copy the linklink copied!Chapter 3. Fostering Indigenous job creation in urban areas

A large share of Indigenous Australians live in cities, which provide a range of key government services. This chapter highlights the role that local governments can play in involving Indigenous Australians in local decision-making to encourage employment with a special focus on the cities of Sydney, New South Wales and Perth, Wester Australia. The chapter also highlights entrepreneurship as a specific policy lever within cities that can be used to improve the overall well-being and income prospects of urban Indigenous Australians.

    

copy the linklink copied!Urban Indigenous Australians

Indigenous Australians have increasingly moved from rural to urban areas over the last decades. The share of Indigenous Australians living in urban areas has increased from 73% in 1996 to 79% in 2016. This has been mainly driven by the larger proportion of Indigenous Australians living in state capitals, which rose from 30% to 35% between 1996 and 2016 (Australian Bureau of Statistics, 2016[1]). Accordingly, the share of Indigenous Australians living in rural areas decreased from 27% in 1996 to 20% in 2016. The Northern Territory continues to have the highest proportion of Indigenous Australians living in rural areas (49%) of Australia’s states and territories. The Australian Capital Territory, Victoria and New South Wales contained the largest majorities of Indigenous Australians living in urban areas of 1 000 or more, accounting for 99%, 87% and 86% of the Indigenous population respectively.

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Figure 3.1. Share of urban and rural Indigenous Australians by state and territory, 2016
Figure 3.1. Share of urban and rural Indigenous Australians by state and territory, 2016

Note: Using the section of state structure, the major urban and other urban categories are combined to form urban areas, and bounded locality and rural balance are combined to form rural areas.

Source: ABS Census of Population and Housing, 2016.

Consistent with the trends seen at the state and territory level, the majority of Indigenous Australians live in Sydney and Brisbane when comparing Greater Capital Cities (or Greater Capital City Statistical Areas (GCCSAs)). Both cities combined have about 124 000 people who identify as Indigenous. Greater Perth has 31 214 persons who identify as Indigenous who represented less than 2% of the total city population. The Indigenous population of Sydney and Perth combined is 101 349, which represents 13% of the total Indigenous Australian population. Among GCCSAs, Indigenous Australians make up 8.7% of the population in Darwin, Northern Territory followed by Hobart, Tasmania at 3.8%, compared to the national average of 2.8%.

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Figure 3.2. Indigenous Australians within Greater Capital Cities, 2016
Figure 3.2. Indigenous Australians within Greater Capital Cities, 2016

Note: Non-Indigenous Identity also includes persons who did not specify an identity within the 2016 Census (the category "Indigenous Status Not Stated"). In 2016, this group composed 6% percent of the total Australian population. Apart from "Australia", all of the data points above refer to the census category Greater Capital City Statistical Area (GCCSA).

Source: Australian Bureau of Statistics (2016), Aboriginal and/or Torres Strait Islander Peoples QuickStats, 2016 Census, available at: www.abs.gov.au/websitedbs/D3310114.nsf/Home/2016%20Census%20Community%20Profiles.

The urban context can present Indigenous Australians with new challenges in accessing good employment opportunities. Local governments have a role to play in creating favourable conditions for Indigenous Australians to thrive in urban areas, for example by involving them in the local decision-making process. In addition, targeted policies in favour of Indigenous entrepreneurship can contribute to raising Indigenous Australians’ living standards in urban areas.

copy the linklink copied!Involving Indigenous Australians in urban decision-making

While urban Indigenous Australians have access to a broader range of jobs, challenges reamin across a range of socioeconomic indicators. This includes lower levels of education as well as higher levels of unemployment (The University of Queensland, 2016[2]). Involving local Indigenous communities in urban decision-making can help to foster culturally appropriate policies and programmes to lift living standards of urban Indigenous Australians and foster inclusive growth. The Australians Government is currently making active efforts in this area (see Box 3.1)

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Box 3.1. Promoting place-based collaboration with Indigenous Australians

The Australian Government is moving to a new way of working with Indigenous leaders and communities – one that supports Indigenous ownership, enables true partnerships with Government, and recognises the diversity of cultures and circumstances of Indigenous Australians. One example of this is the Indigenous designed and led Empowered Communities initiative being implemented in eight regions, where Indigenous communities and governments are working together to set priorities, improve services and apply funding effectively at a regional level. Importantly, it also aims to increase Indigenous ownership and give Indigenous Australians a greater say in decisions that affect them. The National Indigenous Australians Agency also has regional offices throughout Australia which enable direct engagement with community leaders and stakeholders.

Source: Australian Government National Indigenous Australians Agency, Empowered Communities, https://www.niaa.gov.au/indigenous-affairs/empowered-communities

Employment and skills gaps are large within cities in Australia

Indigenous Australians tend to have lower educational attainment rates when compared to the non-Indigenous population across urban settings in Australia. As shown in Chapter 1, the non-Indigenous population has higher levels of tertiary education (Bachelor’s Degree and above) than Indigenous Australians. This is the case across all Greater Capital Cities or Greater Capital City Statistical Areas (GCCSAs), where the share of Indigenous Australians with at least a Bachelor’s Degree is lower than the non-Indigenous Australian population (see Figure 3.3). In Greater Brisbane, Greater Adelaide, Greater Perth, Greater Hobart and Greater Darwin, less than 10% of Indigenous Australians have a Bachelor’s Degree or above, while in Greater Melbourne and Greater Sydney slightly more than 10% do so. Indigenous Australians in the Australian Capital Territory have the highest level of educational attainment across GCCSAs as 18.8% have at least a Bachelor’s Degree.

Indigenous Australians in urban areas tend to have poorer labour market outcomes than the rest of the population. Similar to the trends at the national level analysed in Chapter 2, employment rates are lower and unemployment rates higher for Indigenous Australians than the rest of the population across GCCSAs (see Figure 3.4). This suggests that a large share of the urban Indigenous workforce are jobless and/or looking for a job. The difference in employment rates between Indigenous Australians and the rest of the population is greater than 15 percentage points in Greater Perth and Greater Darwin, while the unemployment rate is more than 10 percentage points higher for Indigenous Australians than for the rest of the population in Greater Perth and Greater Adelaide.

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Figure 3.3. Share of Indigenous and non-Indigenous Australians with a Bachelor’s Degree and above by Greater Capital City, 2016
People aged 15 and above
Figure 3.3. Share of Indigenous and non-Indigenous Australians with a Bachelor’s Degree and above by Greater Capital City, 2016

Source: Australian Bureau of Statistics (2016), Census of Population and Housing, 2016

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Figure 3.4. Selected labour market indicators for Indigenous and non-Indigenous Australians by Greater Capital City, 2016
Figure 3.4. Selected labour market indicators for Indigenous and non-Indigenous Australians by Greater Capital City, 2016

Source: Australian Bureau of Statistics (2016), Census of Population and Housing, 2016

When looking at the types of jobs, a large share of urban Indigenous Australians are employed as community and personal service workers, technicians and trades workers and clerical and administrative staff. The share of Indigenous Australians employed as community and personal service workers is on average 4.5 percentage points higher than for the non-Indigenous Australian population across GCCSAs. The occupational distribution of urban Indigenous Australians tends to be more concentrated in lower-skilled jobs. The share of Indigenous Australians employed as labourers ranges from 7.7% in the Australian Capital Territory to 15.5% in Greater Hobart. Less than 10% of non-Indigenous workers are employed as labourers across all GCCSAs. The non-Indigenous Australian population has higher employment shares in professional occupations across major urban centres in Australia. The difference is highest in Greater Sydney, where only 15.8% of Indigenous workers are employed as professionals, compared to 26.9% for the non-Indigenous Australian population.

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Figure 3.5. Share of Indigenous non-Indigenous Australians employed in low and high qualified jobs (e.g. as labourers versus professionals) by Greater Capital City, 2016
Figure 3.5. Share of Indigenous non-Indigenous Australians employed in low and high qualified jobs (e.g. as labourers versus professionals) by Greater Capital City, 2016

Source: Australian Bureau of Statistics (2016), Census of Population and Housing, 2016

Construction, retail trade, health care and social assistance as well as public administration and safety industries employ the largest share of Indigenous Australians across GCCSAs. Employment in construction is particularly high for Indigenous Australians as compared to the rest of the population in most cities. In all GCCSAs except for Greater Hobart, Indigenous Australians have higher employment shares in the public sector than the rest of the population (Figure 3.6). The gap is around 7% in Greater Sydney and Greater Adelaide. Indigenous Australians are less likely to be employed in professional, scientific, technical, financial and insurance services jobs in Greater Sydney and Greater Melbourne. Due to the natural resources in Western Australia, employment of Indigenous Australians in the mining industry in Greater Perth represents 13% of total employment, compared to only 5.2% for the non-Indigenous Australian population.

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Figure 3.6. Share of Indigenous and non-Indigenous Australians employed in public administration and safety by Greater Capital City, 2016
Figure 3.6. Share of Indigenous and non-Indigenous Australians employed in public administration and safety by Greater Capital City, 2016

Source: Australian Bureau of Statistics (2016), Census of Population and Housing, 2016

A workers’ commuting pattern is one way of assessing job quality. According to the latest Census data, in 2016, Australia’s average commuting distance was 16.5 KMs, with significant differences across states/territories, regions and metropolitan areas. The share of people working at more than 30 KMs from home is higher for Indigenous Australians than for the rest of the population: the highest gaps between the two populations are in Greater Sydney and Greater Perth (6.8% and 9.8% respectively).

Lower educational attainment combined with poorer labour market outcomes have an impact on the personal income of Indigenous Australians. The share of people with no income or weekly income below AUD 500 is higher for Indigenous Australians than non-Indigenous Australians. For these categories, the smallest gap between these two groups is in Greater Sydney (8%) while the highest are within Greater Perth (13%) and Greater Darwin (19%). The share of people earning between AUD 500 and AUD 1 500 weekly does not seem to be related to Indigenous Identity as Australians taken as a whole present a similar distribution in all GCCSAs. Among those having a personal income above AUD 500, the gap between Indigenous and non-Indigenous Australians is around 11 percentage points except for Greater Darwin.

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Figure 3.7. Share of Indigenous non-Indigenous Australians reporting no income or less than AUD 500 per week across Greater Capital City, 2016
Figure 3.7. Share of Indigenous non-Indigenous Australians reporting no income or less than AUD 500 per week across Greater Capital City, 2016

Source: Australian Bureau of Statistics (2016), Census of Population and Housing, 2016

Urban Indigenous policies and programmes in Australia

Several cities in Australia have taken step to engage with local Indigenous communities to better integrate their needs and views in urban decision-making.

Sydney

Sydney Council appointed the first City of Sydney Aboriginal and Torres Strait Islander Advisory Panel on 15 December 2008. Made up of community and industry professionals, the panel's members are from Aboriginal and Torres Strait Islander backgrounds and live, work or study in the local area. Each member brings a wealth of knowledge and skills to the table. The panel provides advice on matters of importance to Indigenous Australians. It also reviews the City’s Indigenous protocols and makes a positive contribution to the organisation's relationship with Indigenous Australian organisations and leaders. The Aboriginal and Torres Strait Islander Advisory Panel meet at least six times a year.

Within Sydney, the Inner Sydney Aboriginal Alliance is setting a new standard for Indigenous engagement with government through Empowered Communities. It provides a platform for Indigenous Australians in Inner Sydney to unite with one voice to design and direct tailored solutions for the community’s needs. The Alliance’s goal is to empower the people of Redfern and La Perouse, districts of Sydney. The Alliance brings together key organisations and businesses in Inner Sydney who share a common goal of revitalising the area and the community. Redfern is a hub for many successful Indigenous community organisations, businesses and institutions. The district is well-known as the birthplace of Indigenous activism. These diverse organisations work across key areas of social and economic development for the community.

The Inner Sydney Empowered Communities (ISEC) vision sees Indigenous Australians as a group with a strong cultural identity. ISEC seeks to support Indigenous success through equal opportunity in a safe and thriving community. The ISEC Board is made up of equal representation from two local tables, the La Perouse Aboriginal Alliance and the Redfern EC Working Group. Community priorities and strategies are identified at the local level and are escalated to the Board for formal endorsement. The Family Mentoring Initiative is a vehicle being developed to inspire individuals to take control of their own lives by getting healthy, building discipline and routine. Through behavioural and attitude change, the initiative will build strong families and help return kids in out of home care to their parents.

Perth

The City of South Perth Aboriginal Engagement Strategy Working Group (AESWG) was established in March 2011 after a September 2010 Council resolution mandating the establishment of a working party with the objective to develop an Aboriginal Engagement Strategy for the City. In early 2011, AESWG searched for members of the community through advertisements and invited individuals to be part of the Working Group. The group is composed of representatives of key Indigenous community groups, members of the public, elected members and two City officers.

The objectives of the City of South Perth Aboriginal Engagement Strategy Working Group, are categorised into four guiding principles: 1) Connection/inclusiveness; 2) Advancement; 3) Relationships; and 4) Visibility. One of the key strategies of the Working Group was to provide opportunities for City of South Perth staff to develop an awareness of Noongar / Bibbulmun culture, history and current issues through information, education and networking. The goal was also to provide a networking forum for local service providers to come together, share information, for example through an annual/biannual information and networking forum facilitated and supported by the City.

Critical success factors

Cities as spaces of policy opportunity

Relative to some other OECD countries, local governments in Australia do not have a large influence on the delivery of employment and social programmes. However, urban centres and cities in Australia are spaces where local stakeholders can meet and engage community members on innovative solutions to Indigenous employment challenges. The examples of Indigenous engagement groups highlighted in both Perth and Sydney demonstrate how more can be done to engage with community leaders about their labour market, education, and economic development challenges.

There is a broader opportunity for cities in Australia to continue building stronger partnerships with Indigenous communities to develop a common understanding of the employment and skills challenges as well as opportunities for building awareness of indigenous values among the non-Indigenous population. Cities in Australia can play a key role in establishing strong connections with both Indigenous and non-Indigenous populations to create a local dialogue about Indigenous employment and economic development opportunities. In many cases, City leaders, such as Mayors, can lead the development of partnerships with employers. Such partnerships are not only critical in creating new job opportunities for Indigenous Australians, but also for educating employers about best human resources practices for employing Indigenous Australians.

CityDeals in Australia aim to bring together different levels of government, community, and the private sector to build long-term partnerships at the local level over 20 years. Given the diversity and characteristics of the cities across Australia, CityDeals acknowledge the importance of tailoring an approach towards a City’s needs from design, delivery and implementation. The Australian Government highlighted six general themes for CityDeals: infrastructure and investment; liveability and sustainability; housing; innovation and digital opportunities; governance, city, planning and regulation; jobs and skills (OECD, 2019[3]).

Leveraging procurement contracts

When government departments award contracts for local development and infrastructure, many of these contracts are awarded to non-Indigenous groups. Currently, certain types of government contracts require companies to hire a certain percentage of Indigenous workers or to include Indigenous business in their supply chain. However, if these quotas are not fulfilled, there are very little consequences. At most, a contract may not be renewed or a company may be less likely to secure future contracts. Stakeholders consulted for this OECD study living in the cities of Sydney and Perth noted that there is an opportunity for more investments to be given to local Indigenous groups.

Government procurement contracts, which have social clauses related to Indigenous employment and training, are beneficial towards ensuring that these investments benefit Indigenous communities. Currently, the Australian Government has an Indigenous Procurement Policy in place, established in July 2015 to leverage the Australian government’s annual multi-billion procurement spend to drive demand for Indigenous goods and services, stimulate Indigenous economic development and grow the Indigenous business sector. There is an opportunity to promote and extend this type of initiative within the private sector in Australia so that large firms are aware of the benefits of introducing these types of social clauses into the supply chain management and tendering practices.

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Box 3.2. Sydney Metro: Using public procurement to delivery skills training

Sydney Metro is a key infrastructure project within New South Wales and one of the largest public transport projects with over AUD 20 billion to be invested and over 26 000 people working to deliver Australia’s first fully automated rail service. The project faces several implementation challenges, including skills gaps due to a lack of workforce diversity, low training uptake and an ageing labour force in the construction, building, and rail transport sectors.

Sydney Metro developed a workforce development strategy which included embedding targets into contract requirements. Minimum requirements included that 20% of jobs were for the local workforce with workers employed for a minimum of 26 weeks; 20% of the workforce must participate in accredited training programmes to support workforce transferability; and employment targets for disadvantaged groups, which included Indigenous Australians, as well as youth, and the long-term unemployment.

Under this project, a pre-employment programme was launched to equip long-term unemployed candidates with key technical skills and the ability to communicate and work as part of a highly functioning team.

Source: (OECD, 2019[3])

copy the linklink copied!Promoting local entrepreneurship opportunities for Indigenous Australians

Inclusive entrepreneurship aims to ensure that all people have an opportunity to be successful as an entrepreneur (OECD/EU, 2017[4]). This includes policies and programmes helping groups that are under-represented and disadvantaged in local labour markets in starting and growing a business. This type of entrepreneurship allows them to participate economically and socially, generating income for themselves.

By starting and expanding a business, Indigenous Australians can increase their income opportunities and raise their living standards. This is especially true in urban areas, which can provide for easy access to business development services and entrepreneurial opportunities. However, Indigenous Australians are less likely than the rest of the population to start and grow a business. As such, inclusive entrepreneurship policies can play an important role in creating opportunities for Indigenous Australians.

While the need to foster entrepreneurship for Indigenous Australians has become a priority for the Australian Government, data availability on this topic is still limited. Furthermore, a lack of clear definition makes it difficult to quantify Indigenous entrepreneurship and enterprises. For example, self-employment can distort the interpretation of data when used as a proxy for firms. As such, the Australian Government has specifically defined Indigenous business in Australia (Box 3.3).

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Box 3.3. Defining Indigenous business in Australia

The Australian Government defines an Indigenous business as one that is at least 50% owned by an Indigenous person or people. Similar definitions are adopted by Indigenous Business Australia (IBA) Small Business programme as well as by Supply Nation, a non-profit organisation aiming to grow the Aboriginal and Torres Strait Islander business sector. Another existing definition identifies Indigenous businesses as those with at least 51% ownership by Indigenous Australians, that have an Indigenous Person as the principal executive officer and one in which the key decisions are made by Indigenous Australians (Foley, 2013[21]).

The Australian Bureau of Statistics uses two criteria to define what constitutes an Indigenous business: i) a business in which there is at least one owner who identifies as being of Indigenous heritage; ii) such a business has the majority share capital held by people of Aboriginal and Torres Strait Islander origin.

In the following paragraphs, the definition used for the analysis is based on the number of Aboriginal and Torres Strait Islander business owner managers as defined by the ABS. The ABS defines an “owner-manager” (referred to as business owner) as a person who operates his/her own enterprise, with or without employees, whether or not the business is of limited liability.

Source: Indigenous Business Australia (2018), Annual Report 2016-17; Foley, D. (2013), The Root of Contention in Determining what is an Australian Aboriginal Business, Indigenous Law Bulletin.

The Indigenous entrepreneurship context in Australia

Recent studies highlighted that Indigenous entrepreneurs start their business with less human capital, business knowledge, financial resources and restricted access to finance in comparison to the non-Indigenous population (Maritz and Foley, 2018[5]). According to this research conducted between 2000-17, discrimination against people with Indigenous origins also represents a barrier inhibiting the diffusion of self-employment within these communities.

As shown in Figure 3.8, the number of Indigenous business owners has significantly increased in recent years. In 2016, there were 11 592 business owners compared to 3 281 in 2011. Despite this high increase, Indigenous business owners still correspond to less than 1% of total overall managers when looking at business ownership rates across Australia. According to the latest Census, in 2016, Indigenous Australian business owners tended to be slightly younger than their non-Indigenous counterparts (44 vs. 48 years old). This implies that young Indigenous Australians are seeing entrepreneurship as a valuable career pathway. Indigenous entrepreneurs are more likely to employ Indigenous workers. This means that Indigenous entrepreneurships can increases job opportunities for Indigenous Australians and contribute to the overall economic development of the community. (Hunter, 2014).

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Figure 3.8. Trends in the number of Indigenous Australian business owners, 1991-2016
Figure 3.8. Trends in the number of Indigenous Australian business owners, 1991-2016

Source: Australian Bureau of Statistics, Census of Population and Housing

While the vast majority of Indigenous business owners ran unincorporated enterprises, the incorporated business sector has seen a rapid growth of almost 117% between 2006 and 2016. The majority of Indigenous businesses owners were in Queensland and in New South Wales. Figure 3.9 shows Australian Regional Statistical Areas Level 4 (SA4) with the highest number of Indigenous Australian business owners in 2016. The 10 SA4s with the greatest number of Indigenous business owners represent over a quarter of all business owners in Australia. In 2016, slightly less than a third of such businesses operated in the construction sector. Other relevant sectors of enterpreneurial activity include the administrative and support services, professional, scientific and technical services, in addition to healthcare and social assistance.

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Figure 3.9. Australian regions with the highest number of residents who were owner managers of Aboriginal and Torres Strait Islander origin, 2016
Figure 3.9. Australian regions with the highest number of residents who were owner managers of Aboriginal and Torres Strait Islander origin, 2016

Note: The geographical level used for this chart is Statistical Area level 4 (SA4)

Source: Australian Bureau of Statistics (2016), “Aboriginal and Torres Strait Islander Peoples Profile”, 2016 Census of Population and Housing

Three Indigenous business categories (i.e. self-employed individuals, enterprises and trusts) contributed between AUD 2.2 billion and AUD 6.6 billion to the Australian economy in 2016, representing between 0.1% and 0.4% of the Australian gross domestic product (GDP). Considering the recent increase of self-employment and the future increase of the Indigenous working age population, this contribution is expected to increase in the next decades (PwC, 2018[6]).

Indigenous entrepreneurs encounter several challenges that prevent them from starting and running a businesses compared to non-Indigenous entrepreneurs. For example, access to capital or equity is limited for Indigenous entrepreneurs, especially in rural and remote areas. However, while financial institutions are more prevalent in cities, presenting Indigenous entrepreneurs with an easier access to finance, their business activities still suffer from limited borrowing. As Indigenous Australians are overrepresented in low socioeconomic statutes (SES), their options for funding new businesses are more limited. With high lending criteria, Indigenous Australians with low SES are sometimes considered high risk, deterring financial institutions from creating accessible lending models.

Furthermore, as Indigenous Australians possess lower levels of skills, they have more difficulty starting a business. Without exposure to financial literacy training, managing the revenues, expenses and finance of an organisation can be challenging. In addition to the narrow possibilities for funding ventures, some prospective Indigenous business owners might not be aware of the funding options that are available. Therefore, sole proprietors tend to rely heavily on personal assets, leaving their own finances at risk.

Finally, the types of businesses created by Indigenous entrepreneurs are less likely to be in knowledge-based sectors. Based on KPMG’s analysis of the 2016 Census, Indigenous businesses operate more frequently in manual labour and service sectors. More access to Science, Technology, Engineering and Mathematics (STEM) courses could provide Indigenous Australians with greater access to business ideas and entrepreneurial activities within higher skilled occupations (KPMG, 2016[7]).

Indigenous entrepreneurship policies in Australia

Multiple realities faced by Indigenous Australian entrepreneurs highlight both the needs but also present opportunities for Indigenous Australian entrepreneurship. The Australian Government has implemented a range of policies to increase economic participation for Indigenous Australians and support Indigenous entrepreneurship and SME development. In turn, the Australian Government has put in public policies and initiatives respectively to increase both the demand and supply for goods and services from Indigenous businesses and employees through employment and business development programmes.

Critical success factors

Strengthening indigenous education

Based on current Indigenous Australian self-employment rates, it is estimated that around 2 200 people with Indigenous origins will potentially start a business between 2016 and 2026 (Department of the Prime Minister and Cabinet, 2017[8]). Research has found that entrepreneurship education is an opportunity to nurture this growth in Indigenous enterprises, in turn supporting the social and economic development of Indigenous Australians (Foley, 2012[9]). Indigenous entrepreneurial education in Australia has grown recently but requires further development and greater tailoring to the realities of Indigenous Australians (Foley, 2018[10]).

Indigenous Australian entrepreneurs have significantly different entrepreneurial education needs than non-Indigenous Australians. Extensive interviews of Indigenous Australian entrepreneurs indicates this group faces specific issues, notably concerning training and education (Foley, 2018[10]). For example, Indigenous Australians have less business expertise and fewer educational qualifications than their non-Indigenous counterparts (Foley, 2018[10]). Additionally, Indigenous Australians hold different values, a reality that affects their conception of business and enterprise (Foley, 2018[10]). For instance, Indigenous Australians differ significantly on values such as community, spirituality and sustainability (Colbourne, 2018[11]). Translated to enterprise, Indigenous Australians tend to privilege communal or social goals over individual or profit-motives, differences that education or training policies need to take into account to succeed in promoting Indigenous enterprise (Foley, 2018[10]).

Making financial capital more accessible

The Office of the United Nations High Commissioner for Human Rights (OHCHR) highlights access to finance to start enterprises as a driving source of marginalization among Indigenous populations (OHCHR, 2017[12]). Drawing in part on contributions by the Australian Government, the OHCHR identifies multiple barriers that Indigenous populations face to accessing financial capital to start an enterprise (OHCHR, 2017[12]):

  • A persistent prejudiced view of Indigenous business capacity: lower rates of home ownership, stigma as high-risk borrowers, lack of collateral, lack of business infrastructure as well as geographic isolation from business hubs;

  • Lack of legal protection for land and resources: limited recognition of communal land ownership, and restricted Indigenous ownership of natural resources (hampering access to credit for maintaining those resources);

  • Lack of inclusive Indigenous governance and leadership in business: Indigenous governance structures may not generate non-indigenous investor confidence;

  • Challenges facing indigenous women, youth and persons with disabilities in particular: social bias against Indigenous women, and exclusion of Indigenous women from the labour market;

  • Owning little private property or accumulated assets, Indigenous Australians in particular struggle to provide collateral for loans, a reality that impairs their ability to access credit (Brown, 2007[13]). In Australia, the problem of sparse collateral is accentuated by the lack of financial services in Indigenous communities (Brown, 2007[13]). Furthermore, poor credit scores can prevent some entrepreneurs from participating or receiving adequate financial support for their business.

Promoting entrepreneurial opportunities among Indigenous Australian youth

Self-employed Indigenous Australians tend to be younger than non-Indigenous Australian entrepreneurs, highlighting the importance of tailoring public policies and local initiatives to the needs of young entrepreneurs (Hunter, 2013[14]). Young Indigenous Australians face additional barriers to establish enterprises. For example, they do not inherit the same level of wealth as non-Indigenous people, a marked disadvantage to start a business (OHCHR, 2017[12]).

In Australia, Indigenous youth have relatively lower levels of social and economic qualifications and attainment, which can negatively impact their capacity to start and run a business. For example, the 2012 Programme for International Student Assessment (PISA) in Australia found significant and enduring differences in educational scores between Indigenous and non-Indigenous young people (Dreise and Thomson, 2014[15]). Furthermore, young Indigenous entrepreneurs will need to be exposed to holistic financial literacy training to ensure that they are given skills in all aspects of financial management.

Supporting business networks for Indigenous entrepreneurs

Many Indigenous Australians do not have the same levels of social capital compared to non-Indigenous Australians (Foley, 2008[16]). As such, research shows Indigenous Australians rely particularly on networking with non-Indigenous business actors to compensate (Foley, 2008[16]). Beyond networking, the Australian Government has highlighted the importance of supporting networking between Indigenous entrepreneurs and buyers and trade organisations (Australia, 2017[17]).

Australian public policies supporting Indigenous entrepreneurs

Indigenous Entrepreneurs Package

As part of its 2016 election commitment, the Australian Government announced it would build on the success of policies like the Indigenous Procurement Policy by introducing an AUD 115 million Indigenous Entrepreneurs Package. A strong Indigenous business sector has the potential to empower Indigenous Australians through job creation, financial security for families and communities and contribute to the growth of local economies and the broader Australian economy. The Indigenous Entrepreneurs Package includes three components, providing training, financing and networking assistance to the Indigenous Australian business community:

  • a commitment to develop the first Indigenous Business Sector Strategy to provide Indigenous businesses with the support, finances and networks they need for their businesses to thrive;

  • commitment to refocus Indigenous Business Australia’s business support programme on early stage entrepreneurs across Australia; and

  • an AUD 90 million Indigenous Entrepreneurs Fund.

Through this package, the Australian Government is particularly focused on bringing funding to facilitate the innovation and growth of Indigenous businesses in rural areas. This effort includes funding and support through an expanded microfinance programme aimed at regional and remote areas, as well as the Indigenous Entrepreneurs Fund, which involves grants to purchase plants and equipment. The Fund also includes a trial programme to dispatch business advisors to clients across remote Australia.

Indigenous Business Australia (IBA)

The Australian Government funds IBA which assists Aboriginal and Torres Strait Islanders to access the skills, knowledge and resources required to start and grow viable and sustainable businesses. IBA plays an important role in the development and growth of Indigenous businesses through a range of assistance for Indigenous Australians to start up, acquire, grow or exit a viable business. IBA intervenes mainly to provide general business support, external business expertise, and access to finance. To achieve this, IBA has three core areas of products and services:

  • Home ownership: IBA support Indigenous home ownership through housing loans to Indigenous Australians who have difficulty qualifying for housing finance, including in remote Australia;

  • Business development and assistance: IBA assists Indigenous Australians to access capital, commercial expertise, supply chains and other opportunities to start up, build and grow businesses. Working closely with corporate and government partners IBA link businesses to other networks and resources providing information and support to assist Indigenous business realise their goals. IBA also provides end-to-end programmes that assist its Aboriginal and Torres Strait Islander customers to build knowledge, gain greater skills and develop a sustainable business model to translate opportunities into long-term benefits for our customers (Indigenous Business Australia, 2018[18]). For instance, IBA supported 746 Indigenous Australians through an initial assessment of their business ideas;

  • Investment: IBA helps Indigenous Australians to access sound financial returns, build commercial capability, and generate employment, training and supply chain opportunities. For example in 2017–18, IBA delivered a total of 363 business finance products, provided 746 customers with an assessment of their business ideas, wrote 913 home loans totalling AUD 312 million across urban, regional and remote Australia, and supported Indigenous organisations with their investment aspirations (Indigenous Business Australia, 2018[18]). In 2017–18, 8% of IBA’s home loan customers were based in remote areas, 67% in regional areas, and 25% in urban areas. For business customers, 63% were based in regional and remote areas. IBA and its wider groups supported 1,911 Indigenous Australians in jobs through IBA’s investment and business solutions portfolio.

Indigenous Procurement Policy

To stimulate demand for Indigenous goods and services, the Australian Government put in place the IPP on 1 July 2015, with three main parts:

  • A target number of contracts that need to be awarded to Indigenous businesses.

  • A mandatory set-aside for contracts being delivered in remote areas and contracts valued between AUD 80,000 – AUD 200,000

  • Minimum Indigenous participation requirements in contracts valued at or above AUD 7.5 million in certain industries.

The IPP has driven an increase in demand for goods and services provided by businesses that are at least 50 per cent Indigenous‐owned. The mandatory minimum Indigenous employment and supplier use requirements for specified contracts valued at AUD 7.5 million and above are is designed to encourage major government suppliers to increase their use of Indigenous suppliers.

Under the IPP, all businesses – Indigenous and non-Indigenous businesses - that win contracts over AUD 7.5 million in specified industry sectors, must meet minimum Indigenous employment requirements or use Indigenous businesses in their supply chains. Indigenous employment or supplier use targets must be higher in remote areas to reflect the local Indigenous population. These mandatory minimum requirements ensure that Indigenous Australians gain skills and economic benefit from some of the larger work the Government outsources.

The Government recently introduced changes to create a new value target to apply from 1 July 2019. To ensure Indigenous businesses win higher value contracts at a level closer to those of non-Indigenous businesses, a target based on the value of contracts awarded will be set at one per cent in FY19-20 increasing by 0.25% each year until it reaches 3% in 2027. From 1 July 2020, Indigenous participation targets will be mandatory in high-value contracts across more specified industries increasing from 8 to 19.

Indigenous Business Sector Strategy (IBSS)

In order to support the demand created by mandatory public procurement standards from Indigenous enterprises, the Australian Government announced this 10-year strategy in 2018 to augment the supply of Indigenous Australian enterprises. IBSS seeks put Indigenous businesses at the forefront of the Australian economy and draws on solutions put forward by Indigenous businesses. Reflecting this intention to tailor support to Indigenous Australian, there has been a strong emphasis on consultation and ensuring culturally appropriate support and services in the design and delivery of the IBSS. The Government carried out an extensive consultation process with the Indigenous business sector during policy creation. In this consultation, Indigenous businesses identified four critical areas for development and growth, reflecting several of the success factors discussed above: (i) better business support, (ii) improved access to finance, (iii) stronger connections and relationships and (iv) better sharing of information about commercial opportunities.

The IBSS includes measures to improve access to finance, including an expanded microfinance scheme and a new Indigenous Entrepreneurs Capital Scheme. The IBSS has been designed to offer a combination of products designed to meet the needs of Indigenous businesses of different sizes and at different stages of development, including:

  • Indigenous Business Hubs: Based in major cities, these Hubs will work as one-stop-shops to access business advice, support and connections that Indigenous Australians need. Reflecting the Government’s wish to tailor support to Indigenous entrepreneurs, the IBSS recognizes the need for culturally safe spaces and culturally capable business support officers when establishing Indigenous business hubs. The NSW Aboriginal Land Council delivers the Indigenous Business and Employment Hub in Sydney. In Parramatta, they are located in temporary premises while they search for a permanent location in the Western Sydney area. The Government has also announced the establishment of Hubs in Perth and Adelaide;

  • Project Specific Support Hubs: These specific hubs will provide tailored support to Indigenous businesses looking to take advantage of major infrastructure or service delivery projects;

  • An expanded microbusiness support and microfinance footprint across Australia, to support entrepreneurial activity and economic development in regional and remote locations, and importantly to support Indigenous youth and women to start a business;

  • Indigenous Entrepreneurs Capital Scheme: the system aims to improve access to capital for Indigenous businesses. The Scheme will be open to growing Indigenous businesses that have been in operation for two years or more and are just below bank ready. The Scheme is intended to be flexible and leverage private sector experience to enable Indigenous businesses to access a broader range of finance products, build a banking relationship and a commercial credit history and transition to independent, mainstream banking over the medium term; and

  • Piloting a remote Indigenous business incubation model to help small businesses get started, by providing access to microfinance and specialist support. Pilot projects have been established in 12 remote regions.

Driving Indigenous Economic Development through Infrastructure Projects

Building on the success of the IPP, the Government is looking to new ways to leverage its expenditure, to create greater businesses and employment opportunities for Indigenous Australians. To support Indigenous Economic Development, the Australian Government is working across all levels of government and in collaboration with the private sector to increase Indigenous Australian participation in large-scale government infrastructure projects. To do so, the Government is embedding Indigenous economic objectives within cornerstone national infrastructure projects, which include Indigenous employment and supplier-use targets that reflect the available local Indigenous working-age population. Key infrastructure initiatives that provide Indigenous Australians with business and employment opportunities include:

  • The AUD 600 million Northern Australia Roads Program and the AUD 100 million Northern Australian Beef Roads Program, which will include Indigenous employment and procurement targets;

  • And the Northern Australia Infrastructure Facility, which encourages private sector investment funding. Indigenous employment and procurement targets have been applied to infrastructure projects which have resulted or will result from city deals in Western Sydney, Townsville and Darwin.

Non-governmental initiatives: Indigenous entrepreneurship programmes in Australia

Several actors deliver SME and entrepreneurship programmes for Indigenous Australians at the local level in Australia. The following section provides some examples, which include chambers of commerce, not-for-profit organisations and business hubs.

First Australian’s Capital

First Australian Capital aims to build cultural, creative and economic capital of Indigenous Australians. Through their impact fund, they aim to provide Indigenous Australians with access to commercial finance to start and build sustainable businesses. A key component of their work involves mentorship and better linking Indigenous entrepreneurs with already established business networks. First Australians Capital is also offering a new business partnering service, BlackOps, to help Indigenous enterprises get a skilled team to help them grow as well as finding, hiring and managing their own team. These type of services are charged at a percentage of their turnover of the business as it grows over time.

New South Wales Indigenous Chamber of Commerce (NSWICC)

New South Wales (NSW) was the birthplace of the first Indigenous Chamber of Commerce in Australia, established in 2006 to support Indigenous Australians to establish and operate their own businesses. Reflecting the isolation of many Indigenous entrepreneurs from business networks, NSWICC also sought to provide a forum for Indigenous businesses to come together to network, to share and to learn from each other. Since its establishment, the NSWICC has focused on nurturing, enabling, accelerating and mentoring Indigenous entrepreneurs and leadership in Indigenous communities.

In 2016, the NSWICC created the Indigenous Business Accelerator Program to support Indigenous entrepreneurs. This programme includes 2 days per month in the classroom where Indigenous entrepreneurs partake in modules on Business Readiness, Buyer Risk Management, Product to Market Fit, Digital Disruption, Partner Governance & Pitching to Win. The programme also includes 1 day per month in mentoring and expert coaching.

For job seekers, the Chamber offers a number of training workshops that focus on interview and CA preparation, as well as access to specialised training providers. The Chamber also offers an incubation space for Indigenous entrepreneurs seeking an urban centre presence to meet with key stakeholders. The Chamber also offers end-to-end programme consultancy, advice and facilitation services to assist Government Organisations to maximise their social and economic impact when engaging with Indigenous Australians, Communities and Businesses.

Barayamal

Barayamal is a registered charity with the Australian Charities and Not-for-profits Commission (ACNC), which aims to close the gap between Indigenous and non-Indigenous entrepreneurship. A key programme managed by this organisation is the Barayamal Business Accelerator, which provides essential education and training workshop to Indigenous entrepreneurs. The Accelerator is run by Indigenous Australians and also aims to provide mentoring early seed capital. It also provides working desk space for budding entrepreneurs. Through a 3-month intensive training course, Indigenous mentors support Indigenous entrepreneurs while business experts advise and counsel them. Barayamal also operates an eMentoring platform, which is an online programme designed to facilitate the connection of aspiring Indigenous professionals and entrepreneurs with mentors experienced in their field of interest.

Barayamal is also launching a Centre of Entrepreneurship in the West End, Brisbane to rapidly increase and grow Indigenous startups/businesses, as well as increase economic development opportunities for Indigenous Australians in Brisbane and throughout Australia. This centre will host up to 30 entrepreneurs in the co-working space area. The facility also includes a meeting room and event space. The event space has the capacity to host over 60 attendees, which will be used to run workshops, conferences, hackathons and community events.

Sydney Start-up Hub

Operated by Jobs for New South Wales (NSW), this Hub aims to support the creation of new jobs across NSW, increase the diversity of the NSW start-up community with more start-ups from regional NSW and non-ICT Industries, and grow the size and strength of the Sydney start-up ecosystem. The Hub aims to bring a diversity of organisations and talent together in a single location with 17 000 square metres across 11 floors. The high-density concentration helps spark innovation, ignite collaboration and provide easier and superior access to networks, skills, funding and leadership.

Supporting the regional start-up community is a priority for Jobs for NSW, as regional entrepreneurs are essential to job growth in their local communities. The Sydney Startup Hub enables regional start-ups to more easily access networks, potential customers and investment. While not specifically targeted to Indigenous entrepreneurs, this group would still be eligible for financial supports from Jobs for NSW — including grants, loans and loan guarantees. Start-ups may also benefit from Minimum Viable Product or Building Partnership grants in addition to other loan products.

Business Connect

The Business Connect programme is funded by the NSW Government and will provide business advisory services and business skills training from 1 January 2017 to 30 June 2020. Business Connect aims to support small businesses to start-up, create jobs through growth, help established small to medium enterprises (SMEs) become sustainable and increase business confidence across NSW. Business Connect plans to achieve these aims by: providing general and specialist business advice and government information to start-ups and SMEs, promoting business growth through innovation, improving resilience and boosting productivity and supporting digital readiness and regional business development. Business Connect services are provided by 11 independent service providers based across NSW, including specialist and multicultural service providers. Business Connect supports start-ups and SMEs through:

  • Supporting business creation through advice and information that assists start-ups to establish a new business and support new businesses to enhance their survival and long-term viability.

  • Supporting established SMEs by providing services that underpin profitability, business expansion and long-term business growth, enhance their survival and long-term viability, and support the orderly succession of ownership of existing businesses.

  • Delivering Business Skills Workshops or Seminars (including Webinars or online group support) to start-ups and SMEs when this is considered the most effective way of providing skills development and/or information.

  • Responding to occasions of disasters or other emergencies to support businesses where they are affected within NSW.

  • Referring start-ups and SMEs to relevant and appropriate additional services, to increase the value of support and to encourage continued skills development, strategic awareness and business planning.

  • Promoting digital readiness and engagement in the digital economy to businesses, increase digital and online technology skills and knowledge, especially in regions with new or increased internet capabilities, for example through satellite broadband or rollout of the National Broadband Network (NBN).

Opportunity hubs

Located in NSW, Opportunity Hubs aim to provide Indigenous youth with the confidence and knowledge to follow a supported pathway between secondary school and further education and/or employment. To achieve this outcome, Opportunity Hubs are building partnerships between schools, employers, education and training providers and the local community to coordinate and match employment, training and further education opportunities to individual students’ aspirations.

Non-government Opportunity Hub service providers have been contracted to coordinate and broker links with schools, employers, training providers, support services and Indigenous communities. In doing so, they deliver improved outcomes for youth, including increased participation and retention at school, aspiration and expectation of career pathways for Indigenous students, post-school enrolment in further education and training and placement in sustainable jobs. The establishment of Opportunity Hubs followed extensive consultations with local Indigenous communities and education and training stakeholders within the Opportunity Hub regions. Opportunity Hub conducted a tender process to select service providers.

Many Rivers

Many Rivers Microfinance Limited (Many Rivers) is a not-for-profit organisation that supports aspiring business owners with microenterprise development support and access to microfinance. Many Rivers offers micro and small business loans of up to AUD 5 000 for a sole business owner and up to AUD 10 000 for businesses with additional owners. Many Rivers can provide larger loans to existing clients. Reflecting the financing needs of Indigenous business, in June 2018, the Government entered into a partnership with Many Rivers to expand access to microbusiness support and microfinance for Indigenous clients in regional and remote regions.

copy the linklink copied!What can Australia learn from other OECD countries?

Local governments across several countries have taken steps to tackle urban Indigenous Australians’ challenges by better integrating them in the decision-making process. They have also used entrepreneurship as a policy lever to boost their living standards. In cities across Canada and New Zealand, independent bodies representing local Indigenous communities have been established to advise local governments, and strategies have been adopted to better integrate them into the local economy and decision-making process. Entrepreneurship support and education programmes for Indigenous entrepreneurs in Canada, Indigenous business growth services in New Zealand, and Indigenous entrepreneurial activities in the Barents Euro-Arctic co-operation region, have been instrumental in providing key support for Indigenous Australians to start and grow a business.

Involving Indigenous Peoples in urban decision-making

Lessons from Canada

In the city of Thunder Bay, Canada, the City Council has established an Aboriginal Liaison Strategy. The objective of the strategy is to enhance the well-being of the city’s Indigenous communities by creating a new civic relationship and partnership promoting the participation of Indigenous citizens in the social, economic, political and cultural life of the city, improving the quality of life for all citizens of Thunder Bay (City of Thunder Bay, 2012[19]). Strengthening understanding between the Indigenous and non-Indigenous communities has been identified as a key action to foster well-being in the city. The strategy was developed through formal and informal gatherings with the local Indigenous community, including leaders, administrators, service providers, community groups, elders, youth and community members. Through focused discussions, the City Council has identified the key roles it will play as part of the strategy:

  • Leader, to demonstrate the commitment to work closely with the Indigenous community;

  • Partner, to support and recognise the work of the Indigenous community by sharing expert knowledge, information, resources and establishing partnerships;

  • Employer, to build a workforce which is reflective of the city’s characteristics;

  • Service Provider, to increase Indigenous participation in municipal services and programmes.

One of the priorities outlined in the Strategy’s action plan is a focus on the city’s role as an employer of Indigenous people. To do so, the city plans to develop culturally sensitive and specific recruitment materials to market working at the city to Indigenous communities as well internship programmes to provide work experience opportunities. The City Council also outlines the importance of cultural sensitivity training to all new employees as part of their orientation.

The Aboriginal Liaison Strategy is be reviewed each year, to identify the areas of focus for the coming year and the financial support required. Indicators of success have been identified as improvements to Statistics Canada numbers (employment, education, homelessness, poverty); increased participation by the Indigenous community in City services and programmes; Indigenous people becoming more engaged in municipal politics and governance (boards and committees); feeling welcomed and respected; more and on-going involvement with Mayor, Council and Administration and seeing Indigenous people being positively represented in the community.

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Box 3.4. Mayor’s Indigenous Advisory Circle in Winnipeg

In 2015, the Mayor of the City of Winnipeg, Canada, announced the establishment of a Mayor’s Indigenous Advisory Circle (MIAC) (OECD, 2018[20]). The role of the MIAC is to advise on policies the City of Winnipeg can implement to further build awareness, bridges and understanding between the Indigenous and non-Indigenous communities. Meetings of the Advisory Circle are held quarterly and members include Indigenous elders, First Nation Chiefs, as well as members from the education and university sectors, and Aboriginal Chamber of Commerce.

A key achievement of the MIAC is the Indigenous Accord, which was adopted by City Council on March 22, 2017 (City of Winnipeg, 2019[21]). The Indigenous Accord is conceived as a living document that should guide the shared commitment to reconciliation in Winnipeg. It outlines a vision of reconciliation as well as a series of important commitments and principles. Accord signatories agree to report the success of their commitment to reconciliation and their future goals annually.

A key objective of the Accord is to establish local partnerships, start new initiatives and engage local players. Several local organisations have signed the accord over the last years, committing to advancing reconciliation in Winnipeg and embracing a respectful relationship with Indigenous communities. These include among others the Royal Winnipeg Ballet, CentrePort Canada, Investors Group, the Manitoba Museum and the Manitoba College of Social Workers.

The MIAC also played an important advisory role in declaring 2016 the Year of Reconciliation, implementing the Truth and Reconciliation Commission’s calls to action, and collaborating to develop Winnipeg’s Urban Indigenous Accord.

Source: OECD (2018), Indigenous Employment and Skills Strategies in Canada, OECD Reviews on Local Job Creation, OECD Publishing, Paris, https://dx.doi.org/10.1787/9789264300477-en.; City of Winnipeg, (2019), Winnipeg’s Indigenous Accord, https://www.winnipeg.ca/indigenous/wia/default.stm.

Lessons from New Zealand

The City Council of Christchurch, New Zealand, has adopted a Multicultural Strategy, which aims to foster inclusion, participation and access to public life of all minorities in the city, including Indigenous Peoples (Christchurch City Council, 2017[22]). The Strategy was developed in partnership with leaders from the local communities. A Multicultural Working Group, composed of elected members and community representatives, was established in mid-2015 to discuss strategic priorities.

The Strategy is built around four overarching principles/goals: 1) the Christchurch City Council is an inclusive and diverse organisation which reflects, understands and responds to the diversity of individuals and communities it serves; 2) all communities have equitable access to Council services and resources; 3) all residents are able to participate in Council decision-making; and 4) Christchurch is a city of cultural vibrancy, diversity, inclusion and connection.

The Multicultural Strategy builds on the City Council’s strategic approach, which includes: promoting the diversity of cultures and languages in the city through its libraries; celebrating cultures through local and citywide cultural events promoting the diversity of Ōtautahi/Christchurch people; funding that supports diverse communities' social connections, cultural celebrations, and reduce barriers to participation in all aspects of city life; promoting diversity in the workplace by providing diversity training to its employees; and empowering communities through community development work.

The City Council, in consultation with the community, has developed a five-year implementation plan including the priority actions and other actions as identified. The plan includes targets and indicators to measure success. Implementation of the plan commenced in 2017.

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Box 3.5. Independent Māori Statutory Board in Auckland

The Independent Māori Statutory Board is an independent body corporate of nine members based in Auckland, New Zealand (Independent Māori Statutory Board, n.d.[23]). The Board has specific responsibilities and powers under the Local Government (Auckland Council) Amendment Act 2010 to promote issues of significance to Māori to the Auckland Council. It provides direction and guidance to the Auckland Council on issues affecting Māori to help improve council responsiveness. The Board also ensures that Auckland Council acts in accordance with statutory provisions relating to the Treaty of Waitangi (Te Tiriti o Waitangi) and works more broadly to advance Māori interests in Auckland.

Two Board members sit, with voting rights, on each of the council’s committees that deal with the management and stewardship of natural and physical resources. Specifically, the Board is appointed to the following council committees: Finance and Performance Committee; Planning Committee; Environment and Community Committee; Community Development Committee; Audit and Risk Committee; Regulatory Committee; Civil Defence and Emergency Management Committee; Auckland Domain Committee. The Board meets at least six times a year and is supported by a Secretariat.

Source: Independent Māori Statutory Board, (n.d.), About us, https://www.imsb.maori.nz/about-us/introduction/

Promoting local entrepreneurship opportunities for Indigenous Australians

Lessons from Canada

In an effort to provide Indigenous people with the skills needed to succeed in starting and developing a business, the Government, universities and other institutions have introduced targeted programmes d in Canada such as:

  • The Indigenous Community Futures Development Corporations, a community-driven, economic development initiative assisting communities in Canada to develop and implement strategies for dealing with a changing economic environment (OECD, 2019[24]). The Community Futures network consists of 267 non-profit Community Futures Development Corporations (CFDCs) across Canada (Community Futures Canada, n.d.[25]). It provides small business services such as loans, tools, training and information for people looking to start a business (OECD, 2019[24]). Some CFDCs are located in Indigenous communities and are Indigenous-run, offering services targeted to the specific needs of the local community. Indigenous CFDCs are funded by the Regional Development Agencies;

  • Indigenous Services Canada - Aboriginal Business and Entrepreneurship Development (ABED), supporting Indigenous entrepreneurs in activities such as: business planning, acquisitions and expansions; marketing initiatives that are local, domestic or export-oriented; new product or process development; technology adoption; financial services; and business-related training and mentoring services (OECD, 2019[24]). The ABED programme is delivered on behalf of the Government of Canada by Aboriginal Financial Institutions (AFIs), located in all regions of the country. AFIs are responsible for the management, distribution and administration of an equity fund and have the authority to approve funding for activities up to a maximum of CAD 99 999 for Aboriginal individuals and incorporated businesses and up to CAD 250 000 for community-owned businesses (Indigenous Services Canada, 2013[26]);

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Box 3.6. The Aboriginal Canadian Entrepreneurs programme

The Aboriginal Canadian Entrepreneurs (ACE) programme aims to help Indigenous entrepreneurs launch their business ideas by providing classroom learning, tailored mentorship and apprenticeship experiences (The University of Victoria Gustavson School of Business and Tribal Resources Investment Corporation, 2019[27]). The programme was developed through a partnership between the University of Victoria’s Gustavson School of Business and Tribal Resources Investment Corporation (TRICORP). The programme aims to bring the educational course to the students’ local community, making it more accessible to students, who no longer need to travel to the university. The entire programme incorporates Indigenous culture and traditions together with lessons on business practices.

The ACE Program is delivered over a number of weeks providing entrepreneurs with courses, mentorship and practical entrepreneurial experience. As part of the programme, students participate in basic entrepreneurial courses, 16 two-day workshops and 16 weeks of mentorship and coaching. This project-based programme allows students to learn through experience and close guidance from a business mentor. As of March 2019, the programme boasts of having: 275 Indigenous graduating entrepreneurs; 72 new businesses started; participation in 26 Indigenous communities; 11 700 hours of teaching and one-on-one mentorship; 128 students with completed business plans and looking for funding; and 18 completed cohorts.

Source: The University of Victoria Gustavson School of Business and Tribal Resources Investment Corporation, (2019), Aboriginal Canadian Entrepreneurs, https://iamace.ca/

Lessons from New Zealand

The Māori Business Growth Support programme assists the establishment and growth of Māori businesses by providing information, advice and networking opportunities to Māori entrepreneurs (Te Puni Kōkiri, n.d.[28]). The programme is run by Te Puni Kōkiri, the Ministry for Māori Development.

Applicants submit a description of their business or business idea to the nearest regional office, where they are asked to specify the challenge they want to tackle, outlining the barriers and support they believe they need to grow their business. After an assessment, eligible businesses receive support through three main channels:

  • Information provision and networking, including business fundamentals guidance, online resources, navigation of the business ecosystem, training material and information on courses available;

  • Business growth assessment and planning, comprising analysis of business capability and needs, development of a business growth plan, advice and guidance on the implementation of the plan, relationship maintenance and monitoring of progress towards implementing the plan;

  • Business support services, by supporting clients develop applications for investment to access business support services, providing investment to contribute to the cost of business support services from private providers, and monitoring the effectiveness and impact of the services received.

In addition, the programme web page redirects to other government web pages providing information on how to start and run a business, as well as obtain nationally recognised business qualifications. Te Puni Kōkiri works in partnership with other agencies providing business support services for Māori businesses. It also helps Māori entrepreneurs access support provided by other entities, such as:

  • Poutama Trust, an independent charitable trust established in 1988 to provide advisory support for business investigation, training and growth;

  • Māori Women’s Development Inc, providing low interest loans for Māori women entrepreneurs, as well as training programmes and information sharing;

  • Te Tumu Paeroa, offering land management services and training programmes for Māori land trustees, including financial literacy courses;

  • The Māori Innovation Fund, providing funding to help Māori people get the skills and knowledge needed to realise their economic potential.

Lessons from the Barents Euro-Arctic co-operation region

The Indigenous Entrepreneurship (Indigee) project was developed by the International Barents Secretariat (IBS) to provide support and advice to Indigenous Peoples with established enterprises or business ideas closely related to Indigenous cultures and traditions in the Barents Euro-Arctic Cooperation region (Barents Euro-Arctic Cooperation, 2019[29]). It involved Indigenous Peoples, including Saami, Nenets, Veps and Komi communities, from Norway, Sweden, Finland and Russia, aiming to support and provide advice.

As part of the project, three working groups were created: a group for people without previous business experience, a second for those who already had a business idea and a third for people with established entrepreneurs. Within each working group, participants were offered seminars as well as individual counselling. The project also included home assignments, the participation in business fairs and a final contest where a winner was selected by local entrepreneurs and received a financial reward. Participants of the first two working groups were encouraged to “upgrade” to the more advanced group once they advanced in the development of their business idea.

The first Indigenous Entrepreneurship project took place from 2010-2012 and reported positive results. 26% of the participants reported increased income or results after participating in the project, 27% had registered a new enterprise and 36% reported that they started selling a new product or service thanks to the project. A second Indigenous Entrepreneurship project lasted until June 2014, and proved to be more successful than the first one. 47% of participants reported an increase in income as a result of participation in the project, 57% started to sell new products, 47% launched a cross-border business co-operation and 69% had set up a business co-operation with another participant.

References

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Chapter 3. Fostering Indigenous job creation in urban areas