The indigenous business sector of Australia is considered to be one among the fastest developing and growing sector of the country. About 12000 to 16000 businesses of Australia are indigenous-owned. In 1991, there were only 4000 indigenous people who were involved in the business but with time, it broadened and strengthened. Between the years 2011 to 2016, the number of self-employed grew by 30% (Collins et al., 2016). Today, 20,000 indigenous Australians are found to be self-employed in this sector. It is expected that by 2026 the indigenous self-employment will increase to about nearly 2200 (Dfat.gov.au, 2019). This signifies that the aboriginal business is diversifying as well as thriving, besides executing its presence in every territory and state across the country while working in each and every sector. The growth of this business segment has actually been supercharged with the assistance of Australian governments Indigenous Procurement Policy and Indigenous Business Sector Strategy. Outsized benefits are created by the home-grown business sectors for indigenous Australians through giving the indigenous communities the power to grow and generate their economic success and prosperity, in addition of benefitting the regional economies and widening the national economy. The aboriginal businesses have significant contribution towards Australian economy while improving the circumstances of the people of Torres Strait Island and indigenous Australians. Strong, self-supporting and diverse indigenous business sector can be identified as the key for empowering the aboriginals as well as the Torres Strait Islander, thereby placing the aboriginal Australian people in driver’s seat for their own economic future.
The essay aims at critically discussing the national and global factors, which have a great impact on the development of Australian Indigenous business hub. On the basis of the understanding and result obtained from the critical analysis and examination of the factors, opinions and suggestions are provided, supported by academic authorities, in relation to whether there exist an increasing need to re-examine the economic value systems of the nation (Australia) in order to enable sustainability and longevity of Indigenous Australian businesses in the future days.
Considering the all aboriginal Australian businesses as whole, it is found that the two main national factors that stimulated the growth of the sector are Indigenous Procurement Policy and Indigenous Business Sector Strategy. In 2015, Indigenous Procurement Policy (IPP) was introduced by the government of Australia, giving the Commonwealth agencies a target of awarding 3% of contracts to the indigenous businesses (Denny-Smith & Loosemore, 2017). Since the time the IPP had launched, beyond 1000 aboriginal businesses won over $1.084 billion from the Commonwealth contracts. These businesses are more expected to employ various other indigenous people showing a standard indigenous employment rate to be 39%. In order to ensure that the policy brings long lasting intergenerational change, the county’s government has also undertaken various investments thereby improving the access for business support, networks and capitals for the Indigenous Australians.
In the month of February of year 2018, Indigenous Business Sector Strategy was launched which put forward a 10-year plan for bringing an improvement towards business access and provide financial support to the indigenous businesses (Hunter, 2015). The strategy being a practical approach outlines the steps which Aboriginals as well as the Torres Strait Islander populace, government including private sector must take for supporting indigenous entrepreneurs, realizing their respective ambitions and assisting them to take their deserved place in international and domestic economy.
Apart from the above two mentioned vital strategy undertaken for development of Australian indigenous businesses, the national government has also took a wide range of programs to offer services for supporting the aboriginal businesses like providing grants, lower cost loans, business mentoring, assistance for business development, connections to various other markets and businesses. Moreover, emergence of the community based mechanisms helped in promoting the indigenous business growth such as Indigenous Chambers of Commerce, Global Corporate Network of Australia and Supply Nation (Berry, 2016).
The global factors that can be enlisted for the growth of the indigenous business sector are Free Trade Agreements, which reduces trade barriers, Global Communication tools that opened up wide possibilities for the indigenous Australians and their businesses worldwide, attainment of international rights and Global Innovation Strategy that help Australian indigenous businesses to compete at global level (Dutta, Lanvin & Wunsch-Vincent, 2018). Other noteworthy strategies for upliftment of indigenous Australian economy include Global Connections Fund, Export Market Development Grants (EMDG), Global Innovation Linkages programme, trade start policy and so on.
To narrow the research and critical investigation, five important indigenous businesses of Australia are taken into consideration for carrying out the required critical analysis of the national as well as the global factors. Among various indigenous businesses, the five important business sectors that will be taken into consideration for critical analysis are manufacturing sector, construction sector, wholesale and retail sector, agricultural sector and health and social services sector (Altman, Hunter & Biddle, 2018).
Manufacturing sector is a crucial part of Australian indigenous business economy. At present, it holds 7th position in terms of employment and 6th in terms of output (Cdn.aigroup.com.au, 2019). Various global and national factors had played a vital role in bringing its current growth and development. The Free Trade Agreements lead to the emergence of free global trading market (Anderson & Yotov, 2016). With the advent of unrestricted global market, the barriers of trade started to decline, soaring up the net export of the Australian indigenous manufacturing sector. While the overall export of Australia rose to about 15% to 20%, the share of indigenous manufacturing sector enhanced almost by double. Additionally, several strategies were also adopted to develop wide overseas markets and increase their online presence. The various undertaken national policies, as discussed above, encouraged and assisted the aboriginal manufacturing firms to adopt innovate technologies, grow their productivity, carry out efficient training procedures and others. The government of Australia had provided beyond $6.9 billion to the indigenous manufacturing sector as a financial form of assistance. Further, assistance is provided by the state to the manufacturing businesses in their jurisdiction in form of $93 million. Yet the sector is facing several challenges in form of strong global competition, high energy costs and skilled labor force (Cdn.aigroup.com.au, 2019).
Australian government has a huge number of diverse indigenous industry and economy assistance programs, which offer direct support to the construction sector. Currently the aboriginal construction sector is providing jobs to 1 million Australians nationwide, which makes it the 3rd largest indigenous sector in terms of employment in Australia (Supplynation.org.au, 2019). The business communities as well as the national government are already supporting this sector through Indigenous Procurement Policy in addition to corporate commitments for enhancing the access towards service opportunities to indigenous local construction sector. As the ease of entering the construction sector is quite high so this indigenous business sector has a significantly large number of sole traders, depicting 67%. However, even though this indigenous business has the facility to win government and corporate contracts but the profit margin is too low because of lack of scale. Moreover, this sector faces hardship in having appropriate access of bank guarantees. Besides these, other issues like matching demand and supply, slowed down growth rate (2013-2016) are some of the challenges of indigenous construction business hub (Loosemore & Denny-Smith, 2016).
The wholesale and retail sector of indigenous Australia is primarily made up of small and medium sized enterprises (Taylor & Hunter, 2018). The Global Connections Funds helped these small and medium indigenous enterprises to international markets while the Global Innovation Strategy assisted them to compete international markets efficiently. Financial assistance in form of export market development grants are provided to these firms. Besides, the global factors, national factors like IPP, Indigenous Business Sector Strategy, Indigenous Chambers of Commerce and others acted in a positive way to enhance the business segment (Altman & Daly, 2018). Apart from the benefits received by the indigenous wholesale and retail business sector which aided it to flourish, there exists some other factors which negatively impact the growth. The key issues include intensification of global competition, problem related to technological advancement, lack of required skills set and so on (Hunter, 2018).
The indigenous agricultural business sector is found to the foremost agricultural producer as well as exporter of the nation with beyond 325300 indigenous Australians employed in this industry (Stoeckl et al., 2014). The national government provides various facilities like farm household allowance, pest and weed management funding, drought communities program, tax deduction facility and so on to facilitate the growth and development of the sector. Regional Investment Corporation has been formed which grant loans to indigenous agriculturalists during their financial needs. Recently, the limit has been increase to about $2. Moreover, rebates are provided for the facility of on-farm water infrastructure. The free trade agreement help the market to flourish at global level. However, the major critical issues are faced by this business economy are drought, low fertility of soil, water scarcity and global warming (Head et al., 2014). Currency fluctuation, biosecurity, technological and economic issues are some of the major threats towards this business region.
The indigenous health and social services sector is experiencing a relatively large growth rate with an increasing number (7.6%) of employment since 2013. It provides 1.1 million job opportunities across the nation making it the 2nd largest Australian indigenous hub on the basis of job provision (Supplynation.org.au, 2019). There exist a number of government policies, which helped the sector to reach its peak such as Research and Development (R&D) Tax Incentive support, Biomedical Translation Fund (BTF), The Medical Research Future Fund, EMDG, Medical Device Fund (MDF) and many more. The R&D tax incentive helps the Australian Indigenous health service sector to undertake innovation at reduced cost while BTF gives a support of $500 million to the early staged indigenous health sectors. EMDG supports in developing export markets through financial assistance and MDF encourage development of competitive technology in addition of commercializing various indigenous health and social services industry. In spite of experiencing a rapid growth, this sector suffers from various problems related to demographic changes, high medical technology cost, issues related to medical research.
Conclusion
The critical analysis of the entire indigenous business economy of Australia followed by the examination of 5 most crucial Australian indigenous businesses show that even though they had gained from both the national as well as the global factor but still there exists some backlogs which are need to be overcome. In order to step forwards keep the drawback behind it is very much required to re-examine the economic value systems in Australia that will in turn enable the Indigenous Australian businesses to attain longevity and sustainability in the upcoming days. The most vital recommendation is that the Australian government and businesses can work with the Indigenous businesses together to assist create opportunities and chances for their sustainable as well as competitive growth. New policies, strategies and programs are to be developed for improving the indigenous firms’ access to the finance provided by commercial banks. The approach that is utilized by the lending organizations to evaluate and understand the appropriateness of aboriginal sectors needs is required to re-evaluate. Government must begin several business enhancement and development programs to support the early-staged indigenous businesses. Mentors are very much important and needed for bringing success of a business, so proper mentoring programs must be structure by the nation for bringing longevity and sustainability in the aboriginal businesses both nationwide and worldwide. Matured Indigenous businesses should be encouraged to become engaged with the mainstream networks of businesses. Accurate and sufficient guidance must be provided for efficient promotions of the businesses in addition of encouraging the development of high amount of skills and efficacy. Nonetheless, sufficient business incubators are necessary to develop both nationally as well as internationally for bringing a rapid growth in indigenous businesses. All the above discussed methods, policies and strategies are to be adopted for helping the Australian Indigenous business sector economy to reach the top most position through acquiring the necessary power and strength for achieving sustainability as well as longevity.
References
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Altman, J., Hunter, B., & Biddle, N. (2018). How realistic are the prospects for’closing the gaps’ in socioeconomic outcomes for Indigenous Australians?. Canberra, ACT: Centre for Aboriginal Economic Policy Research (CAEPR), The Australian National University.
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