Indigenous-owned businesses: Creating strong Indigenous employment
Christian Eva (@ChristianEva9), Kerry Bodle, Dennis Foley, Jessica Harris, and Boyd Hunter discuss their new research in the Australian Journal of Social Issues on Indigenous owned businesses, which provides updated analysis on the sector and helps us understand how these businesses facilitate strong Indigenous employment.
The Indigenous business sector in Australia is undergoing a period of significant growth in recent years, as the number or Indigenous-owned businesses continues to rise. An Indigenous-owned business is defined as such in Australia if the business is at least 50% owned by an Aboriginal and/or Torres Strait Islander person or persons. There is some debate about whether this standard should increase to 51% (or higher), as there are concerns about ‘Black Cladding’, which refers to when businesses pose as ‘Indigenous’ to gain reputational or financial benefit, when Indigenous people/s involved in the business don’t have a controlling share of it. This is important, as what we know about Indigenous businesses is that by being run by Indigenous people, they maintain significant economic and social impacts for Indigenous peoples. Whilst most Indigenous businesses are for-profit, there is a strong level of social enterprise within the sector, with many businesses undertaking directly (or providing finance) to social impact initiatives. An area for which Indigenous businesses are most cited for is their facilitation of strong Indigenous employment.
Indigenous business – strong Indigenous employers
Previous research has shown is that Indigenous-owned businesses are also able to maintain strong levels of Indigenous employment. However, this existing research relied on data from 2013, which came before the growth in public registries of Indigenous businesses available for analysis such as Supply Nation, and before various policies that have helped to grow the Indigenous business sector. Therefore, we have recently undertaken new research to provide updated analysis on the sector.
Image by David Clode on Unsplash
At the end of 2021, Supply Nation listed 3,327 Indigenous-owned businesses, with over 93% of these operating as for-profit. These businesses employed almost 38,000 people in total, over one third (35.8%) of whom are Indigenous. Consider that Indigenous people make up 3.8% of the total Australian population, and that Indigenous-owned businesses are employing Indigenous people at almost ten times that rate. And consider that non-Indigenous businesses use that 3.8% figure as their aspirational Indigenous employment targets, and still struggle to meet that.
What drives these outcomes?
So why do Indigenous-owned businesses maintain such large Indigenous workforces? For many people, the presumption is that Indigenous businesses must be in locations where there are larger Indigenous populations, or that they work in industries that involve work that use Indigenous knowledges. Whilst these things can have an influence on Indigenous employment, what our research shows is that the sector, and Indigenous employment in the sector, is broader than that. We demonstrate that Indigenous businesses maintain similar proportional representation across different industries to all Australian businesses more broadly. This shows that Indigenous businesses aren’t working in different areas to all Australian businesses.
We also show that across industries, Indigenous businesses maintain consistently strong average proportional Indigenous employment rates, ranging from 40% to over 70%. Similarly, Indigenous businesses maintain a shared distribution across all states and territories, with Indigenous employment remaining consistently strong across all but Tasmania. Whilst Indigenous not-for-profits do maintain the strongest levels of Indigenous employment, most likely because they directly serve Indigenous community needs (and specifically require Indigenous staff), for-profit businesses represent the vast majority of Indigenous businesses. In short, whilst business size, industry, location, and profit-status of businesses can have some impacts on the average levels of Indigenous employment, Indigenous businesses across all these business types still maintain significantly strong Indigenous employment levels.
Indigenous employment policy context
So why is this important? Indigenous employment is one of the targets of the Closing the Gap framework, with progress on these targets not progressing at the rate expected. Consider the number of policies and programs that various levels of Australian government have put in place to raise this level of employment. Consider the shift in non-Indigenous businesses and their expectations to increase their levels of Indigenous employment, and the programs and policies they have put in place. Consider how many jobs pop up when you search on Seek using the keyword ‘Aboriginal’ which show identified positions, or jobs that ‘encourage Aboriginal and/or Torres Strait applicants’. Indigenous businesses aren’t located in different areas, or different industries from other Australian businesses, and they primarily maintain for-profit motivations. So, what is it that makes Indigenous-owned businesses such strong employers of Indigenous people? Our study can’t answer this question, but it motivates further studies we’ve undertaken to help understand this question. Clearly the workplace practices of Indigenous-owned businesses are driving these outcomes, and similarly the practices of non-Indigenous businesses are not supporting their own positive outcomes.
The importance of Indigenous institutions
Most visibly we can see the failures of non-Indigenous institutions in case studies that appear in the news, such as the case of Stan Grant who recently stepped away from his role citing institutional failures at the ABC. However, we know from several recent surveys that over 50% of Indigenous people have been subjected to direct forms of racism in the workplace recently. We know that Indigenous retention rates are poorer in non-Indigenous businesses, and that Indigenous representation in senior management positions is lamentably small. We also know that there are significant historical and ongoing barriers to entering the workforce.
It is in all this context that we argue that Indigenous-owned businesses should be better drawn on to understand their practices and policies that support Indigenous employment, to better inform both public and private policies in Indigenous employment. Much of the focus of Indigenous employment policy and discourse is focused on Indigenous people, rather than non-Indigenous institutions. Clearly, Indigenous-owned businesses are not maintaining similar concerns in maintaining Indigenous employment, so it is necessary for non-Indigenous businesses to be learning from their best practice. But it also speaks to the importance of the growth of the sector and the importance of Indigenous-led institutions, and the benefits associated in supporting Indigenous business.
Post moderated by @DrSophieYates