By Kate Hennessy
When many Australians think of Indigenous business, they think tourism, the arts or bush tucker. Perhaps national parks, cultural awareness or mining.
It is unlikely that an ergonomic furniture business springs to mind, or a telecommunications company, stationery supplier or manufacturer of high-visibility clothing. Yet all these and more are registered with Supply Nation – an organisation that is busting myths about what Indigenous business looks like.
Since launching as the Australian Indigenous minority supplier office in 2009, the not–for–profit organisation has been linking the supply chains of government and corporate Australia with certified Indigenous companies. Certification is defined as 51% or more Indigenous–owned, though Supply Nation also peers in to ensure the key decision–makers are Indigenous too.
The aim is to close the gap between non–Indigenous and Indigenous Australiansby upping the number of lucrative contracts awarded to the latter – and it is working. In the 2009–2010 financial year, Supply Nation reported $4.04m in contracts awarded to Indigenous business. By 2014–2015, that had jumped to $65.98m.
Furthermore, a SROI report released in September found for every one of those contract dollars, certified suppliers created $4.41 of economic and social value. One of the report’s key findings was: “Indigenous business owners that were part of the stolen generation use their businesses to create a place of belonging and healing.”
While Supply Nation’s core work is about creating economic opportunity, chairperson Leah Armstrong says, it is also kept busy “breaking down misconceptions that Indigenous businesses are just about culture, art and tourism”.
“We educate procurement officers to broaden their minds,” she says. “If they need high–vis workwear, security services or everyday purchases like paper and pens, we have businesses that can supply it. Indigenous businesses are not homogenous or always about culture and community.”
Until 2014, Armstrong was chief executive officer of Reconciliation Australia; before that she worked with a warehouse in Newcastle. “It was Aboriginal and Torres Strait Islander–owned but there was no way to know that. It was just a normal business. It’s up to Indigenous owners to determine where they place their identity in their business ventures.”
For Gerard Ivinson, owner of Ergonomic Workstation Products, that place is in marketing materials angled at buyers who care. “We see ourselves as a business like any other,” Ivinson says. “We look to find an edge and one part of that edge is a great little advantage called Supply Nation. We want to catch the marketplace … of people who want to support Indigenous business.”
On the flipside, he says, it can also dissuade potential customers. “People are very surprised to find an Indigenous business doing our sort of stuff. Some might be sceptical we’re a soft touch company. A small player, a few select clients, not aggressive in the market.” In reality, EWP’s turnover has increased to $1.3m last year from about half of that sum two years ago.
Ivinson is an advocate of Supply Nation but believes it “needs to wave the flag a bit bigger”. He says: “I wasn’t even aware of it until about three months before I joined.” He also suspects tokenism from member companies. “Non-Indigenous business want to support us but I get a feeling some are registering [with Supply Nation] for the sake of it but not doing anything about it.”
Things are changing from high up, however. In July, supply chain diversity got a boost when the federal government added mandatory targets to its Indigenous procurement policy. The policy was released in 2011 but no targets meant no teeth, and it had been falling short of its goals. From a bucket of $39bn per annum of government contract money, just $6m went to Indigenous businesses last year.
Now, government is committed to awarding 3% of contracts to Indigenous businesses by 2020. At a speech at the Victorian Traditional Owner procurement conference this month, assistant minister to the prime minister, Alan Tudge, described the move as “seeking to turbo-boost the indigenous business sector through the use of the government procurement dollar.”
Agencies such as the department of defence and the tax office will be held accountable for their procurement decisions, which will have a flow-on effect to how companies approach government tenders, says Armstrong, because those agencies will be asking: “What are you doing for Indigenous–owned businesses?”
There is a lot of catching up to do. Supply Nation is modelled on the national minority supplier development council (NMSDC) in the United States, established by President Nixon in 1969.The NMSDC has 24 affiliate councils across America with the New York and New Jersey chapter, alone, claiming that billions of dollars are spent with minority businesses each year (Asian, Black, Hispanic and Native-American) through its work identifying minority suppliers and connecting them with major purchasers.
“The US government is today 150 times more successful with procurement from Native American suppliers than we are in Australia with Indigenous procurement,” said assistant minister Tudge in the same speech.
Undaunted by the United States’ four–decade head start, Armstrong is instead inspired by its success. “Our population and scale are not as big but we believe we can achieve that type of growth here too.”
The beauty of mandating minority procurement is that it injects money into disadvantaged communities on their terms, yet requires no extra government funding. “They’re going to award these contracts anyway,” says Armstrong. “This just gives Indigenous–owned businesses the opportunity to compete for them.”
And, according to the department of the prime minister and cabinet, Indigenous business–owners are 100 times more likely to hire an Indigenous employee. This statistic is crucial, given there is a 30% – and growing – gap between Indigenous and non–Indigenous employment.
Though Ivinson bucks the trend, saying he doesn’t give preferential treatment to Indigenous candidates. “We like to create opportunities for other Indigenous people but I’m just as scrupulous as any other person to make sure any employee I hire is not going to ruin my business.”
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