were received from the Construction sector (25 per cent), Professional, Scientific and Technical Services (15 per cent) and the Manufacturing sector (13 per cent).

In terms of size, most Indigenous business applicants were small businesses (67 per cent), followed by medium businesses (32 per cent).

The department is building its capability to support Indigenous businesses through improving data collection practices. In 2019, we embedded an Indigenous identifier question on applications to most of the department’s programs, with implementation on remaining programs underway. This will help us to collect robust data, identifying areas to improve our engagement with Indigenous businesses and analyse the effectiveness of our programs and policies in reaching and supporting Indigenous businesses.

We are also improving business outcomes through procurement. In the 2018–19 financial year, 11.56 per cent (1.15 per cent when excluding a major contract) of the department’s new procurements, by value, were awarded to Indigenous businesses. The Commonwealth value-based target is 1 per cent for 2019-20.

Initiatives are underway to improve the Indigenous engagement ecosystem. While we do not have a complete picture of our interaction with Indigenous businesses yet, we have identified the following improvements to increase Indigenous business uptake of new and existing programs.

Footnotes

  1. ABS (2016) Census of Population and Housing, ABS Cat.No. 2071.0
  2. Hunter B (2014) Reflecting on the Growth of Indigenous Self-employment Agenda: A Journal of Policy Analysis and Reform21(1): 45–67 Available at: https://press-files.anu.edu.au/downloads/press/p302941/html/hunter.xhtml?referer=&page=7#toc_marker-8 
  3. Department of Prime Minister and Cabinet (2018) Indigenous Business Sector Strategy. Available at: https://www.niaa.gov.au/resource-centre/indigenous-affairs/indigenous-business-sector-strategy
  4. ABS (2016) Census of Population and Housing, ABS Cat.No. 3238.0.55.001
  5. Data based on the then Department of Industry, Innovation and Science 2014–15 to 2018–19. Proxy data was used to gauge the level of Indigenous engagement with the department’s programs. The department has cross-matched data from Supply Nation, the Industry Capability Network, Australian Business Register and the Office of the Register of Indigenous Corporations.