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Risky business: the problems of Indigenous business policy

Charles Jacobs
29 November 2017 | RR35
Risky business:  the problems of Indigenous business policy

The Commonwealth’s Indigenous Procurement Policy (IPP) has put Aboriginal owned small businesses at the heart of a renewed approach to Indigenous economic development. The IPP has irrevocably changed the space, and the Indigenous business sector has grown exponentially since its introduction in 2015. While the policy has achieved its targets, there are some issues with its structure – namely, the way success is measured and figures can be manipulated. Its impact on open market tendering must also be questioned. It is also clear that the impact of Government procurement is limited to certain industries, and purchasing requirements are relatively narrow.

However, the impact of IPP extends beyond portfolio targets. The policy is helping to play a role in promoting change and improving people’s attitudes towards Indigenous business. The Commonwealth and some of the biggest companies in Australia are pushing a cultural shift that is developing into a genuine market force. Due to the IPP there is a growing commercial interest from the private sector to partner with Indigenous businesses. Such relationships are mutually beneficial, with joint venture partnerships offering the opportunity for small Indigenous businesses to get into the market and develop their skills, while the non-Indigenous partner gains a competitive advantage.

 

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