The nation's most comprehensive data project tracking the impact of Indigenous entrepreneurial activity has shown the sector's growing maturity and independence.
Snapshot 4.0 research released on Wednesday highlighted increasing impact of Aboriginal businesses on the Australian economy.
Researchers from the Dilin Duwa Centre for Indigenous Business Leadership partnered the Australian Bureau of Statistics and Indigenous data custodians to track the growth and footprint of Indigenous corporations.
The 2024 report is the most thorough assessment to date of the Indigenous business ecosystem, highlighting its vital role increasing workforce participation and economic empowerment of First Nations people.
Research showed enormous potential of the broad business sector if government policy improved, particularly the national Indigenous Procurement Program.
Dilin Duwa director, Associate Professor Michelle Evans, said the Indigenous corporate environment wasn't "some niche group of small businesses".
"[The sector] employs more Australians than the Commonwealth Bank, NAB and Westpac combined," she said.
The fourth iteration of the Centre's Snapshot captured data from corporations listed on Indigenous registries, self-identifying business owners from the last Census, and Centrelink records, and showed the sector currently employed 135,733 people, with approximately a third of those employees Indigenous (46,718).
While winning contracts via the national IPP led to further growth, research found growth in the sector was not as strong across remote and regional Australia.
Strongly independent First Nations businesses
The 2024 report also found Indigenous businesses were not heavily reliant on the IPP or government contracts.
"The value of contracts won through the IPP represents only 4 per cent of total revenue generated by the sector," report lead author Associate Professor Cain Polidano said.
Since the IPP was implemented, the average annual number of contracts won by Indigenous businesses rose from 3,589 a year between 2007/8 and 2014/5, to 8,197 a year from 2015/16 to 2018/19.
This represented a 21 per cent increase in annual spend during the same period.
An estimated 82 per cent of recipients received their first Commonwealth contract under the IPP, which Professor Evans said had positive flow-on effects for the sector.
"We found businesses that win IPP contracts also often win larger contracts outside of the program," she said.
"This suggests experience gained through contracts awarded within the IPP may lead to an increase in contracts won through open tender processes."
More contracts were awarded to Indigenous businesses via the IPP but they were not being evenly divided across the sector, with the policy's positive impact on Indigenous employment yet to be fully realised.
"60 per cent of working-age Indigenous live in rural and remote areas, but employment rates there are lower than in the city," Professor Evans said.
"If we're going to increase economic empowerment, this is where our efforts need to be focused."
Working-age Indigenous employment rates in rural and remote areas were 54 per cent and 37 per cent respectively, well below 61 per cent representation in urban areas.
More work needed in remote and regional areas
"Our data shows we can't rely on the IPP alone to close the employment gap," Professor Evans said.
Compounding the issue was the sectors IPP contracts were awarded to.
"As it's a government procurement program, it's natural that a large proportion of IPP contracts are in sectors aligned to government work, like administrative, scientific or technical services," Professor Evans said.
"These businesses tend to be in cities, which means more than two-thirds of the value of IPP contracts go to urban areas, generating jobs away from where those opportunities are needed most."
Other data from Snapshot 4.0 showed Indigenous businesses employed 20 per cent of Aboriginals in the workforce, despite those entities representing less than one per cent of total firms trading in Australia.
Indigenous businesses are 12 times more likely to employ Indigenous workers
"We found that across a diverse range of industries, Indigenous businesses are 12 times more likely to employ an Indigenous worker than non-Indigenous businesses," Professor Evans said.
"We show that Indigenous businesses are more inclined to hire Indigenous people, and the jobs and workplaces those businesses cultivate are better suited to Indigenous employees than roles elsewhere."
The research also showed Indigenous businesses were more likely to offer First Nations people full-time and higher-skilled positions than non-Indigenous corporations.
"Two-thirds of the jobs available in the ecosystem are in rural and remote areas, which means more opportunities for Indigenous people to work while living on Country," researchers said.
The federal government committed to increasing the proportion of Indigenous people aged 25 to 64 in employment to 62 per cent under Closing the Gap measures, with current data showing this measure at 55.7 per cent in 2021.
"If we're going to make up the 6.3 percentage points needed to close the gap on employment participation, we need to understand what the economy looks like for Indigenous people looking for work," Professor Evans said.
"We need to encourage job creation in areas that meet the needs of the community."
