Accelerating Indigenous Entrepreneurship: Insights from the Census
By Bernard Salt AM, Special Adviser, KPMG Australia, Shelley Reys, CEO, Arrilla Consulting Pty Ltd
Co-lead, KPMG Arrilla Indigenous Services, Catherine Hunter, Partner, Co-lead, KPMG Arrilla
Indigenous Services & James Mabbott, Partner, Innovation & Digital Solutions
It’s been a decade since the 2008 apology to the stolen generation and it’s fitting the 2016 Census results confirm a rise in the number of Indigenous business owners, both male and female. Strong evidence of an expanding and strengthening Indigenous business community within Australia.
Just over 6 percent of the workforce is comprised of business owners. Less than half the non-Indigenous proportion, but the gap is narrowing. The most recent Census identifies almost 12,000 Indigenous business owners. In one sense Indigenous business is booming – growing at an average rate of around 600 net new businesses every year.
The success of Indigenous business is a core driver of Indigenous employment. According to Supply Nation, Indigenous businesses employ thirty times the number of Indigenous people than other businesses, reinvest revenues in their communities and strengthen their Indigenous employees’ connection to culture.
This trend from 2011 pre-dates a federal government initiative from 2015 to support a policy of procurement from Indigenous businesses.
The market has grown from $6 million in its first year to more than $1 billion by the third year of operation. And the policy has won the broader support of corporate Australia as part of their commitment to the process of reconciliation.
A percentage of a company’s procurement from Indigenous business now forms part of many Reconciliations Action Plans (RAPs) including our KPMG Australia RAP. And in the same time period that government spend has risen, Business Council of Australia member companies have spent over $2 billion with Indigenous business.
But there is a downside to this growth. Many of these businesses rely on manual labour. With an Australian economy being leveraged into the fourth industrial revolution where businesses built on digital, AI and machine learning will be the winners, this growth may be unsustainable.
The fourth industrial revolution should present great opportunity for the economic development of Indigenous Australia, but it will take more than opportunity to empower young Indigenous Australians to join the revolution.
Education is a key factor in empowering young people. But progress is slow to closing the gap in school attendance. In the latest Closing the Gap Report the gap between school attendance for Indigenous and non-Indigenous children has not improved and still sits at 10 percent. And the figure worsens as students approach Year 12.
But it is not all bad news and the target to halve the gap in Year 12 attainment by 2020 is on track; down to 12.6 percentage points over the past decade to 23.8 percentage points in 2016. Still too high – but the trajectory is up.
As more Indigenous teenagers reach Year 12 the opportunities for them to reap the benefits of the entrepreneurial digital age increase.
Indigenous Australians are, on average, much younger than other Australians. Sixty percent are aged under 35 years. Children, teenagers and young adults are ready to seize on new competencies that power the startup economy. They are also likely to be avid users of new digital services. With access to an internet connection and new technology, there is new potential for Indigenous and non-Indigenous Australians to access global audiences.
To achieve this, young Indigenous Australians need equal access to tech education, training and learning opportunities. This may lead to completely unique Indigenous ventures; think agtech, mining-tech and clean-tech.
There is no reason we could not see Indigenous robotics or Indigenous artificial intelligence ventures.
To achieve this both government and business need to continue to provide equal opportunities for Indigenous Australians as growth in the Indigenous economy will benefit all Australians.