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Abstract

In 2014, Boyd Hunter attempted to provide a consistent estimate of the growth in Indigenous self-employment between 1991 and 2011. Changes in the census questionnaire structure and sequencing means that projecting the growth trends back to 1991 is now problematic. This paper provides a more refined, consistent and transparent method for calculating the number of Indigenous owner–managers, including accounting for the growing prevalence of Indigenous owner–managers who are increasingly identifying themselves as Indigenous in the census, unlike in previous censuses where many did not identify. Using census data and estimated residential population statistics, we conservatively estimate that around 17 900 Indigenous business owner–managers operated in Australia in 2016. We estimate that the number of Indigenous business owner–managers grew by 30% between 2011 and 2016. The rate of Indigenous business ownership has grown marginally as a share of the Indigenous working-age population at a time when the non-Indigenous rate of business ownership has fallen. Yet the rate of Indigenous business ownership remains relatively low compared with the rate of business ownership among non-Indigenous Australians. The paper also provides insights about the characteristics of Indigenous owner–managers, including their number, geographic distribution, gender composition, industrial sectors, and whether they are running incorporated or unincorporated enterprises. The recent growth in Indigenous owner–managers is almost entirely in urban areas and cities where well-developed and diverse labour and product markets operate. The paper explores some of the key factors that are impacting on Indigenous business development, including issues about the economics of discrimination and remoteness. The paper also outlines policy implications that arise from the analysis. We reflect on further refinements of the Indigenous Procurement Policy, the recently announced Indigenous Business Sector Strategy and other policy options.
Centre for
Aboriginal Economic
Policy Research
ANU College of
Arts & Social
Sciences CAEPR WORKING PAPER 125/2018
ONGOING GROWTH IN THE NUMBER
OF INDIGENOUS AUSTRALIANS IN
BUSINESS
S SHIRODKAR, B HUNTER AND D FOLEY
Series note
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Dr Janet Hunt
Interim Director, CAEPR
Research School of Social Sciences
College of Arts & Social Sciences
The Australian National University
Oc tober 2018
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Ongoing growth in the
number of Indigenous
Australians in business
S Shirodkar, B Hunter and D Foley
Siddharth Shirodkar is a Sir Roland Wilson Scholarship holder at the
Centre for Aboriginal Economic Policy Research (CAEPR), Research School
of Social Sciences, College of Arts & Social Sciences, Australian National
University. Boyd Hunter is a Senior Fellow at CAEPR. Dennis Foley is a
Professor of Entrepreneurship at the University of Canberra.
Working Paper No. 125/2018 iii
Abstract
In 2014, Boyd Hunter attempted to provide a consistent estimate
of the growth in Indigenous self-employment between 1991
and 2011. Changes in the census questionnaire structure and
sequencing means that projecting the growth trends back to
1991 is now problematic. This paper provides a more rened,
consistent and transparent method for calculating the number
of Indigenous owner–managers, including accounting for the
growing prevalence of Indigenous owner–managers who are
increasingly identifying themselves as Indigenous in the census,
unlike in previous censuses where many did not identify. Using
census data and estimated residential population statistics, we
conservatively estimate that around 17 900 Indigenous business
owner–managers operated in Australia in 2016. We estimate that
the number of Indigenous business owner–managers grew by
30% between 2011 and 2016. The rate of Indigenous business
ownership has grown marginally as a share of the Indigenous
working-age population at a time when the non-Indigenous rate
of business ownership has fallen. Yet the rate of Indigenous
business ownership remains relatively low compared with the rate
of business ownership among non-Indigenous Australians. The
paper also provides insights about the characteristics of Indigenous
owner–managers, including their number, geographic distribution,
gender composition, industrial sectors, and whether they are
running incorporated or unincorporated enterprises. The recent
growth in Indigenous owner–managers is almost entirely in urban
areas and cities where well-developed and diverse labour and
Working Paper No.125/2018
ISSN 1442-3871
ISBN 978-1-925286-32-8
An electronic publication downloaded
from <caepr.cass.anu.edu.au>.
For a complete list of CAEPR
Working Papers, see
<caepr.cass.anu.edu.au/research/
publications/working-papers>.
Centre for Aboriginal Economic
Policy Research
Research School of Social Sciences
College of Arts & Social Sciences
The Australian National University
Front cover image:
TerryNgamandarraWilson, Gulach
(detail), painting on bark, private
collection © Terry Ngamandarra,
licensed by Viscopy, 2016
iv Shirodkar, Hunter and Foley
Centre for Aboriginal Economic Policy Research
Acronyms
ABS Australian Bureau of Statistics
ACLD Australian Census Longitudinal Dataset
ANU Australian National University
CAEPR Centre for Aboriginal Economic Policy Research
CEO chief executive ofcer
ERP estimated residential population
IPP Indigenous Procurement Policy
Acknowledgments
The authors thank two anonymous referees for comments received
on an earlier draft of this paper, as well as participants at a seminar
presentation to the Department of the Prime Minister and Cabinet
(PM&C) held in Canberra in September 2017. The ndings and views
reported in this paper, however, are those of the authors and should not
be attributed to PM&C.
product markets operate. The paper explores some of the key factors
that are impacting on Indigenous business development, including
issues about the economics of discrimination and remoteness. The
paper also outlines policy implications that arise from the analysis. We
reect on further renements of the Indigenous Procurement Policy, the
recently announced Indigenous Business Sector Strategy and other
policy options.
Keywords: Indigenous businesses, Indigenous owner–managers,
Indigenous entrepreneurship, economics of discrimination, remote
Indigenous business
caepr.cass.anu.edu.au
Contents
Series note ii
Abstract iii
Acknowledgments iv
Acronyms iv
1 Introduction 1
2 The growing prevalence of Indigenous Australians in business 2
3 Identifying recent trends in Indigenous business owner–managers 4
4 Distribution of Indigenous owner–managers in the census 7
5 Explaining the low rates of Indigenous business ownership in Australia 13
6 Discussion and policy implications 16
Appendix A Calculating the number of Indigenous business owner–managers 18
Appendix B Census household form questions 21
Notes 24
References 24
Working Paper No. 125/2018 v
vi Shirodkar, Hunter and Foley
Centre for Aboriginal Economic Policy Research
Tables and figures
Figure 1 Growth in the number of Indigenous owner–managers in Australia, 2006–16 4
Figure 2 Rates of Indigenous and non-Indigenous business ownership, 2006–16 5
Table 1 Location of Indigenous owner–managers by Greater Capital City Statistical Area 7
Figure 3 Owner–managers as a percentage of the Indigenous working-age population
(15–64years), 2016 8
Figure 4 Percentage changes in the numbers of Indigenous owner–managers, 2011–16 9
Figure 5 Indigenous owner–managers, by gender, 2016 10
Figure 6 Non-Indigenous owner–managers, by gender, 2016 10
Figure 7 Indigenous and non-Indigenous business owner age proles, 2016 11
Figure 8 Industry composition of Indigenous and non-Indigenous owner–managers, 2016 12
Table 2 Characteristics of enterprises by Indigenous status, 2016 13
Table A.1 Changes to identication of Indigenous status across the ACLD 19
Figure B.1 2001 Census household form question 33 22
Figure B.2 2006 Census household form questions 35–37 22
Figure B.3 2011 Census household form questions 35–37 23
Figure B.4 2016 Census household form questions 35–37 23
1 Introduction
Indigenous businesses are crucial for the economic
self-determination of First Nations communities. As part
of the process, it is important to improve Australia’s
broader understanding of the sector and chart its
growth. The recent growth in awareness of Indigenous
business has created signicant interest in good
estimates for the size of the sector. Understanding
the basic characteristics of such businesses and the
composition of the sector offers important information
for policy makers. This paper provides reliable estimates
of the sector, based on detailed analysis of recent
census data as well as compositional facts.
Historically, inadequate data and relatively small
numbers captured in previous censuses has limited
the analysis of Indigenous businesses (Hunter 1999).
The information has improved with the collection of
consistent data in recent censuses, albeit indirect
information based on individuals who own or manage
an enterprise. Of course, not all businesses have a
single owner who also happens to be manager. Many
businesses are complex legal and tax entities that are
difcult to identify and even more difcult to analyse.
And a number of entrepreneurs own multiple businesses
at the same time, or have owned multiple businesses
over their lifetime.
Unsurprisingly, denitional differences arise. Foley
(2013) argues that the overall number of Aboriginal
and Torres Strait Islander businesses is unnecessarily
restricted by ofcial statistics that focus on majority
Indigenous ownership (i.e.more than 50% of the equity
in the business is controlled by Indigenous people).
His research documents how large numbers of First
Australians are in partnership with non-Indigenous
people, with a substantial number of these business
partnerships involving a married couple. We have
no evidence to suggest that such businesses are
Indigenous in name only. Many such businesses clearly
involve substantial Indigenous control (also see Foley
& Hunter 2013). The above illustrates the complexity of
trying to untangle these economic entities. Therefore,
rather than focusing on the business entity, the
thought-provoking and arguably more practical area of
enquiry is in understanding the Indigenous business
owners themselves.
Hunter (2014) attempted to provide a broadbrush
estimate of the growth in Indigenous self-employment,
which he claims has been growing steadily since the
1991 Census, albeit from a low base. The major issue in
previous estimates of the Indigenous business sector is
an element of confusion as to what constitutes self-
employment, how it relates to businesses and how to
measure it in the data. The 1991 Census asked whether
respondents were self-employed rather than working in
business per se. Recent censuses have asked whether
an individual is the owner–manager of an enterprise
(including incorporated or unincorporated enterprises).
Using the census denition given by the Australian
Bureau of Statistics (ABS), this paper provides a
more rened, consistent and transparent method for
attempting to estimate the real number of Indigenous
business owner–managers in Australia.
Section2 documents the policy context for the
Indigenous business sector. We then discuss important
differences between Indigenous businesses, Indigenous
entrepreneurs and Indigenous owner–managers. Some
denitional compromises are required to measure
practically the growing prevalence of Indigenous
business owners.
One of the major contributions of this paper is providing
a method to estimate a realistic approximation of the
number of Indigenous business owner–managers in
Australia over the decade to 2016 (Section3). Crucially,
the method attempts to account for a phenomenon
observed in the data in which a substantial and growing
share of the Indigenous business population has not
identied their Indigenous status in earlier censuses but
has done so in subsequent censuses. The calculation
also adjusts for the Indigenous population undercount
in the census – that is, the roughly 20% of Indigenous
Australians who were not captured in the census (see
Box1 and AppendixA for details on the methodology).
In Section4, the paper describes salient characteristics
of Indigenous owner–managers, including where they
are located, which regions have experienced the highest
rates of growth, and the distribution of owner–managers
by industry, gender, demography and types of business.
Section5 explores the contributing factors that impact
negatively on Indigenous business development,
including unpacking the literature about the economics
of discrimination and examining the increased
challenges for remote-based Indigenous businesses.
The nal section (Section6) reects on the policy
implications of the ndings.
caepr.cass.anu.edu.au
Working Paper No. 125/2018 1
2 The growing prevalence of
Indigenous Australians in
business
The historical exclusion of Indigenous Australians from
mainstream economic life has led to low accumulation
of wealth across many Indigenous communities. Only
a relative few gained formal business experience
before the last decade. The result is that the vast bulk
of entrepreneurially inclined Indigenous Australians
likely lack the key preconditions to start a business
and prosper in our capitalist economy. Despite the
challenging environment, the number of Indigenous
Australians in business (or self-employment) has grown
substantially in recent decades (Hunter 2014). Recent
efforts to highlight the successes of Indigenous-owned
businesses have raised the national prole of the rapidly
growing sector.
The sector’s recent growth (or, at the very least,
growth in the mainstream awareness of the sector)
is, in part, attributable to initiatives such as the
Indigenous Procurement Policy (IPP), which established
department-level targets for Australian Government
procurement in 2015. Under the IPP, the dollar value
of successful tenders for Australian Government
contracts by Indigenous business owners grew from an
estimated $6million in 2012–13 to more than $1billion
in the policy’s rst two and a half years (July 2015 to
December 2017). Currently, more than 1000Indigenous
businesses are contracting with the Australian
Government as a result of the IPP.
The Australian Government also recently announced the
Indigenous Business Sector Strategy, which includes
measures that provide greater business support,
improved access to nance, stronger connections to
business networks and better sharing of information
about commercial opportunities.
Further, in 2017, the Department of the Prime Minister
and Cabinet published the rst Indigenous business
fact sheet, which compiled information on the size,
composition and broad geographic locations of
Indigenous businesses. The fact sheet provides
access to aggregate and average data on Indigenous
rm performance. The revenues of Indigenous rms
registered with the Supply Nation database reached
$1.15billion in 2014–15, with an average annual revenue of
$1.65million per rm. And the revenue of rms registered
with Supply Nation that had been operating from 2009–10
to 2013–14 grew at an annual average rate of 12.5%.
Using the large number of in-depth interviews he has
conducted, Foley (2013) pointed to a multiplier effect
that Indigenous businesses have on the creation of
jobs for First Australians. Hunter (2015) demonstrates
the statistical signicance of Foley’s multiplier with his
analysis of a sample of more than 17700 Australian
businesses. He found that, in his sample, Indigenous
businesses were 100times more likely than non-
Indigenous businesses to employ Indigenous workers.
And they also employed large proportions of non-
Indigenous workers. Foley’s research was further
validated by the fact that Indigenous businesses were
many more times as likely to hire Indigenous employees
irrespective of whether there was majority Indigenous
equity, or the business was an equal partnership
between Indigenous and non-Indigenous people.1 More
recently, Australian Government analysis of Supply
Nation’s register of Indigenous businesses suggests
that Indigenous-owned rms are between 40 and
50times more likely to hire Indigenous employees than
non-Indigenous rms. Regardless of the estimates,
clearly, Indigenous businesses offer a mechanism to
deliver economic development and increase Indigenous
workforce participation.
The Australian Government notes in the 2018 Closing
the gap report that Indigenous business success
is shifting the national Indigenous narrative from
welfare and dependence to aspiration, empowerment,
independence and the achievement of excellence.
The attainment of business, nancial and economic
independence helps to counter the inherent racism
of low expectations and is beginning to reverse
the challenges that arose from marginalisation and
low historic access to economic opportunities that
previously dened the Indigenous status quo. But to
interpret the sector’s potential, policy makers require a
lexicon that offers denitional clarity and consistency.
Definitions: Indigenous businesses,
Indigenous entrepreneurs and owner–
managers of businesses who are
Indigenous Australians
Indigenous entrepreneurship is an emerging eld of
international scholarship. Much of the research focuses
on management issues and on the Indigenous-specic
aspects of entrepreneurship (Hindle & Moroz 2010,
Henare etal. 2014, Dana 2015). Previous Australian
studies have also focused on the concept of an
Indigenous business (Foley 2013), or an Indigenous
Australian entrepreneur (Foley 2000). This paper focuses
2 Shirodkar, Hunter and Foley
Centre for Aboriginal Economic Policy Research
on Indigenous Australians who are owner–managers
of businesses. The concepts are largely similar, but a
handful of differences exist.
Foley (2013) argues that the denition of an Indigenous
business should be directly analogous to the legal
and governmental denitions of whether a person is
accepted as Indigenous. Accordingly, he argues that to
accept a business as Indigenous, they should meet at
least three conditions:
1. At least one person holding equity in the business
should identify as being Aboriginal or Torres Strait
Islander.
2. The business should identify itself as an Indigenous-
owned business.
3. The Indigenous business community should accept
this business as being Indigenous.
Foley widens the denition to include businesses
that may only have one Indigenous person holding
potentially a minority equity stake, rather than insisting
on majority Indigenous ownership (or even 50% equity).
Foley acknowledges that the denition may cause
concerns, especially for policy makers who may want
to target programs and direct taxpayers’ funds to those
individuals or entities who are most in need. However,
the denition is also potentially more restrictive because
of the need for acceptance by the rest of Indigenous
business fraternity, for which arguably each member
also faces the same denitional issue.
The difculty in using the above denition for the
analysis in this paper arises with measurement. Not only
is it difcult to capture the detailed cultural and social
context in statistical collections, but comparisons with
non-Indigenous businesses are not straightforward and
attempting to distinguish the two can become perilous.
Hence, instead of looking at businesses directly, we
nd value in understanding the individual entrepreneurs
themselves.
Foley denes an Indigenous Australian entrepreneur in
the following way:
The Indigenous Australian entrepreneur alters
traditional patterns of behaviour, by utilising their
resources in the pursuit of self-determination and
economic sustainability via their entry into self-
employment, forcing social change in the pursuit
of opportunity beyond the cultural norms of their
initial economic resources. (2000:11)
The denition applies a range of social criteria that
represent the empowering effect of entrepreneurship,
not least of which was breaking the shackles of the
historic oppressive ‘Indigenous Australian economic
status quo’ (Foley 2000:11), which still denes the
experience of many First Australians today. Crucially,
Indigenous entrepreneurs offer their community an
avenue for greater and long-overdue economic self-
determination, create positive role models within families
and communities, and can serve as mentors to young,
entrepreneurial Indigenous Australians. But the difculty
in using the denition is the impracticality of asserting
the social goals of individuals or rms from data sources
such as the census.
Measuring the number of business owner–managers
is a much simpler task. The ABS Census of Population
and Housing offers the most comprehensive means of
capturing Indigenous owner–managers across Australia.
It is based on the ABS census classication of owner–
managers, with various characteristics, including rm
classications of incorporated or unincorporated. While
the number of owner–managers provides an indirect
measure of Indigenous businesses, the measure offers
the most robust source of information on the sector’s
growth. Accordingly, the census denition and the
associated census counts form the starting point for
this paper’s estimate of the total number of Indigenous
owner–managers. The denitions below are found in the
Census dictionar y:
Owner–managers of unincorporated enterprises:
An owner–manager of an unincorporated
enterprise is a person who operates his/her
own unincorporated economic enterprise,
that is, a business entity in which the owner
and the business are legally inseparable, so
that the owner is liable for any business debts
that are incurred. It includes those engaged
independently in a profession or trade.
An owner–manager of an incorporated
enterprise: is a person who works in his/her own
incorporated enterprises, that is, a business
entity which is registered as a separate legal
entity to its members or owners (also known as a
limited liability company).
caepr.cass.anu.edu.au
Working Paper No. 125/2018 3
3 Identifying recent trends
in Indigenous business
owner–managers
This paper estimates that the Indigenous business
community continued to grow strongly in the 10years
to 2016, reaching 17900 owner–managers in 2016
(Figure1). The estimate adjusts for the undercount of
Indigenous Australians (using the estimated residential
population statistics [ERP]) in the census and the
propensity for some owner–managers to identify as
Indigenous in future censuses – that is, accounting
for the rate of Indigenous owner–managers who are
newly identied as Indigenous. Biddle and Markham
(2018) use the ABS’s Australian Census Longitudinal
Dataset (ACLD) to show that the net increase in the total
Indigenous population from identication change was
around 84600 between 2011 and 2016. Details of our
methodology for estimating the number of Indigenous
owner–managers are provided in Box1 and AppendixA.
Applying this method to 2011 data, we estimate that
approximately 13700 Indigenous owner–managers were
operating in 2011. Therefore, the number of Indigenous
owner–managers grew by around 30% between 2011
and 2016. The estimate is 1200 more owner–managers
than previously estimated by Hunter (2014) for 2011.
And we estimate that there were around 10400
Indigenous owner–managers in 2006, which is around
1500 more than Hunter’s (2014) estimate for 2006 (note
that AppendixA covers some methodological issues
that might result in a higher estimate of Indigenous
owner–managers in 2006 than would otherwise be the
case). Figure1 displays the relative contributions of
each component of the calculation to the aggregates
for the last three censuses. The growth in the number of
Indigenous business owner–managers in the 10years
between 2006 and 2016 is in line with the growth in the
census headcount of Indigenous owner–managers.
The release of the 2006–16 ACLD will provide an even
more accurate estimate of the number of Indigenous
owner–managers over the last three periods.
Despite the strong growth in the number of Indigenous
Australians choosing a life in business, the rate of
Indigenous business ownership as a share of the 15+
population is still signicantly lower than the non-
Indigenous rate (Figure2). But some positive signs
have emerged. The proportion of Indigenous owner–
managers is increasing as a share of the 15+ population,
from 3.2% in 2006 to 3.4% in 2016. And the increase in
the rate of Indigenous business ownership is occurring
Figure1 Growth in the number of Indigenous owner–managers in Australia, 2006–16
0
4 000
8 000
12 000
16 000
20 000
2006 2011 2016
Number of Indigenous business owner–managers
Census count Changed Indigenous status Estimated residential population adjustment
10 400
13 700
17 900
Note: Calculations are derived using the methodology developed in this paper, as outlined in Box1 and AppendixA.
4 Shirodkar, Hunter and Foley
Centre for Aboriginal Economic Policy Research
at a time when the proportion of non-Indigenous owner–
managers is actually decreasing – from 10.0% in 2006,
to 9.2% in 2011 and 8.6% in 2016. The general decline
in the non-Indigenous rate of business ownership
could reect the difculties that have affected the
Australian economy since the global nancial crisis in
2008. Against that backdrop, the growth in the share of
Indigenous owner–managers is noteworthy and implies
that Indigenous owner–managers are making headway
in the economy despite the relatively low-growth
environment over the last decade.
The calculations above represent a conservative
estimate of the number of Indigenous businesspeople,
based on information from the census and the
ACLD. It offers a proxy for the number of Indigenous
businesses. We note unpublished estimates from
Foley, who estimated that there were at least 25000
Indigenous businesses between 2010 and 2012. The
research was based on consultation with leading
Indigenous thinkers in the eld, including MsEsme
Monaghan (former CEO of the Koori Business
Network), Neil Willmett (former CEO of the Indigenous
Business Network), and researchers at the Australian
Taxation Ofce and the New South Wales Indigenous
Chamber of Commerce. The research uses various
databases to count the number of registered Indigenous
businesses. Any estimates that use multiple sources
for their data must ensure that the databases do not
overlap (to minimise the likelihood of double counting
enterprises), and that they contain data for the same
period of time.
In addition, PwC Indigenous Consulting and
PricewaterhouseCoopers (2018) – referred to as PwC
– present estimates of between 8600 and 11900
Indigenous businesses (including self-employed
individuals, enterprises and trusts) as of 2016. The
higher estimate is based on 2016 Census counts of
the number of self-employed and owner–managers
of enterprises identied in the census, and on 400
Indigenous trusts identied in the Ofce of the Registrar
of Indigenous Corporations reports. The lower bound
of PwC estimates uses Supply Nation’s Indigenous
Business Direct directory to calculate the number of
Indigenous enterprises with employees (i.e.not the self-
employed). Note that Supply Nation does not yet have
a comprehensive register of Indigenous businesses,
having only 1573 veried Indigenous businesses on their
register (and only around 1000 businesses at the time
PwC Indigenous Consulting developed its estimate).
Based on PwC’s methodology, their estimated range
could involve a degree of double counting that is
difcult to overcome. Finally, the PwC estimate does
not account for the growing propensity to switch to
‘Indigenous’ on the census. As such, the methodology
adopted in our paper provides a more complete means
to measure the Indigenous business sector’s footprint
than the very conservative estimates provided by PwC.
Figure 2 Rates of Indigenous and non-Indigenous business ownership, 2006–16
0
2
4
6
8
10
12
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Business ownership rate
(percentage of 15+ population)
Indigenous owner–managers Non-Indigenous owner–managers
Note: Calculations are derived using the methodology developed in this paper, as outlined in Box 1 and Appendix A.
caepr.cass.anu.edu.au
Working Paper No. 125/2018 5
Box 1 Estimating the number of Indigenous owner–managers
Two statistics are required to accurately calculate the number of Indigenous Australians in business
(AppendixA provides further details of these calculations and their construction):
, the Indigenous estimated residential population (ERP) aged 15+ in 2016
, the rate of Indigenous business ownership as a share of the Indigenous 15+ population
in 2016, calculated from the census and the Australian Census Longitudinal Dataset (ACLD).
Multiplying the two components together gives the number of Indigenous business owner–managers.
The census provides the most comprehensive source of information on the number of identied
Indigenous Australians in business. But there are well-known limitations. For example, each census
undercounts the entire Australian population by around 5% because of a range of collection challenges.
For Indigenous Australians, the undercount as measured through the ERP is around 19%. That is,
around a fth of Indigenous Australians are not captured in the census. A more accurate estimate of the
number of Indigenous Australians in businesses is obtained by scaling using the ERP – that is,
.
The census also provides a basis for estimating the rate of Indigenous business ownership,
.
But a complication arises because of the signicant numbers of Indigenous owner–managers who
do not initially identify as Indigenous, but do in future censuses. Evidence from Foley (2000) suggests
that many Indigenous owner–managers may not openly identify as Indigenous because of the fear
of racial discrimination from customers, suppliers, lenders, and perhaps even the public service and
society more broadly. Foley documents a number of instances of difculties that have arisen when it is
revealed to the non-Indigenous business community that a business person is Indigenous. As a result,
Indigenous businesspeople may display a greater level of caution in revealing their Indigenous identity
to others than the rest of the Indigenous population. Any calculation of the number of Indigenous
owner–managers needs to make an appropriate adjustment for the underreporting of responses to the
Indigenous status question. Data from the ACLD maps changes between censuses for a 5% sample
of Australians between 2011 and 2016. The ACLD supports the above position by showing that an
additional 41.7% of Indigenous owner–managers in 2016 did not initially identify as Indigenous in 2011.
In comparison, only an additional 12.5% of the Indigenous 15+ population in 2016 did not identify in
2011.
Putting these ndings into the equations (see AppendixA for full details), we estimate that the rate of
Indigenous business ownership – that is,
– grew from 3.2% in 2006 to 3.4% in 2016.
When we multiply the Indigenous ERP for 15+ (523835) by the estimated rate of Indigenous business
ownership (3.4%) – that is,
– we nd that there were around 17900 Indigenous owner–
managers in 2016.
6 Shirodkar, Hunter and Foley
Centre for Aboriginal Economic Policy Research
4 Distribution of Indigenous
owner–managers in the
census
The following descriptive analysis examines the
distribution of Indigenous owner–managers, as found
in the census, by geography, gender, age, industry
and other components. The analysis does not attempt
to estimate the compositional breakdowns based on
our calculation of 17900 owner–managers, since the
method is less accurate for small subsets of Indigenous
owner–managers.
Where are Indigenous owner–managers
located?
Table1 presents raw census counts of the numbers
of Indigenous owner–managers in each jurisdictions’
Greater Capital City Statistical Area (GCCSA) and in
the rest of the state or territory. The vast majority of
Indigenous owner–managers are located on the east
coast of Australia, in particular in greater Sydney and
the rest of New South Wales. Large numbers also live
in Brisbane, the rest of Queensland and in Melbourne.
The growth of Indigenous owner–managers in capital
cities over the last decade has been signicant and has
occurred at double-digit rates except in Darwin, where
the number of Indigenous businesses fell between 2011
and 2016.
The experiences of regionally based Indigenous owner–
managers are more mixed. In regional areas of New
South Wales, Queensland and Victoria, the number of
Indigenous owner–managers increased at double-digit
rates between 2006 and 2011, and between 2011 and
2016. In fact, the number of Indigenous Australians in
business in regional New South Wales doubled over the
decade (from 1317 in 2006 to 2719 in 2016). In regional
South Australia, Western Australia and Tasmania, the
Table 1 Location of Indigenous owner–managers by Greater Capital City Statistical Area
GCCSA 2006 2 011 2016
20 0 6 –11
change (%)
2011–16 change
(%)
Sydney 978 1275 183 0 30 44
Rest of NSW 1317 1856 2719 41 46
Melbourne 405 547 823 35 50
Rest of Vic 287 357 469 24 31
Brisbane 643 819 112 2 27 37
Rest of Qld 1228 1568 2035 28 30
Greater Adelaide 167 247 309 48 25
Rest of SA 122 164 171 34 4
Greater Perth 343 428 535 25 25
Rest of WA 315 397 400 26 1
Greater Hobarta173 194 228 12 18
Rest of Tasb320 408 421 28 3
Greater Darwina110 168 167 53 −1
Rest of NTb188 306 172 63 −44
ACT 109 14 6 165 34 13
GCCSA = Greater Capital City Statistical Area
a 2006 gures derived from Statistical Divisions of Hobart and Darwin.
b 2006 gures derived as differences between GCCSA for Tasmania and the Northern Territory and the Statistical Divisions of Hobart
and Darwin
Note: The GCCSA results are provided in the census. The aggregation of these gures does not equal this paper’s estimated Indigenous
business population for Australia.
caepr.cass.anu.edu.au
Working Paper No. 125/2018 7
number of Indigenous owner–managers grew at double-
digit rates between 2006 and 2011, but remained at
between 2011 and 2016. And while the number in
regional Northern Territory grew by 63% between 2006
and 2011, it fell by 44% in the following veyears.
The lack of recent growth in Indigenous owner–
managers in Western Australia and South Australia,
and the signicant recent declines in the Northern
Territory, could partially reect the reduction in business
opportunities following the end of the mining boom.
Queensland-based Indigenous owner–managers,
however, did not experience similar declines in their
numbers, implying greater diversity of business
activities across the state. Mining cannot fully explain
the signicant changes in the Northern Territory.
The ongoing effect of the Australian Government’s
Northern Territory Intervention may have also affected
the region’s economic prospects. The matter warrants
further investigation.
The ABS’s regional maps provide a more granular
picture of the location of Indigenous owner–managers,
presenting them as a share of the regional Indigenous
working-age population (15–64years).2 Figure3
shows that the highest proportions of Indigenous
owner–managers are concentrated in east coast urban
areas where the labour and product markets are most
developed, as well as in regional parts of the eastern
states of Queensland, New South Wales, Victoria and
Tasmania. Indigenous owner–managers are more
sparsely concentrated across the rest of the country
and make up the lowest shares of the Indigenous
population in large parts of remote Western Australia,
South Australia and the Northern Territory.
Figure3 Owner–managers as a percentage of the Indigenous working-age population
(15–64years), 2016
Most: 3.4 to 4.8%
More: 2.3 to 3.3%
Less: 1.1 to 2.2%
Least: 0.0 to 1.0%
8 Shirodkar, Hunter and Foley
Centre for Aboriginal Economic Policy Research
Figure4 provides details about the change in the
number of Indigenous owner–managers between 2011
and 2016 across regions. While growth in the number
of Indigenous owner–managers was relatively high in
metropolitan areas, growth was weaker in areas where
relatively few Indigenous owner–managers operated.
For example, the growth rate in Mallee was 78%.
Interestingly the second-highest growth of owner–
managers was in Newcastle, which now has more
Indigenous enterprises than metropolitan Melbourne.3
This is likely to be partly the result of Indigenous
grassroots organisations promoting Indigenous business
activity. Their training and support mechanisms included
the now-defunct Mandurah Hunter Valley Aboriginal
Chamber of Commerce, which later merged into the
NSW Indigenous Chamber of Commerce. The head
ofce is in the Hunter Valley region.
The largest declines in the number of owner–managers
were in remote regions, which also had relatively few
enterprises in 2011. The Northern Territory and very
remote parts of Western Australia and the Northern
Territory appear hardest hit. Overall, the change in the
number of Indigenous owner–managers reinforces
the story that remote areas, where almost 20% of the
Indigenous population live, are underdeveloped in terms
of access to markets. Clearly, the situation is becoming
more challenging.
The chapter on the economy in the second edition of
the Atlas of Indigenous Australia will provide additional
informative maps that describe the geographic
distribution of enterprises run by Indigenous owner–
managers (Hunter etal. forthcoming).
Figure4 Percentage changes in the numbers of Indigenous owner–managers, 2011–16
Greatest increase: 31.6 to 78.6%
Some increase:3.0 to 31.5%
Some decrease: –38.8 to 2.9%
Greatest decrease: –88.9 to –38.9%
Insufficient data
caepr.cass.anu.edu.au
Working Paper No. 125/2018 9
We do not attempt to adjust the owner–manager
geography statistics based on the methodology
outlined in this paper. But we note that Biddle and
Markham (2018) use the ACLD to show that the vast
majority of those who changed their Indigenous status
in the census lived in urban parts of Australia in 2011.
Using our methodology, this suggests an even more
pronounced increase in the number of owner–managers
living in urban areas than is suggested in Figures3
and 4.
Distribution of owner–managers by
gender
Men make up 67% of Indigenous owner–managers
and women 33% (Figure5). The Australian Government
has stated that an objective of the Indigenous
Business Sector Strategy is to increase the proportion
of Indigenous women that go into business. This
is a worthy goal, since the proportion of working-
age Indigenous women (and men) in business is still
relatively low. However, policy makers should note that
the gender balance among Indigenous owner–managers
is exactly the same as the gender balance among
non-Indigenous owner–managers (Figure6). As such,
the lower proportion of Indigenous women taking up
opportunities in business is likely to reect broader
societal factors that inhibit Australian women from
taking up a life in business.
Distribution of owner–managers by age
The census reveals that the population prole for
Indigenous owner–managers is younger than that
for non-Indigenous owner–managers (Figure7). The
median age range for Indigenous entrepreneurs is
40–44years, while the median range for non-Indigenous
entrepreneurs is 45–49years; 20–24-year-olds make
up roughly 5% of the Indigenous owner–managers,
but only2% of non-Indigenous owner–managers. The
25–29years category shows a similar 3percentage
point difference. Conversely, proportionately more non-
Indigenous Australians are in business at relatively older
ages, particularly from 55 onwards.
Figure 5 Indigenous owner–managers, by gender, 2016
33%
67%
0% 10% 20% 30% 40% 50% 60% 70% 80%
Males
Females
Source: 2016 Census of Population and Housing
Figure 6 Non-Indigenous owner–managers, by gender, 2016
33%
67%
0% 10% 20% 30% 40% 50% 60% 70% 80%
Males
Females
Source: 2016 Census of Population and Housing
10 Shirodkar, Hunter and Foley
Centre for Aboriginal Economic Policy Research
One could interpret the results in a number of ways.
It likely reects the fact that Indigenous Australians
have a much younger demographic prole than non-
Indigenous Australians. But it could also mean that
young Indigenous Australians are more open about
going into a life of business ownership than their non-
Indigenous peers – the average younger Indigenous
Australian is coming out with more primary, secondary
and tertiary education skills than previous generations,
better equipping them for the business environment.
Perhaps, given the greater barriers that our society has
placed before Indigenous people in the past compared
with today, fewer older Indigenous Australians had
opportunities to go into business, hence the slightly
skewed Indigenous business-age prole. Alternatively,
the stresses of business life, coupled with the difcult
and unfair prejudicial circumstances in Australian
society that have resulted in a lower average life
expectancy, could mean that, on average, Indigenous
owner–managers are passing away sooner. Preliminary
qualitative research (Foley 2017) and other interrelated
studies indicate that a combination of complex factors
impact on the Indigenous business person differently
from the non-Indigenous. Further research about
population distributions would assist in testing each of
the hypotheses outlined above.
Distribution of owner–managers by
industry
The industry representation of Indigenous owner–
managers in the Australian economy is similar in
composition to the industry representation of non-
Indigenous owner–managers (Figure8). For example, the
largest share of Indigenous owner–managers operates
in the ‘other services’ sector (34.8%),4 which is similar to
the share of non-Indigenous owner–managers (38.8%).
Of note is the high proportion of Indigenous business
operators in construction (27.5%) compared with 20.1%
of non-Indigenous businesses in construction. And,
despite the historic focus on the economic potential that
the art sector offers Indigenous people (Altman 2000),
it now only represents 3.8% of the Indigenous business
sector, similar in relative size to the non-Indigenous
arts sector (2.1%).5 However, that gure may not give
a true indication of actual enterprise levels because
the Indigenous arts industry often operates in the cash
economy, with few or no accurate records.
A segregation index for Indigenous and non-Indigenous
owner–managers measures the similarities between the
two groups. The estimation technique is the index of
dissimilarity (Duncan & Duncan 1955). The method uses
the sum of half the absolute differences between the
industry distributions of Indigenous and non-Indigenous
owner–managers. The dissimilarity index gure is
0.104, which shows that only 10.4% of Indigenous
owner–managers need to shift industries to have the
Figure7 Indigenous and non-Indigenous business owner age proles, 2016
0
5
10
15
15–19
20–24
25–29
30–34
35–39
40–44
45–49
50–54
55–59
60–64
65–69
70–74
75–79
80–84
85–89
90+
Percentage of owner–managers
Age group (years)
Non-Indigenous Indigenous
caepr.cass.anu.edu.au
Working Paper No. 125/2018 11
same industry prole as non-Indigenous Australians.
This result is primarily driven by the differences in the
construction sector, which alone accounts for around
one-third of the variation between the two groups.
Number of employees and incorporation
status
Information about Indigenous owner–managers, based
on the number of employees as dened in the census
and whether they are incorporated enterprises, is
provided in Table2.
Owner–manager of enterprises with no
employees
If an enterprise has no employees, then the owner–
manager is self-employed or a sole trader. Around
63% of Indigenous-owned enterprises and 58% of
non-Indigenous enterprises fall into this category.
Indigenous-owned enterprises with no employees are
more prevalent across southern and eastern Australia.
These ‘self-employed’ owner–managers are the
predominant form of Indigenous enterprise in Ceduna,
Kalgoorlie and northwestern New South Wales.
Owner–manager of smaller enterprises
The 2016 Census claries that a self-employed person/
sole trader who owns and manages their own business
cannot classify themselves as an employee. As that
clarication was not provided in the 2011 Census or
before, comparisons about changes between censuses
around the growth of the category may deceive.
Around 33% of Indigenous-owned enterprises and 38%
of non-Indigenous enterprises had 1–19employees in
2016. The higher rate for non-Indigenous enterprises
is not surprising and likely reects the fact that non-
Indigenous owner–managers have been established for
longer, and have therefore been able to achieve greater
economies of scale. Given the relatively recent and rapid
growth in the Indigenous business sector, Indigenous
owner–managers have had less time to establish and
grow, hence a smaller proportion have employees. Note,
within category estimates of the number of employees
would provide greater details of the macroeconomic
impacts of Indigenous ownership.
Owner–manager of larger enterprises
Larger enterprises (those with 20 or more employees)
are still relatively rare in both the Indigenous and non-
Indigenous populations. Among both owner–manager
cohorts, enterprises with 20 or more employees make
up only 4% of their respective populations. About half
of the areas around Australia have no large enterprises.
Such enterprises only comprise a substantial portion of
Indigenous owner–managers where there are relatively
few owner–managers in an area. For example, in Alice
Springs and Borroloola, more than 11% of Indigenous
owner–managers are in charge of larger (20+employee)
Figure8 Industry composition of Indigenous and non-Indigenous owner–managers, 2016
Agriculture
5.2%
Mining
0.8%
Manufacturing
3.7%
Utilities
0.5%
Construction
27.5%
Commerce
12.6%
Other services
34.8%
Government
1.4%
Education
3.5%
Health
6.0%
Arts
3.8%
Indigenous owner–managers
Government
0.7%
Agriculture
6.4%
Mining
0.4% Manufacturing
4.9%
Utilities
0.4%
Construction
20.1%
Commerce
14.7%
Other services
38.8%
Education
3.5%
Health
8.1%
Arts
2.1%
Non-Indigenous owner–managers
12 Shirodkar, Hunter and Foley
Centre for Aboriginal Economic Policy Research
enterprises. Really large enterprises are not explicitly
identied in the census but are an important source of
Indigenous employment. Most Indigenous enterprises
with more than 100employees are likely to have
headquarters in major cities (especially Sydney,
Melbourne and Brisbane) to optimise engagement with
the global economy.
Owner–manager of unincorporated enterprises
The proportion of Indigenous unincorporated
enterprises (63%) is the same as that of Indigenous
owner–managers with no employees. And the proportion
of non-Indigenous unincorporated enterprises (54%)
is similar to the rate of non-Indigenous owner
managers with no employees (58%). It implies that
the overlap between the cohorts is signicant, across
both Indigenous and non-Indigenous populations.
The proportion of enterprises that are unincorporated
is highest in southern Australia and some parts of
southeast Queensland. This is consistent with the notion
that unincorporated enterprises (those not incorporated
under the Corporations Act 2001) are more likely to be
sole traders.
Owner–manager of incorporated enterprises
Indigenous incorporated enterprises must incorporate
under the Corporations Act or the Corporations
(Aboriginal and Torres Strait Islander) Act 2006.
Table2 shows that 65% (100%−35%) of incorporated
enterprises (Indigenous and non-Indigenous) employ at
least one worker. That compares with unincorporated
enterprises, where only around 21% of Indigenous
enterprises and 23% of non-Indigenous enterprises
employ at least one worker. Indigenous incorporated
enterprises make up most of the sector in remote parts
of the country. The relatively common occurrence of
such enterprises in the remotest parts of the country
may reect the number of Indigenous community
organisations operating shops or other enterprises on
behalf of the local community. Note that the census
can only identify such enterprises if an Indigenous
person identies themselves as an owner and manager.
Many of these organisations may well actually fall
into the category of Indigenous enterprises that are
communally owned and may have a social dimension
to their activities (see AppendixB). To further pursue
analysis of such enterprises, readers are encouraged
to investigate data from the Ofce of the Registrar of
Indigenous Corporations.
5 Explaining the low rates
of Indigenous business
ownership in Australia
The economics of discrimination
The relatively low rates of Indigenous business
ownership suggest there are structural, social and
economic barriers, such as societal prejudice, that are
limiting the proportion of Indigenous Australians entering
into business. The 2016 Australian Reconciliation
Barometer survey found that 46% of Indigenous
Australians reported experiencing at least one form of
Table 2 Characteristics of enterprises by Indigenous status, 2016
Indigenous (%) Non-Indigenous (%)
Number of employees in enterprise
No employees 63 58
1–19 employees 33 38
20 or more employees 4 4
Incorporated and unincorporated enterprises
OMs incorporated 37 46
OMs unincorporated 63 54
OMs incorporated without employees 35 35
OMs unincorporated without employees 79 77
OM = owner–manager
Source: 2016 Census data derived from ABS TableBuilder
caepr.cass.anu.edu.au
Working Paper No. 125/2018 13
racial prejudice in the previous sixmonths compared
with 18% of non-Indigenous people. And the survey
suggests that Australia is becoming more hostile
to Indigenous Australians, with the proportion of
Indigenous people experiencing racism growing from
39% in 2014 to 46% in 2017.
At the turn of the 20th century, William Edward
Burghardt DuBois (1903) spoke of a race prejudice
that tainted the viewpoint of white Americans against
African Americans, from ‘doubt and distrust among the
best elements of whites to a frenzied hatred among
the worst…’ DuBois said that a bias exists among
the majority in the United States that makes them
unable to view African Americans without prejudice.
Without awareness of that prejudice, the bias can
become implicit, inherent and unacknowledged. It
seeps seamlessly into the everyday decision making of
economic actors. The biased views remain unchecked
within collective thought as if they presented genuine,
immutable and incontestable ‘facts’ about the
characteristics of an entire group.
The economic implications of such prejudicial
judgments on a whole group can become staggering.
Such judgments are almost always ignorant of reality.
The societal prejudice that is the cause of certain
people’s marginalisation sounds prophetic, but in truth
is deterministic. The effect is shockingly invariable
and universally applicable to the disenfranchised
and marginalised around the world. If such views
seep unchecked into modern life, it could explain the
limited social and economic progress that has plagued
marginalised communities globally, including Indigenous
communities and other minorities. It explains how
our society remains prejudicial towards Indigenous
Australians, resulting in many being barred from genuine
access to economic and social opportunities – which
directly affects their wellbeing.
Gary Becker (1957) was one of the rst modern
economists to develop a model that explores the
economic ramications of discrimination and bias. His
model was premised on the basis that whites in the
United States had a taste for discrimination, which he
suggests was the result of experiencing a disutility
from being near, working with or working for African
Americans. To represent this experience in the market,
Becker prices this component into white producers’,
workers’ and consumers’ production or utility functions
– showing that discriminators are willing to pay a
premium for exclusively associating with other whites.
Where discrimination exists, Becker predicts that, in
a perfectly competitive market, black businesses and
workers and white businesses and workers who do not
discriminate would gain substantial market advantages
and eventually push out those with a taste for
discrimination. Becker suggests that because of market
imperfections – which he does not explore in detail –
bigoted market participants remain and poor outcomes
continue for African Americans.
Becker found that discrimination explained much of
the signicant disparity between the socioeconomic
status of white and African American communities. He
even alluded to the more difcult situation of Native
Americans compared with African Americans. Charles
and Guryan (2008) support Becker’s claims by showing
empirically that African American wages are lower when
the prejudice of the ‘marginal’ white in a state is greater.
But while Becker’s approach tried to explain the effects
of racism, he did not adequately explain why racism
may exist, which Kenneth Arrow (1998) explores and for
which he provides an intriguing explanation.
Arrow argues that, contrary to the low entry-cost
principle underpinning well-functioning markets, the
nexus between one’s social life and their life as a market
participant may, in fact, reinforce and reward racially
exclusive networks. He suggests that maintaining
racially exclusive networks helps create social capital
among the inside group. The insiders share social
benets among themselves while maintaining high
barriers against outsiders. The benets more than offset
the higher costs of transacting exclusively with insider
group peers. The result is that resource allocation
decisions are radically altered. Arrow indicates that with
social capital, ‘discrimination no longer has a cost to
the discriminator; indeed, it has social rewards’ (Arrow
1998:98).
One can draw strong parallels between the experiences
of African Americans and Indigenous Australians.
Indeed, a number of authors have explored the
ramications of bias and discrimination on Indigenous
Australians (Foley 2003, 2006; Schaper 2007; Booth
etal. 2012; Biddle etal. 2013; Hunter 2014; Hunter
etal. 2014; Biddle 2015). And Foley (2006) specically
discusses the impact of prejudice on the success of
Indigenous businesses. Governments and large actors
in society must consider how they can inuence wider
societal changes to help address the ongoing effects
of bias, prejudice and discrimination on Indigenous
Australians and their access to economic opportunity.
14 Shirodkar, Hunter and Foley
Centre for Aboriginal Economic Policy Research
The issue of remoteness
The maps presented in this paper illustrate that
Indigenous businesses are more prominent in well-
developed markets or near major cities (Figures3 and 4).
Large population centres offer greater markets for the
goods and services that Indigenous businesses provide.
Even businesses that service the public sector will have
a comparative advantage by locating their operations in
major cities, because that is where most public sector
agencies are located. The larger the business, the
more reliant it is on a wide range of skills; and hence
complex labour markets will facilitate hiring workers
with suitable qualications or outsourcing to other
rms. The proximity to markets that urban environments
provide also means that individuals do not need to
achieve signicant economies of scale to operate
and earn a reasonable income. This could explain the
signicant proportion of sole trader/unincorporated
enterprise operations in southeastern Australia. It could
also explain the proportionately larger prevalence of
employing incorporated enterprises in some parts of
remote Australia.
The new economic geography literature describes
centripetal and centrifugal forces associated with existing
centres of economic activity (Krugman 1995). Network
economies and agglomeration economies are examples
of the former, which tend to reinforce the location
of existing economic activities and encourage new
businesses to locate in larger markets. Centrifugal forces
that push economic activities away from existing markets
include the immobility of resources located in regional
areas and low transport costs where infrastructure exists,
an absence of congestion, generally affordable rents, and
plenty of living space. The remarkable ongoing growth
in major urban areas throughout the world indicates that
centripetal factors dominate, on average, anchoring and
drawing activity towards the centre. Technology has
offered the prospect of delivering services remotely, but
in an era of globalisation this introduces the prospect
of competition from low-wage countries. The high
transportation and other transaction costs associated
with living in remote Australia continue to limit the
prospects for many remote communities to develop fully.
Supportive organisational and physical infrastructure
is crucial for Indigenous owner–managers. Greater and
sustained investment in road, rail, electricity, water and
other infrastructure will help with remote economic
development. One type of infrastructure that needs
considerable investment and support is information and
communication technology (Radoll & Hunter 2017).
The decline in the prevalence of Indigenous owner–
managers in remote Australia between 2011 and 2016
has followed two events: the abolition of the Community
Development Employment Projects (CDEP) scheme
and the end of the mining boom. The CDEP scheme
involved local community-run organisations that created
work experience for participants and opportunities
to work in communities and meet community needs
through small-scale activities that were not otherwise
funded. The funding provided for the CDEP scheme
was used to support the on-costs for these community
organisations. The abolition of the CDEP scheme led to
the closure of many of these organisations. Even if those
community organisations were unlikely to have owner–
managers associated with them in the census, they may
have supported other local enterprises with low-cost or
subsidised labour.
We also acknowledge the view that some of these CDEP
activities became ‘destinations’ for Indigenous workers,
particularly when few other prospects for long-term
work or business opportunities arose. We recognise that
Australian Government–contracted CDEP providers had
little incentive to turn such highly subsidised activities
into formal businesses, in particular to avoid the added
costs of having to pay minimum or award wages and
the administrative requirements of running a business.
And ultimately, the income ows to a provider are
higher when their case load of unemployed jobseekers
is higher, all things being equal. As a result, many
providers under CDEP and subsequently under the
Remote Jobs and Communities Programme beneted
nancially from keeping Indigenous Australians in
activities rather than employing them in a formal
business, or indeed placing workers into other
employment. The Community Development Programme
attempted to address the disincentives to turn many
income-generating activities into viable businesses. But
a number of providers, unsurprisingly, have indicated a
dislike of such rules since under previous regimes the
provider was able to retain all the income generated.
The end of the construction phase of the mining
boom has meant that many remote construction and
engineering-based businesses have had to shift their
focus to other parts of the country. Remote Indigenous
owner–managers are no exception, and have no doubt
been affected by the sizeable shift from construction
to mining production. It has occurred while Indigenous
employment in the mining sector has grown, perhaps
because a nearby workforce of Indigenous Australians
is available for the ongoing production activities of
caepr.cass.anu.edu.au
Working Paper No. 125/2018 15
these mines. Governments should also consider the
ongoing implications of measures from the Northern
Territory Intervention and the subsequent Stronger
Futures policies that may have constrained remote
communities in their abilities to develop their economies
and exercise independence.
Finally, one cannot ignore the compounding effect of
discriminatory behaviour and remoteness in regional,
rural and remote parts of Australia. Pearson (2007)
states in an op-ed:
To say that an [I]ndigenous child in a remote
community, with a history of poor health
and possessing minimal education, has the
right to choose her life path is nonsense. Her
choices have already been made for her: she is
predestined to a life removed from participation
in the economy.
Underlining the fatalism of Pearson’s position is the
spectre of structural racism. It is most apparent in
unconscious and conscious displays of bias, often seen
in remote locations but also present in urban settings.
Although laws no longer separate communities, the
segregation that results from glares, lopsided frowns
and palpable distrust (which tell a person they are not
welcome) has a very real impact when someone decides
whether to participate in the economy. Walking through
the main streets of Alice Springs or Kununurra, one
would be hard-pressed to identify a single Indigenous
person working behind the counter in a shop, even
though Indigenous people make up 30–50% of the local
population – let alone identify any private enterprises
that are Indigenous-owned. Non-Indigenous Australian,
foreign and migrant workers occupy many positions
and own many of the businesses. That pattern was
also apparent in art galleries that purported to sell
legitimate Indigenous art. One government worker
described the situation as akin to apartheid. Perhaps it
is simply considered an immutable characteristic of the
remote Australian context. Such open segregation is
not often analysed in Australia. Evidence from Markham
and Biddle (2018a) around the degree of segregation
suggests the trends are mixed depending on the data
sources used.
6 Discussion and policy
implications
The sector’s recent growth is partially attributable to the
wider acceptance of Indigenous Australians in business.
Since 2015, the IPP has no doubt played a role. But,
despite recent successes, one cannot ignore the impact
that discrimination has on the economic participation
and socioeconomic status of marginalised Indigenous
Australians. More work is required to encourage and
empower greater numbers of Indigenous Australians to
access business opportunities if that is their inclination.
Importantly, governments and society at large need to
address discriminatory behaviours and attitudes in the
wider community. One action that governments could
take is to review their messaging about Indigenous
Australians and consider how that message may impact
on wider society’s perceptions of Indigenous people.
Does it cast Indigenous people in a positive light, does
it have negative connotations, and/or does it paint them
as victims and promulgate the ‘decit discourse’?
Policy makers, academia and other commentators
should acknowledge the role of demand-side factors
in generating opportunities for Indigenous owner–
managers. The mandatory allocation of remote
Australian Government contracts under the IPP may
partially address the scarcity of Indigenous owner–
managers in remote areas, but requires effective
implementation, including ensuring remote-based
Australian Government procurement staff are aware of
their obligations to implement the IPP.
For lenders, suppliers and potential business partners
of Indigenous Australians to break closed networks
and release the economic potential of First Australians,
it is worth rst acknowledging one’s own biases. We
must recognise that the actions of even freewheeling
entrepreneurial capitalists and cold mercantile
institutions, which the ‘invisible hand’ supposedly
guides, are not immune to societal bias and prejudice.
Prejudice can infect decision making that would
otherwise be calculated and objective. Acknowledgment
offers a good rst step to begin a process of
incrementally rectifying the systemic societal barriers
16 Shirodkar, Hunter and Foley
Centre for Aboriginal Economic Policy Research
that have severely restricted Indigenous Australians from
accessing and exploiting economic opportunities for
two and a half centuries.
One novel approach to break the cycle is for
institutions to have offshore subsidiaries or offshore
partner organisations undertake the assessment of
Indigenous business proposals, which may help remove
the Australian colour lens that otherwise taints the
institutions’ assessors. The approach offers potentially
signicant rewards, for it could unlock fresh territories
for growth and wealth creation that would otherwise
remain unexplored and invisible to the institution.
Another approach is to hire greater numbers of capable
Indigenous Australians and place them in positions
where they can use their asymmetric informational
advantage about Indigenous Australians to make
the institution aware of, and highlight the rewards of
investing in, Indigenous individuals, communities and
peoples, while minimising any risks.
Given the lower proportion of women going into
business across the Indigenous and non-Indigenous
populations, the government should consider initiatives
that address the glass ceiling. Government efforts to
address the gender balance issue in business may
require greater resources to support entrepreneurially
inclined women to start a business. That is not to
suggest that mainstream programs will necessarily
reach all Indigenous women. Indigenous women
arguably face even greater societal hurdles that may bar
their entry into business. Specic programs that support
entrepreneurially inclined Indigenous women must form
part of the mix.
Governments should also consider broader regional
development initiatives for remote areas. If demand-
side explanations are important, then policy needs to
focus on regional economic development that includes
Indigenous people at its core and not the periphery. This
will ensure that local economic activity is sustainable
and provides an adequate level of economic growth to
sustain the demand for Indigenous owner–managers
and build a suitably skilled local Indigenous workforce.
It is difcult to predict winners in terms of businesses
or even industries, but the economic development
literature may provide theoretical insight into the
processes of regional development (Thirlwall 2011).
Policies such as the IPP target remote areas. But it is
necessary to also address the general lack of market
and governmental expenditure opportunities in such
areas. Further data about the location of IPP contracts
would provide greater insights about the inroads that
the IPP is making in remote Australian Government
procurement spending. And if governments were to
investigate regional policy, then Indigenous businesses
in regional and remote Australia are likely to offer good
places to start, since the economic multipliers offer
signicant benet for Indigenous and non-Indigenous
communities (Stoeckl etal. 2014).
It is difcult to be excessively optimistic about the
possibility of substantial economic development in
remote Australia unless we see substantial investment
in the infrastructure and service capacity needs of
remote, particularly Indigenous, communities. Nor
should we ignore the social, economic and legal factors
that limit the potential of Indigenous entrepreneurs to
activate economic opportunities on Indigenous and
native title land. Some industries, such as mining and
tourism, can generate opportunities for Indigenous
businesses, but those industries are heavily exposed to
international markets and uctuations in the Australian
dollar. In the short run, the best policy option is to
continue to support Indigenous businesses through the
IPP, Indigenous Business Australia and initiatives such
as the Indigenous Business Sector Strategy, which are
designed to address the historic effects of long-term
economic exclusion, including providing access to
capital, business support, greater information about
opportunities and business networks. Governments
must make long-term commitments to continue
investing in such initiatives, creating fertile ground for
the Indigenous business fraternity to grow and ourish.
caepr.cass.anu.edu.au
Working Paper No. 125/2018 17
Appendix A
Calculating the number
of Indigenous business
owner–managers
Calculating the number of Indigenous owner–managers
is difcult. The census provides a signicant but
ultimately partial picture. It reports a headline gure of
11592 for the number of Indigenous owner–managers
in 2016. For Indigenous Australians, the undercount as
measured through the ERP is around 19%. Using the
Post Enumeration Survey, the ABS reports the best
estimate of the Indigenous population, which is the ERP.
And thanks to the ACLD, we are aware that increasingly
more Australians are starting to identify as Indigenous
in the census, having previously not identied. This
paper makes appropriate adjustments to the headline
gure of 11592 to provide a more complete picture of
the rate of Indigenous business ownership and thereby
help to calculate the total number of Indigenous owner–
managers.
Data sources are:
2016 Census of Population and Housing (census)
2011–16 and 2006–11 ACLD
2016 ERP.
Key symbols used include:
Greek letters, which denote true population
parameters (
)
upper-case letters, which denote counts from the
census and the ERP (P, U )
E(x), which denotes the expected value of variable
x; it combines the ofcial census count and the
estimated undercounts for the various population
parameters
lower-case letters, which denote rates
(i.e.percentages, shares).
Key equations
= the true number of Indigenous
owner–managers in year t (1)
where
is an unknown population parameter and
denotes the true Indigenous residential population aged
15+ in year t,
is an unknown population parameter
that gives the true rate of Indigenous business
ownership as a share of the Indigenous 15+ population
in year t,
is the Indigenous ERP aged 15+ in
year t and
is the ACLD-adjusted census rate
of Indigenous business ownership as a share of the
Indigenous 15+ population.
(2)
where
is the census population count in year t and
is the estimated population undercount in year t.
(3)
Equation3 is expressed as a share of the total
Indigenous 15+ population as counted in the census
where:
is the census count of identied Indigenous
owner–managers.
is the net rate of newly identied Indigenous
status for owner–managers between censuses t and
t+1
is the net rate of newly identied Indigenous
status for people aged 15+ between censuses t and
t+1.
Calculating the net propensity to identify
as Indigenous for businesspeople and
the population at large (
and
)
One of the key components required in calculating the
number of Indigenous owner–managers is estimating
how many Indigenous Australians may not have
previously identied as Indigenous in one census, but
do so in future censuses. For instance, Markham and
Biddle (2018b) use the ABS’s ACLD to show that the
128500 person (19%) net increase in the Indigenous
population between 2011 and 2016 is partly due to
changes in how people were identied as being of
Indigenous origin.
The ACLD takes a 5% sample of census records
and links them across the 2011 and 2016 censuses.6
The data can identify whether people change their
Indigenous status during the intercensal period.
Markham and Biddle (2018b) make the case that
Indigenous Australians have many good reasons for not
disclosing their ancestry, not least of which is Australia’s
history of discrimination against Indigenous people.
They argue that the ‘decision to identify as Indigenous
(or not) in the census should not be interpreted as a
18 Shirodkar, Hunter and Foley
Centre for Aboriginal Economic Policy Research
reection on someone’s Indigenous identity, which
is a separate matter from what box gets ticked on a
census form.’
Evidence provided in Foley (2003) indicates that
Indigenous owner–managers have particular cause to
not reveal their Indigenous status. The added sensitivity,
which the data displays, relates to the increased
consequences of prejudice and racial discrimination,
which can occur from suppliers, customers and lenders.
Any one of these elements can destroy a productive
enterprise’s prospects for success. Foley documents
the experiences of a number of Indigenous owner–
managers who have previously faced signicant hurdles,
and, in some cases, had to fold their business once their
Indigenous identity was revealed to the non-Indigenous
business fraternity or clients.
We use the ACLD to estimate
and
(TableA.1).
is the net rate of newly identied Indigenous
Australians who are owner–managers, and
is the
net rate of newly identied Indigenous Australians who
are 15years and older. One needs both components
to ensure that the estimate of the rate of Indigenous
business ownership is specied appropriately.
Equation3 gives
, which is the ACLD-adjusted
census-based rate of Indigenous business ownership
and is constructed with the above two propensities to
identify as Indigenous in mind.
If we assume that Indigenous Australians do not shift
their Indigenous identity status in the census between
intercensal periods, both
and
are 0.
In such a situation, Equation3 collapses to
,
which is just the unadjusted census rate of Indigenous
business ownership. We will call it
.
The ACLD shows that for the period between 2011 and
2016,
(41.7%) and
(12.5%) are both positive
values (TableA.1) and that
. That means
the net rate of switching to Indigenous status between
the 2011 and 2016 censuses was higher for Indigenous
owner–managers than for the general Indigenous 15+
population. Since we cannot estimate the actual values
Table A.1 Changes to identication of Indigenous status across the ACLD
2 00 6 –11 2011–16 Projection
Base year 2006 2 0 11 2016
Future year 2011 2016 2021
Indigenous general population
Changed to Indigenous in future year 43400 95200
Changed out of Indigenous in future year 22600 37600
Net change 20900 57600
Indigenous pop. that self-identied in base year 409000 462500
% of Indigenous who did not identify in base year 5.1% ( )12.5% ( )12 .5% ( )
Indigenous business population
Changed to Indigenous na 2400 
Changed out of Indigenous na 200
Net change na 2000 
Indigenous pop. that self-identied in base year na 5008 
% of Indigenous who did not identify in base year 41.7% a ( ) 41.7% ( )41.7% ()
ACLD=Australian Census Longitudinal Dataset; na = not applicable
a The number of Indigenous owner–managers captured in the 5% sample that generated the 2006–11 ACLD was too small for the ABS
to provide a reasonably accurate estimate. Hence, we assume that the propensity to identify for owner–managers in the 20 06–11 ACLD
was the same as that in the 2011–16 ACLD.
caepr.cass.anu.edu.au
Working Paper No. 125/2018 19
for
and
until after the 2021 Census, we take
a simplifying assumption that
=41.7%
and
=12.5%.
Therefore, since
, it follows that
.
It means that, other things being equal, the estimated
rate of Indigenous business ownership in 2016,
is higher than the value obtained if one did not adjust
for the ‘new’ Indigenous Australians who changed their
status to Indigenous in the census between 2011 and
2016 – that is,
.
The results mean that an extra 41.7% of the 2016
Indigenous owner–manager population did not identify
as Indigenous in 2011 (but were owner–managers across
both periods). In comparison, only an extra 12.5% of the
2016 Indigenous 15+ population did not identify in 2011.
Bolded measurements in TableA.1 are assumptions,
which are applied where we do not have data. Other
estimates in TableA.1 are actual calculations from the
ACLD for the censuses 2006–11 and 2011–16. The ABS
has not yet released a version of the ACLD that follows a
sample of the population over the three censuses.
Where information is unknown, we have assumed
that the rate of non-identication for both populations
remains constant between the two versions of the
ACLD (2006–11 and 2011–16). Given the limited sample
of observations from the ACLD, we did not attempt to
undertake a sophisticated method of predicting the rate
of ‘new’ Indigenous identication. We will only be able to
verify this assumption following the release of the ACLD
for 2016–21.
The 2006–11 ACLD’s sample of Indigenous Australians
was not large enough to create an estimate of
,
and as such, we apply another simplifying assumption:
. We note that the signicant
discrepancy between the calculated rate of
and the assumed rate of
(5.1% and 41.7%,
respectively) likely results in a higher estimate of the
rate of Indigenous business ownership in 2006 than we
would have expected. Further information in subsequent
ACLDs may provide greater insight into the changes
in
over time, thereby enabling future research to
retrospectively obtain a more accurate gure for
.
The assumptions behind the bold values in TableA.1
are largely conservative. For instance, we know that
the proportion of the Indigenous 15+ population that
did not identify as Indigenous in the base year but
subsequently did increased from 5.1% between 2006
and 2011 to 12.5% between 2011 and 2016. One could,
therefore, make an assumption that the propensity of
Indigenous owner–managers to identify grew from 2006
to 2011 in line with the rate of growth in the Indigenous
population more broadly, and therefore the trend would
continue into the future, which, using our methodology,
would result in a higher estimate of Indigenous business
ownership in 2016. For the purposes of parsimony, we
have not made such an assumption.
If general trends continue, then the proportion of
Australians who identify as Indigenous could further
increase in subsequent censuses. With that rise
could also come a proportionate rise in the share
of Indigenous owner–managers, many of whom do
not currently identify, assuming the propensities of
the two groups (Indigenous owner–managers and
Indigenous 15+) to identify are positively correlated.
Any proportionate rise in the sensitivities will result in an
increase in the rate of Indigenous business ownership,
. But the trend cannot continue indenitely, and
a point in the future should arise where Indigenous
Australians do not feel the burdens of discrimination
as strongly as they currently do, and, as such, the
propensity to accurately reveal one’s Indigenous status
will become insensitive to issues of racial prejudice.
Calculating the number of Indigenous
owner–managers
We can now calculate the census-based rate of
Indigenous business ownership, which includes
identied and unidentied Indigenous owner–managers:
20 Shirodkar, Hunter and Foley
Centre for Aboriginal Economic Policy Research
Using the census-based rate of Indigenous business
ownership, we can estimate the total number of
Indigenous owner–managers in Australia as
.
In summary
Using this method, we estimate that there were around
17900 Indigenous owner–managers operating in 2016.
Applying this method to 2011 data, we estimate that
there were approximately 13700 Indigenous owner–
managers operating in 2011. Therefore, the number
of Indigenous owner–managers grew by around 30%
between 2011 and 2016. The estimate is 1200 more
owner–managers than previously estimated by Hunter
(2014) for that census year. And we estimate that there
were around 10400 Indigenous owner–managers in
2006, which is around 1500 more than the Hunter (2014)
estimate for 2006.
Appendix B
Census household form
questions
Historic changes to the classification of
owner–managers in the census
Changes to census classications of owner–managers
make timeseries comparisons difcult before and after
2001. The ABS has obtained information on status
in employment in every census since 1911 and on all
Indigenous Australians since 1971. The ABS made
changes to the status in employment question for the
2001 Census to enable more accurate data collection.
But the 2001 Census grouped individuals who owned
their own limited liability company (Pty Ltd) as a wage
or salary earner. As a result, the 2001 Census only
collected information on unincorporated enterprises
such as sole traders, partnerships and contractors
(FiguresB.1–B.4).
For the 2006 Census, the ABS changed the status in
employment questions to make them consistent with
questions used in the Labour Force Survey, and to
provide more detail on people working in their own
businesses. The census included a question about
whether or not the person was working for an employer
or working in their own business, which now included
proprietary limited liability companies. The inclusion
of companies into the owner–manager classication
provided a much more accurate headcount of the
number of people in business.
The status in employment questions for the 2011 and 2016
censuses are consistent and comparable with the 2006
Census. The main difference in 2016 is question37, which
claries that owner–managers must exclude themselves
from the count of the number of people they employ.7
The difference has no impact on the comparability of the
series across the last three censuses.
Social enterprises
A social enterprise is an organisation that applies
commercial strategies to maximise nancial, social
and environmental wellbeing, which may include
optimising social impact while also ensuring prots for
stakeholders. By denition, such enterprises combine
commercial and noncommercial objectives, and hence
this probably excludes strictly nonprot organisations.
However, many Indigenous communities have stores
caepr.cass.anu.edu.au
Working Paper No. 125/2018 21
and enterprises that are owned and operated on behalf
of the community. The analysis in this paper is looking at
businesses for which Indigenous Australians identied
themselves as owner–managers. The analysis is limited
by the questions in the census, which since 2006
have asked respondents to answer whether they are
‘working for an employer’ or ‘working in own business’.
The census does not provide any guidance as to
whether social enterprises should be counted as one’s
own business. Given the specic use of the term own
business, many social enterprises are unlikely to t the
denition, because they generally do not have individual
owners or are community organisations. An underlying
assumption of this paper is that the businesspeople
identied are owners of their business. Having said that,
some people who run social enterprises may well have
answered that they do own a business in the census.
That could explain the high level of incorporation among
Indigenous owners in parts of remote Australia, which is
explored in the section ‘Number of employees and
incorporation status’ on page 12.
The status in employment questions from the 2016
Census form can be viewed online.8
These questions provide information about the
employment status, in their main job, of people
aged 15years and over who were employed in the
week before census night. Respondents were asked
whether they were an employee, owner–manager
of an incorporated or unincorporated enterprise
(with a breakdown of whether the business had
employees), or a contributing family worker. Information
about status in employment is essential for a wide
range of social and economic policy and planning
purposes. The information is particularly important for
distinguishing between employees and those who are
self-employed.
Figure B.1 2001 Census household form question 33
Figure B.2 2006 Census household form questions 35–37
22 Shirodkar, Hunter and Foley
Centre for Aboriginal Economic Policy Research
Figure B.3 2011 Census household form questions 35–37
Figure B.4 2016 Census household form questions 35–37
caepr.cass.anu.edu.au
Working Paper No. 125/2018 23
Notes
1. Hunter (2015) shows that joint-owned Indigenous
businesses were around 70times more likely to
hire Indigenous employees than non-Indigenous
businesses, while majority-owned Indigenous
businesses were around 100times more likely.
2. The ABS provided the maps to Hunter and Foley on
specic request.
3. Detailed information on geographic locations of
Indigenous businesses will be published in Hunter
etal. (forthcoming).
4. Other Services combines the following ABS Census
categories: Accommodation and Food Services;
Information Media and Telecommunications;
Financial and Insurance Services; Rental, Hiring
and Real Estate Services; Professional, Scientic
and Technical Services; Administrative and Support
Services; and Other Services.
5. The category ‘Art’ encompasses the ABS
classication ‘Arts and Recreation Services’.
6. The rst iteration of the ACLD linked 2006 Census
records to 2011 records. Although all the information
is digitally available, the ABS has yet to link records
across the three censuses.
7. An additional minor change is that the 2016
Census relates to the output classication.
Output classication for this topic and the former
Employment type topic have been combined into
one: Status in employment. The ABS made the
decision following a review of labour statistics
standards. As a result, Employment type is no longer
treated as a separate topic.
8. www.abs.gov.au/ausstats/abs@.nsf/Lookup/by%20
Subject/2008.0~2016~Main%20Features~Status%20
in%20employment~119
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... Business ownership is one pathway to achieving greater economic selfdetermination, and a driver for Indigenous employment outcomes as well (Hunter, 2014). Growth in the sector and its potential to support Indigenous communities has been well documented (Shirodkar, Hunter and Foley, 2020;Shirodkar, Hunter and Foley, 2018;Dana, 2015;Hunter, 2014;Schaper, 2007;Foley, 2006;Foley, 2003;Altman, 2001;Foley, 2000;and Daly, 1993). Using information from the Australian Census Longitudinal dataset that follows approximately 5 per cent of the Australian population over three Censuses (i.e., over 10 years), Shirodkar, Hunter and Foley (2020) estimate that there were over 19,000 Indigenous business owner-managers at the time of the 2016 Census, but that the rate of Indigenous business ownership was only around 3.7 per cent compared with around 8.6 per cent for non-Indigenous Australia. ...
... Section 5 reports the findings, while section 6 concludes. Shirodkar, Hunter and Foley (2018) suggest the bias against Indigenous Australians occurs without awareness of prejudice amongst the majority, meaning the bias is implicit, inherent and unacknowledged, seeping seamlessly into the everyday decision making of societal actors, including those in positions of power. Biddle and Lahn (2016) state 'that most prejudice is implicit and, perhaps even more surprisingly, that implicit discrimination can have a more damaging effect on those who experience it [than conscious or explicit discrimination] ' (2016:4). ...
... Despite the phenomenon of discriminatory treatment, only a few Australian papers have asserted that discrimination and prejudice have impacts on Indigenous business ownership in Australia, including Shirodkar, Hunter and Foley (2020); Shirodkar and Hunter (2019); Shirodkar, Hunter and Foley (2018); Wood and Davidson (2011);Foley (2006);Foley (2003); Foley (2000) and Dana (1996). In particular, Foley (2003) finds that racial discrimination from mainstream Australia was a common occurrence and a constant presence in the life of the Indigenous entrepreneur, '[t]his was evident when dealing with Government institutions, financiers, creditors and even the entrepreneurs' clientele. ...
Article
Census and survey data show a high prevalence of youth inactivity among Indigenous Australians. The new Closing the Gap Agreement between the Coalition of Aboriginal and Torres Strait Islander Peak Organisations and the Australian governments at the federal, state and territory level aims to increase the proportion of Indigenous youth (aged 15-24 years) in full-time employment, education or training to 67 per cent by 2031. Understanding the factors that put young people at risk of disengagement from school or the labour market is a requisite for identifying the type and level of support required to increase the engagement of Indigenous Australians with the labour market and education system. However, there is a limited empirical evidence base to guide policy actions. Using data from the Australian Census of Longitudinal Dataset, this study provides extensive profiling of the characteristics of Indigenous youth not in employment, education or training. It also identifies the factors underlying individual-level changes in economic inactivity. The findings suggest that providing well-targeted supports to those who live in disadvantaged circumstances is paramount for mitigating economic inactivity among Indigenous youth.
... In addition, using industry-wide estimates of value add assumes that Indigenous-sector businesses have the same average productivity as non-Indigenous businesses in the same sector. PwC (2018) also uses 2016 ABS census data, which undercount Indigenous people by approximately 19 percent (Shirodkar, Hunter, & Foley, 2018). ...
... It would be inappropriate to assume that all value added by Indigenous businesses can be attributed to IK. Although there are some industries, such as the arts, in which arguably a relatively large share of value could be attributed to IK, these industries represent only a small portion of Indigenous ownermanagers, as Figure 3.3a (from Shirodkar, Hunter and Foley, 2018) shows. 43 Using the size of Indigenous businesses as a gauge of the value of IK would similarly be an inappropriate way of attributing value to IK. ...
... This may provide a way forward towards an appropriation for IK, particularly where other Indigenous factors of production other than IK can be controlled for. Source: Shirodkar, Hunter and Foley, 2018 Moreover, focusing on Indigenous-owned businesses excludes other businesses which may also draw on IK, despite not being Indigenous-owned. For example, large corporates like Qantas, and the government companies IBA and ILSC. ...
Technical Report
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This report provides guidance to IP Australia on the best approaches to estimating the market value of Indigenous Knowledge (IK) now and in the future, along with consideration for IK’s value in the context of patents, trade marks, designs and plant breeder’s rights.
... As of 2016, it has been estimated that there are now 17,900 Indigenous business owners operating in Australia, growing by around 30% since 2011 (Shirodkar et al., 2018). Indigenous Australians are crafting and operating businesses in neo-liberal capitalist systems. ...
... A strong Indigenous business sector will drive Indigenous financial independence, create wealth and future opportunities for Indigenous Australians (Hudson, 2016;Langton, 2012;Shirodkar et al., 2018). An important requirement of a self-determining holistic Indigenous business sector ecosystem is the development of business expertise of entrepreneurs across many areas of the economy. ...
Article
Recent Australian research has identified that the success of an Indigenous business greatly relies on the business acumen of its owner. Whilst business education offered through Business Schools is seemingly open to all, Indigenous Australian participation in these educational offerings have been low. In contrast the number of Indigenous businesses emerging in Australia over the past decade is building a demand for Indigenous specific business education offerings. The MURRA Indigenous Business Master Class at Melbourne Business School is such an example of an Indigenous business education program. We discuss how this program implements an andragogical philosophy into the Indigenous teaching and learning approach of business education to take into consideration an individual’s cultural and business knowledge to contextualise business learning. This paper identifies a framework of andragogy principles that contributes to the learning environment for Indigenous entrepreneurs. We identify four key learning principles and offer an evidence based model to progress business education. Through well designed Indigenous business education, business education can provide Indigenous entrepreneurs with an effective learning environment that integrates their cultural identity, highlights Indigenous knowledges and allows for the development of skills to support self-determination practices.
... Hunter (2015) demonstrates that Indigenous businesses are particularly important for Indigenous employment since they are up to 100 times more likely to employ Indigenous workers than other Australian businesses. At least until the COVID-19 recession, the Indigenous business sector has been growing rapidly (Shirodkar, Hunter and Foley 2018). However, Hunter (2015) demonstrates that Indigenous businesses are disproportionately concentrated in small to medium enterprises that may be particularly affected by a long COVID-19 recession, especially if it compromises cash flow and liquidity of the firm. ...
Article
Macroeconomic shocks and the policy responses to those shocks have significant effects on Australia’s economy. However, research into impacts of such shocks on the Indigenous labour force is limited. This paper explores how the COVID-19 crisis is likely to affect Indigenous labour market outcomes in future. While this paper briefly examines the immediate consequences of the COVID-19 crisis for Indigenous economic outcomes, it discusses the likely longer-run consequences for Indigenous employment at some length. The sectoral concentration of Indigenous employment, the relatively high levels of casual employment and the relatively young age profile of the Indigenous population may increase Indigenous exposure to significant economic risks. Indigenous business disproportionately employ Indigenous workers, but such businesses are concentrated in small to medium enterprises that may be sensitive to recessionary conditions, especially if economic uncertainty leads to a more generalised financial crisis involving liquidity constraints. Recent history demonstrates that Indigenous employment rates have increased only gradually in the long period of macroeconomic growth leading up to the pandemic. Historical disadvantage, discrimination and geographical constraints are important drivers of the dynamics of Indigenous labour market disadvantage, that limit educational attainment and ability to find work. For those Indigenous people who secure employment, it can be difficult to retain employment. COVID-19 is likely to lead to an intense period of structural adjustment in the economy, and it is important for the Indigenous community and businesses to position themselves to take advantage of potential opportunities and minimise potential risks. The ongoing digital divide may be a particular problem for Indigenous people accessing work remotely. Poor access to the internet of a substantial number of Indigenous households may also exacerbate access to remote education. Such issues have important implications for addressing Indigenous disadvantage in future.
... Energy services can provide 24 hour access to refrigeration, lighting, cooling, information and education services with few recurrent (liquid fuel) inputs. Such supportive physical infrastructure can be crucial for many Indigenous owner managers in the early years of establishing Indigenous businesses and industry (Shirodkar, Hunter and Foley 2018). These standalone off-grid renewable energy systems either totally or partially replace costly diesel-fuels, thereby eliminating emissions from generation as well as those created by the transport of liquid fuels over vast distances. ...
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This paper uses the capability approach to analyse renewable energy developments on Aboriginal land in Australia’s Pilbara and Kimberley regions. These regions in the north-west of Australia have very high rates of Indigenous land tenure, and are attractive for both solar and wind power generation, particularly as developing technology makes it economically feasible to transport power over large distances. They are also remote from Australia’s electricity networks and often rely on expensive fossil fuels for electricity generation. Resident Aboriginal communities are among the most income-poor in Australia yet live in regions rich in renewable energy. Their ability to benefit from the opportunities offered by a transition to renewable sources of energy varies according to a number of factors. This paper examines the conditions under which Indigenous capabilities may be enhanced or inhibited, through examining three scales of energy generation: large-scale developments for export; remote utility-owned networks; and small-scale standalone off-grid applications. This paper will ask what capabilities can Indigenous people achieve from a just approach to a renewable energy transition in northern Australia, and what capabilities are required in order to gain maximum benefit from this current rapid energy transition?
... Shirodkar, Hunter and Foley (2018) suggest the bias against Indigenous Australians occurs without awareness of prejudice amongst the majority, meaning the bias is implicit, inherent and unacknowledged, seeping seamlessly into the everyday decision making of societal actors, including those in positions of power. Biddle and Lahn (2018) state that "that most prejudice is implicit and, perhaps even more surprisingly, that implicit discrimination can have a more damaging effect on those who experience it [than conscious or explicit prejudice]." ...
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Shirodkar S (2019) Australian Journal of Indigenous Issues: Vol. 22, No. 3-4, Dec 2019: 3-34. Reported experiences of discrimination amongst Indigenous Australians may reflect an implicit bias inherent in Australian society. Such a bias may predispose vast swathes of the population towards considering Indigenous Australians through a negative lens, perhaps unconsciously. This paper explores previously unpublished data from the internationally renowned Implicit Association Test that attempts to measure the implicit biases that Australians may hold against Indigenous peoples. Other data collections on this issue focus on self-reported experiences of discrimination from the victims of verbal or physical racially motivated abuse (e.g. the Australian Reconciliation Barometer). This new data source, which comes from the social psychology domain, provides a means to measure the positive and negative implicit associations that Australian participants make about Indigenous and Caucasian Australians. The data reported in this paper contains observations from 11,099 unique individuals captured over the last decade across different cross sections of the Australian population, including based on gender, age, ethnic background, education level, occupation, religion and political leaning. The findings of this paper suggest that most Australian participants on average - regardless of background - hold an implicit bias against Indigenous Australians. A regression analysis of the results confirm that largely immutable characteristics such as gender, age, ethnic background, religion and political leaning have a statistically significant effect on a person's average level of implicit bias, as measured in this paper. The data could potentially explain why Indigenous Australians continue to experience some of the poorest socioeconomic conditions and living standards in this country - not necessarily through fault on the part of Indigenous Australians, but rather perhaps because of the lens the rest of Australia may view them through.
Article
Purpose Social procurement policies are an emerging policy instrument being used by governments around the world to leverage infrastructure and construction spending to address intractable social problems in the communities they represent. The relational nature of social procurement policies requires construction firms to develop new collaborative partnerships with organisations from the government, not-for-profit and community sectors. The aim of this paper is to address the paucity of research into the risks and opportunities of entering into these new cross-sector partnerships from the perspectives of the stakeholders involved and how this affects collaborative potential and social value outcomes for intended beneficiaries. Design/methodology/approach This case study research is based on a unique collaborative intermediary called Connectivity Centre created by an international contractor to coordinate its social procurement strategies. The findings draw on a thematic analysis of qualitative data from focus groups with 35 stakeholders from the construction, government, not-for-profit, social enterprise, education and employment sectors. Findings Findings indicate that potentially enormous opportunities which social procurement offers are being undermined by stakeholder nervousness about policy design, stability and implementation, poor risk management, information asymmetries, perverse incentives, candidate supply constraints, scepticism, traditional recruitment practices and industry capacity constraints. While these risks can be mitigated through collaborative initiatives like Connectivity Centres, this depends on new “relational” skills, knowledge and competencies which do not currently exist in construction. In conclusion, when social procurement policy requirements are excessive and imposed top-down, with little understanding of the construction industry's compliance capacity, intended social outcomes of these policies are unlikely to be achieved. Originality/value This research draws on theories of cross-sector collaboration developed in the realm of public sector management to address the lack of research into how the new cross-sector partnerships encouraged by emerging social procurement policies work in the construction industry. Contributing to the emerging literature on cross-sector collaboration, the findings expose the many challenges of working in cross-sector partnerships in highly transitionary project-based environments like construction.
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Governments of highly developed western nations with colonised Indigenous populations such as Australia, Canada and South Africa are increasingly turning to social procurement policies in an attempt to solve social inequities between Indigenous people and other citizens. They seek to use policies and funds attached to infrastructure development and construction to encourage private sector companies to provide training, employment and business opportunities for Indigenous people in the communities in which construction occurs. This paper outlines the rise of these policies and their origins, and critiques their connection to Indigenous people’s human rights, impact measurement, evaluation and accountability mechanisms. In doing so this paper also explores benefits and potential of social procurement policies, as well as risks. Drawing on insights from an Aboriginal-developed evaluation framework, Ngaa-bi-nya, and Indigenous Standpoint Theory, this paper highlights Indigenous peoples’ definitions of value and outlines their relevance to social procurement. Introducing the notion of cultural counterfactuals into social impact measurement research, it also offers a new conceptual framework to enable policymakers and practitioners to more accurately account for social procurement value and impact, including Indigenous people’s notions of social value.
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This paper uses self-reported data to illustrate how Indigenous Australians experience discrimination and how it is potentially associated with poor labour market outcomes. After giving consideration to what factors may lead people to report being discriminated against, an empirical analysis of self-reported discrimination is presented, utilising data from the 2008 National Aboriginal and Torres Strait Islander Social Survey (NATSISS). Correlations between discrimination experienced in different settings are identified, and the association of discrimination with human capital and other characteristics is presented. The results suggest that the main process driving the reporting of discrimination is the extent to which an individual is exposed to situations in which they interact with potential discriminators. This could mean that some Indigenous Australians decrease their labour supply in order to avoid potentially adverse (discriminatory) situations. Implications for understanding Indigenous disadvantage are discussed along with recommendations for both addressing discrimination and enhancing the resilience of individuals facing discrimination.
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Indigenous entrepreneurship is among the youngest fields of academic research, revealing that some cultural values are incompatible with the basic assumptions of mainstream theories of entrepreneurship. Social organisation among indigenous peoples is often based on kinship ties, not necessarily created in response to market needs. In contrast to Western-style capitalism, some indigenous economies display elements of egalitarianism, sharing and communal activity. Indigenous entrepreneurship often relies on immediately available resources, and consequently, work in indigenous communities may be less regular than is the case among mainstream societies. Much entrepreneurial activity among indigenous people involves internal economic activity with no transaction, while transactions often take place in the bazaar and in the informal sector, where enterprises often have limited inventory.
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This empirical study explores financial links between indigenous and non-indigenous economic systems in a remote river catchment in Northern Australia (the Mitchell). It finds evidence of a profound and asymmetric ‘disconnect’ between these economies: an exogenous increase in indigenous incomes raises the incomes of non-indigenous people, but the reverse is not true. Evidently, those seeking to improve the incomes of indigenous people in Northern Australia cannot simply seek to (i) increase payments to indigenous people, or (ii) expand the non-indigenous sector hoping that some benefits will ‘trickle down’. Instead, structural change is required.