the current status of the participation of indigenous Australians in business.
What are the implications of your findings for the wellbeing and hence closing
the gap in the standard of living between the indigenous and non- indigenous
Australians. write an essay including these points,Education, health and housing, to conclude add closing the gap in business is
helping in closing the gap in income for indigeneous people. conult the article provided
Ongoing growth in the number of Indigenous Australians in business Centre for Aboriginal Economic Policy Research ANU College of Arts & Social Sciences CAEPR WORKING PAPER 125/2018 O N G O I N G G R O W T H I N T H E N U M B E R O F I N D I G E N O U S A U S T R A L I A N S I N B U S I N E S S S SHIRODKAR, B HUNTER AND D FOLEY Series note The Centre for Aboriginal Economic Policy Research (CAEPR) undertakes high-quality, independent research to further the social and economic development and empowerment of Indigenous people throughout Australia. For more than 25 years, CAEPR has aimed to combine academic and teaching excellence on Indigenous economic and social development and public policy with realism, objectivity and relevance. CAEPR maintains a substantial publications program, including Research Monographs, Discussion Papers, Working Papers and Topical Issues. The CAEPR Working Paper series exists to disseminate preliminary research findings, to share ideas about a topic, or to elicit discussion and feedback. All Working Papers are subject to internal peer review. All CAEPR publications are available in electronic format for free download from CAEPR’s website: caepr.cass.anu.edu.au CAEPR is located within the Research School of Social Sciences in the College of Arts & Social Sciences at the Australian National University (ANU). The Centre is funded from a range of sources, including ANU, the Australian Research Council, industry and philanthropic partners, and Australian state and territory governments. As with all CAEPR publications, the views expressed in this Working Paper are those of the author(s) and do not reflect any official CAEPR position. Dr Janet Hunt Interim Director, CAEPR Research School of Social Sciences College of Arts & Social Sciences The Australian National University October 2018 http://caepr.cass.anu.edu.au caepr.cass.anu.edu.au CAEPR LINKS Click here to open bookmarks, and to access quick links to the CAEPR website, including: • Discussion Papers • Working Papers • Research Monographs • Topical Issues • Census Papers 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 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 Working Paper No.125/2018 ISSN 1442-3871 ISBN 978-1-925286-32-8 An electronic publication downloaded from . For a complete list of CAEPR Working Papers, see. 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 DOI: 10.25911/5bdbce256fae4 http://caepr.cass.anu.edu.au http://caepr.cass.anu.edu.au http://caepr.cass.anu.edu.au/research/publications/working-papers http://caepr.cass.anu.edu.au/research/publications/working-papers https://openresearch-repository.anu.edu.au/handle/1885/148675 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 officer 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 findings 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 reflect on further refinements 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 http://caepr.cass.anu.edu.au 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 profiles, 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 identification 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 significant 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 difficult to identify and even more difficult to analyse. And a number of entrepreneurs own multiple businesses at the same time, or have owned multiple businesses over their lifetime. Unsurprisingly, definitional differences arise. Foley (2013) argues that the overall number of Aboriginal and Torres Strait Islander businesses is unnecessarily restricted by official 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 definition given by the Australian Bureau of Statistics (ABS), this paper provides a more refined, 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 definitional 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 identified 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 final section (Section 6) reflects on the policy implications of the findings. caepr.cass.anu.edu.au Working Paper No. 125/2018 1 http://caepr.cass.anu.edu.au 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 profile 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 first two and a half years (July 2015 to December 2017). Currently, more than 1000 Indigenous