Indigenous Entrepreneurship: An Analysis of Capital Constraints

Encouraging entrepreneurship amongst Indigenous people, and fostering the development of small businesses, has been advocated as the most promising avenue for economic development amongst Indigenous communities (Fuller et al., 2003). Unfortunately, the number of Indigenous people engaged in small businesses in Australia is quite low when compared both to the national average and also with Indigenous participation rates in Canada and the United States of America (Hindle, 2002). While rationales for low Indigenous participation rates in small businesses have been advanced for other Pacific nations (Cheshire, 2001a, 2001b; Croulet and Sio, 1986; van der Grijp 2003; Curry 2005), a cogent explanation of analysis of low participation rates by Indigenous entrepreneurs in Australia remains to be articulated. One explanation for low Indigenous participation rates in small business is due to a lack of access to capital (de Bruin & Mataira 2003). Bourdieu (1986) suggested that there are a number of different types of capital. Firkin (2003) advances this reasoning by arguing the following forms of capital are relevant to entrepreneurs: financial, human, social, physical, organisational and technological. If an entrepreneur lacks of access these forms of capital, this is likely to have negative outcomes for the entrepreneurial venture (de Bruin and Dupuis 2003; Firkin 2003). The literature suggests that Indigenous entrepreneurs lack access to most of these forms of capital. For example, many Indigenous communities lack access to physical, labour, and information marketplaces (Miller 1985; Pearson, 2000); financial institutions and financial capital (Daly 1994); and have low levels of financial literacy and management skills (de Bruin and Matira 2003). Indigenous entrepreneurs do, however, have access to rich sources of social capital through their extended kinship networks. But this form of capital proffers a mixed blessing for Indigenous entrepreneurs. Dense social networks can provide rich sources of financial, intellectual and social capital (Naphiet & Goshal 19984). However if a network is over-embedded it can paradoxically limit access to resources (Uzzi 1997). For Indigenous entrepreneurs, social networks can even result in a drain on resources, as an Indigenous person in business is expected to share their wealth with their kin - even if this wealth is floor stock that needs to be sold in order to create operating surplus (Foley 2003). This is what has been referred to as the 'traders dilemma' in Pacific Island nations (van der Grijp 2003), as the entrepreneur needs to make a profit to succeed in business, but is also expected to distribute wealth among kinship networks. These calls for support and favours from extended networks of relations can often overwhelm new enterprises (Granovetter 1992:7). Sharing resources within Indigenous communities is more than an economic investment - it is also a social investment (Schwab, 1995). In Schwab's (1995) extended analysis the social networks of indigenous people, sharing acts as a primitive form of socialism through redistribution of wealth through the community, and reinforces the relationship of giver and receiver through the act of giving. To refuse a request from a relative in need is to reject the relationship itself (Schwab 1995). As Granovetter (1992: 4) argues, the ''(1) the pursuit of economic goals is normally accompanied by that of such non-economic ones as sociability, approval, status and power; (2) economic action (like all action) is socially situated and cannot be explained by individual motives alone; it is embedded in ongoing networks of personal relations rather than carried out by atomised actors''. Thus the rich social networks of Indigenous entrepreneurs, while a resource, are paradoxically a drain on financial resources, due to their embedded nature. A number of examples of attempts by government to address the capital constraints facing Indigenous communities are identified, specifically programs which seek to enhance financial literacy, micro savings and loans, business incubators and enterprise partnerships

Infrastructure transitions toward sustainability: a complex adaptive systems perspective

To ensure infrastructure assets are procured and maintained by government on behalf of citizens, appropriate policy and institutional architecture is needed, particularly if a fundamental shift to more sustainable infrastructure is the goal. The shift in recent years from competitive and resource-intensive procurement to more collaborative and sustainable approaches to infrastructure governance is considered a major transition in infrastructure procurement systems. In order to better understand this transition in infrastructure procurement arrangements, the concept of emergence from Complex Adaptive Systems (CAS) theory is offered as a key construct. Emergence holds that micro interactions can result in emergent macro order. Applying the concept of emergence to infrastructure procurement, this research examines how interaction of agents in individual projects can result in different industry structural characteristics. The paper concludes that CAS theory, and particularly the concept of ‘emergence’, provides a useful construct to understand infrastructure procurement dynamics and progress towards sustainability

Defining the dimensions of engineering asset procurement: towards an integrated model

Procuring engineering asset management is a critical activity of all types of government, with optimal approaches to procurement still in need of identification. This paper advances a novel approach of exploring the procurement of engineering assets across a number of dimensions: Project rules, organisational interaction rules and complexity. The dimensions of project rules are held to include cost, quality and time. The dimensions of organisational interaction rules are held to be collaboration, competition and control. Complexity is seen as in the project itself, in the interaction between organisations or in the business environment. Taken together these dimensions seem salient for any type of engineering asset, and provide a useful way of conceptualising procurement arrangements of these assets

Mapping the Australian Regulatory Environment: Implications for Construction Firms

As regulators, governments are often criticised for over‐regulating industries. This research project seeks to examine the regulation affecting the construction industry in a federal system of government. It uses a case study of the Australian system of government to focus on the question of the implications of regulation in the construction industry. Having established the extent of the regulatory environment, the research project considers the costs associated with this environment. Consequently, ways in which the regulatory burden on industry can be reduced are evaluated. The Construction Industry Business Environment project is working with industry and government agencies to improve regulatory harmonisation in Australia, and thereby reduce the regulatory burden on industry. It is found that while taxation and compliance costs are not likely to be reduced in the short term, costs arising from having to adapt to variation between regulatory regimes in a federal system of government, seem the most promising way of reducing regulatory costs. Identifying and reducing adaptive costs across jurisdictional are argued to present a novel approach to regulatory reform

China’s CCP 90 years old, faces hard road ahead

In The Fear of Barbarians French writer Tzvetan Todorov divides the world’s countries into four types: those led by appetite, those by resentment, those by fear, and those by indecision. In the camp of appetite sit the countries of the developing world, with their hunger for resources to push forward economic growth. In the resentment camp lie those who are motivated by anger over their treatment by the dominant powers like the US and Europe. The US and Europe, in fact, belong to the ‘fear’ camp – aware of the competition now coming to them from newly emerging countries

Asset management and governance: an analysis of fleet management process issues in an asset-intensive organization

Efficient asset management is a key performance driver for asset-intensive organizations. Achieving high utilization and return on investment on physical assets are central corporate objectives for public and private organisations alike. Current approaches on asset management include the engineering and governance perspectives. Both perspectives offer valuable but incomplete insights on the management of asset performance: experience demonstrates that an exclusive focus on one or the other may lead to sub-optimal asset and organizational performance. In this paper, we investigate how an integrated approach to asset management can be constructed in the context of vehicle fleets. Beginning with an analysis of how the asset management process is operated through the asset lifecycle, we identify key engineering and organizational factors influencing asset performance. The relationships between factors are analyzed to provide an integrated fleet asset management approach

Driving safety: enhancing communication between clients, constructors and designers

This paper, which stems from qualitative research undertaken by the CRC for Construction Innovation in the context of the development of a Guide to Best Practice for Safer Construction in the Australian construction industry, investigates the communication relationship between the client, designer and constructor, and identifies the conditions under which effective communication takes place. Previous research has made little headway with respect to putting into practice strategies that have the potential to improve communication between the client, designer and constructor. This paper seeks to address this ongoing problem. From analysis of client, designer and constructor interviews that form part of industry-selected case studies reflecting excellence in OHS, best-practice tools that have the potential to enhance multi-party communication between the client, designer and constructor are presented. This research also informs the development of workable implementation strategies

Employees' Choice of Superannuation Plan: Effects of Risk Transfer Costs

Consistent with a worldwide trend away from defined benefits towards accumulation benefits, many Australian employers who traditionally offered their workers defined superannuation benefits are closing their defined benefit plans to new members and/or offering existing members the option of transferring to an accumulation plan. There has also been a push to allow members greater choice in terms of both funds and investments. Against this background, the Superannuation Scheme for Australian Universities (SSAU) made an offer to its members in 1998 to transfer from the defined benefit section to an accumulation-style plan. Their position was that the choice of fund for employees should be a matter for the employer and the employees at the workplace or their respective representative organizations. At the conclusion of the offer period only one-third of SSAU members had elected to transfer to the Investment Choice Plan (ICP). This study seeks to explain why the majority of SSAU members chose to remain in the defined benefit plan when offered the option of transferring to the accumulation-style ICP. We propose that ‘risk transfer costs’ explain the low ICP acceptance rate. Research findings show that both those who chose to stay in the DBP and those who elected to transfer to the ICP were prepared to accept tradeoffs in their choice. DBP members were prepared to forego a higher quantum of expected benefits for greater security of benefits expected in the DBP, whereas the ICP members were prepared to forego such security and accepted higher investment risk in return for a higher expected quantum and greater control over their benefits. Differences in financial proficiency and differences across academic disciplines confirm that risk transfer costs were a key reason for the majority of SSAU members rejecting the ICP choice. Important implications arising from this study include the need for greater transparency of the risk transfer costs involved in offers of benefit structure change, such as that offered by the SSAU, and the need to incorporate compensation for such costs into the offer. Cognizance also needs to be taken of the major risk transfer cost of becoming informed about superannuation and the consequences of such costs for the Government’s intentions to mandate superannuation fund choice for all Australian workers