Supply Nation, Australia’s leader in supplier diversity, and Dr Zannie Langford, Research Fellow at the Griffith Asia Institute, have joined forces to investigate Australia’s Indigenous businesses sector following the pandemic.
In a new research report titled ‘The Geographies of Indigenous Business in Australia: An Analysis of Scale, Industry and Remoteness’, researchers highlight the diversity of Indigenous business in Australia and emphasise the need for Indigenous business support policy to understand the relevance of size, industry and remoteness on Indigenous business strategies and outcomes.
Using a combination of data from Supply Nation, the Office of the Registrar for Indigenous Corporations and the Australian Bureau of Statistics, researchers discovered that smaller Indigenous businesses employ Indigenous workers at twice the rate of larger businesses, while businesses based in regional and remote areas employ Indigenous workers at twice the rate of those in major cities.
Dr Langford highlighted the growth in the Indigenous business sector, which she says has “doubled in size in just five years”, stating it’s now worth an estimated $10 billion in annual revenue.
She added “Much of its growth has been driven by the Indigenous procurement policies of government and private companies, which have provided opportunities for Indigenous entrepreneurs across Australia to build businesses which provide employment opportunities and services in some of Australia’s most remote areas.”
The report states that the Indigenous Procurement Policy has generated $6.9 billion in government spend, with more than 47,500 contracts being awarded to over 3,000 Indigenous businesses.
Additionally, Supply Nation has recorded $7.5 billion in spend from their corporate members since their founding in 2009.
It also reveals a total spend of $3.8 billion in the 2021-2022 financial year, 45% of which was by government members and 55% by corporate members.
The report suggests that IPP driven growth in government procurement, alongside growing spend by Supply Nation corporate members, has been highly influential in spurring the growth of the Indigenous business sector.
According to the analysis, the proportion of employees who identify as Aboriginal or Torres Strait Islander also varies considerably by industry.
Sector-average Indigenous employment rates reveal that only 16% of employees within administrative services identify as Indigenous, compared to 81% for arts and entertainment.
It also states that Indigenous businesses have advantages in the delivery of goods and services in certain industries, such as capturing the market for the supply of Indigenous art, heritage services and welcome to countries.
However, there are also a range of industries where there is no visible business advantage beyond access to corporate and government Indigenous procurement policies. In fact, 75% of services offered by Supply Nation businesses were in industries in which a clear Indigenous competitive advantage could not be readily identified.
Dr Langford concluded “In 2022, just three organisations (The Commonwealth Department of Defence, Fortescue Metal Group and Rio Tinto) were responsible for more than half of the total spend with Supply Nation registered businesses. These organisations require services in specific industries, but do not support the growth of Indigenous businesses in others.
“Similarly, a previous Supply Nation report found that female-owned businesses attracted only 14% of the total contract revenue of Supply Nation businesses.
“A strong understanding of the sectors, regions and entrepreneurs benefiting most from procurement policies is necessary to support Indigenous businesses in a wide range of contexts.
“These findings can inform more targeted policy to support the Indigenous business sector to grow and more effectively provide benefits to all Indigenous Australians.”
