Aboriginal businesses are powering ahead

Australia’s Indigenous businesses sector has doubled in size in the past 12 years and now employs more than 45,000 people, according to a comprehensive snapshot.

Marcia Langton from the Melbourne School of Population and Global Health. Picture: David Geraghty

Australia’s Indigenous businesses sector has doubled in size in the past 12 years and now employs more than 45,000 people, according to the most comprehensive snapshot of Aboriginal and Torres Strait Islander enterprise.

Melbourne University’s inaugural Indigenous Business Sector Snapshot Study gives a detailed picture of businesses in Australia that are at least 50 per cent Indigenous owned. The primary author of the snapshot is Michelle Evans, an associate professor in business and economics at the University of Melbourne.

Between 2006 and 2018, the number of people employed by ­Indigenous businesses climbed from 22,715 to 45,434, according to the snapshot survey. And the number of Indigenous businesses themselves increased from 1841 in 2006 to 3619 in 2018.

The gross income of Indigenous businesses more than doubled in that time, from $2.3bn to $4.9bn in current value. This is about the same as the increase in the value of Australia’s vegetable crop.

“Indigenous businesses provide a significant economic, social and cultural contribution to Australia. Their impact has largely gone unnoticed, and it has been difficult to realise the greater visibility of their achievements,” the snapshot report states.

“Moreover, rigorous evidence-based measurement of the extent of this contribution has been difficult until now. This is primarily due to the challenging nature of identifying and analysing Indigenous businesses from national data sources.”

Compared to non-Indigenous businesses, registered Indigenous businesses are bigger enterprises on average. They are less likely to be sole traders and less likely to be classified as small businesses.

The snapshot finds that in 2018, Indigenous businesses had an ­average gross income of $1.6m and 14 employees, compared to just $400,000 and two employees for non-Indigenous businesses.

The detailed picture of Indigenous businesses is the result of more than two years’ work to collate Indigenous business registries into a unified database.

Early on, this research was supported by Professor Marcia Langton from the Melbourne School of Population and Global Health, Dr Matthew Storey from the Faculty of Law and Victorian Aboriginal Heritage Council, and Melbourne Institute researchers Dr Cain Polidano and Associate Professor Julie Moschion.

The Indigenous Business Research Group believes the new information can help the Indigenous business sector and the people it works with in the community and the government, corporate, banking, education and investment sectors. The snapshot will capture an image of the Indigenous business sector year on year, allowing for deeper insights over time.

Critically, it will also show the impact of focused sector support, such as the introduction of procurement programs that preference Indigenous businesses.

“Indigenous business development and growth is an essential ­ingredient needed to fuel financial independence,” the snapshot report states.

“Policy and capability development initiatives require objective evidence as a base from which to identify and focus on areas that need most assistance.” The report also finds that while the number of Indigenous businesses has grown steadily, the gross income and employment figures for Indigenous-owned businesses appear to have had their growth interrupted since 2014 by the end of the last construction phase in mining.

The snapshot finds 58 per cent of Indigenous businesses are outside major cities; 32 per cent are regional and 26 per cent in remote locations. By comparison, almost three quarters of non-Indigenous businesses are in major cities.