Indigenous businesses are a thriving and dynamic sector of the Australian economy. Recent research highlights their significant contribution, with 13,693 businesses generating a staggering $16.1 billion in revenue, employing over 116,795 individuals and contributing $4.2 billion in wages.
However, a critical gap exists in how we value these businesses. Traditional valuation methods often fail to capture the unique essence of Indigenous enterprises.
Indigenous Businesses
For over a decade, government initiatives and discussions around supplier diversity have focused on encouraging Indigenous procurement. While these efforts are commendable, they often overlook a fundamental truth: Indigenous businesses are fundamentally different from their mainstream counterparts.
Indigenous businesses are deeply rooted in cultural values that prioritise community, reciprocity, and connection to the land. These values are often not reflected in traditional business models focused solely on profit maximization. Recognizing and valuing these unique aspects is crucial for a more holistic understanding of Indigenous businesses.
The Australian Government’s Commitment
The Australian Government’s Indigenous Procurement Policy recognizes the distinct nature of Indigenous businesses. This policy mandates government buyers to actively seek out and engage with Indigenous businesses for specific procurements:
- All work delivered in remote areas
- Contracts valued between $80,000 and $200,000 (GST inclusive) delivered entirely within Australia
In these cases, government buyers must:
- Utilize Supply Nation’s directory – a valuable resource for identifying qualified Indigenous businesses.
- Determine if an Indigenous business can provide the required good or service at a competitive price.
- If a suitable Indigenous business is identified, the purchase must be made from them.
The policy also allows Australian government organizations to directly purchase from Indigenous SMEs for contracts valued up to $500,000 (GST inclusive).
Moving Forward
Valuing Indigenous businesses requires a multifaceted approach. While traditional financial metrics remain important, we must also acknowledge and consider the cultural values that set them apart. Recognizing the unique strengths and contributions of Indigenous businesses is vital not only for their success but also for fostering a more diverse and equitable Australian economy.
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Insight Advisory Group
