Unlocking Indigenous entrepreneurial potential: A mixed methods study of the pathways and barriers into business for Indigenous Australians

Indigenous entrepreneurship is a pathway to economic and social empowerment. But a significant difference in Indigenous and non-Indigenous business ownership rates indicates barriers may limit opportunities for many First Australians to go into business. The literature suggests barriers into entrepreneurship reflect two core issues, systemic discrimination in wider Australian society and/or a clash of cultural values in Indigenous communities that, purportedly, do not align with a capitalist economic frame. The existing research to examine these issues is exclusively qualitative, with limited attempts to provide quantitative evidence to support prevailing theories. This research takes a sequential explanatory mixed methods approach to understand the nature of the barriers that Indigenous Australians face using quantitative analysis, and builds on the results using qualitative methods to examine the implications of those barriers on the life pathways of entrepreneurially inclined Indigenous Australians. This research initially develops a means of estimating the size of the Indigenous business sector, and confirms empirically the lower likelihood of going into business for Indigenous Australians compared with non-Indigenous Australians once accounting for other factors. But the result on its own only implies discrimination, and is insufficient to understand if the lower rates of business ownership are reflective of an external discriminatory environment or because of cultural differences. As a means to test the effect of external discrimination, this research draws upon a measure of implicit bias from social psychology (Greenwald et al. 1998) to estimate the effect on Indigenous business ownership rates across Australia. The result provides evidence that implicit bias (as an approximate measure of a systemic discrimination) reduces opportunities for Indigenous Australians to go into business, a statistically significant result. The qualitative component delves into the lives of 15 Indigenous Australians who display at least some entrepreneurial qualities, to understand how a systemically discriminatory environment affected their opportunities and pathways into Australian society and the economy. Their stories provide important insights into the nature of the challenges that entrepreneurially inclined Indigenous Australians face

Ongoing growth in the number of Indigenous Australians in business

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 operating in the economy, 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 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

A new method of estimating the number of Indigenous business owner-managers

Accurate estimates of the size of the Indigenous business sector are valuable for policy makers, practitioners and academics. Such estimates provide one measure of Indigenous economic advancement. A difficulty in developing these estimates has been a lack of suitable data for calculating key unknowns, such as changes in Indigenous identification by individuals. Using the three-wave Australian Census Longitudinal Dataset (ACLD), which links individuals between the past three (2006, 2011 and 2016) Censuses of Population and Housing, this paper addresses these data gaps and presents a transparent methodology for estimating the number of Indigenous business owner-managers. Using information about the greater rate of Indigenous self-identification over time from the ACLD, we estimate that around 19,400-Indigenous Australians were business owner-managers in 2016, almost double the number in 2006. We also estimate that Indigenous business ownership as a share of the Indigenous working-age population grew from around 3.3% in 2006 to around 3.7% in 2016. This increase occurred at a time when the rate of non-Indigenous business ownership decreased from 10.0% in 2006 to around 8.7% in 2016, reflecting the ongoing consolidation of the global economy since the global financial crisis. Although the Indigenous business ownership rate remains low compared with the non-Indigenous rate, the continued growth during challenging times is testament that greater numbers of Indigenous people are aspiring to the opportunity and ambition that business ownership affords. But barriers such as implicit or unconscious bias in society still exist and may limit opportunities for faster Indigenous economic advancement

Australia's current account deficit in a global imbalances context

This article looks at Australia’s current account deficits in light of concerns about the role of external imbalances in the global financial crisis and the difficulties now facing a number of countries that have run large current account deficits in recent years. Australia is clearly differentiated from other deficit countries in that recent high deficits have been driven by rises in non-housing investment – mainly in response to high resource prices – while national saving has been increasing. This suggests that our deficits are less likely to reflect underlying imbalances in the economy. It is plausible that Australia could maintain large inflows of foreign capital for some time, given resource demands from China and India. This would imply a further rise in our net foreign liabilities as a share of GDP. However, the trade balance adjustment that will be needed eventually to stabilise this share does not appear onerous, particularly as investment in the resources sector will boost future export supply