Ten years ago, a federal inquiry was held into Indigenous economic development. The findings of Open for Business: Developing Indigenous Enterprises in Australia were resoundingly clear — Australia was lacking supplier diversity. The same businesses were winning contracts and enjoying the spoils, while others equally deserving were unable to get a look in.
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To address this, the government sought out best practices overseas. In the US, the New York-based National Minority Supplier Development Council had been successfully cultivating a more inclusive economy for two decades.
A replica was set up in Australia and initially funded by the federal government as a three-year pilot project. In 2012, the pilot was deemed a success and Supply Nation (formerly the Australian Indigenous Minority Supplier Development Council) began introducing membership fees for its corporate and government members to
Supply Nation’s mission remains the same as when it was founded — to help create a vibrant, prosperous and sustainable Indigenous business sector. It does this by bringing together the biggest national database of Indigenous businesses with the procurement teams of Australia’s leading organisations.
Laura Berry MAICD took over the reins as CEO four years ago, and under her leadership Supply Nation has achieved impressive growth. Membership numbers have doubled, as has annual revenue and the staff headcount in its offices around the country. Perhaps most importantly though, the number of Indigenous businesses registered on the database has increased more than threefold, to 1800-plus. An average of 55 new businesses are registering each month.
Review your procurement policies
Supply Nation CEO Laura Berry MAICD says the full potential of Indigenous businesses is not being realised despite the obvious socioeconomic benefit. She says Supply Nation research shows “for every dollar of revenue, Indigenous businesses produce on average $4.41 of social return and are up to 100 times more likely to employ Indigenous people.”
Berry suggests boards can:
- Raise awareness about the challenges faced by Indigenous businesses and the options for businesses and governments to overcome them.
- Be proactive with initiatives to support and grow Indigenous businesses in your role and industry. Don’t be afraid to start small.
- Use your financial or strategic expertise to assist Indigenous businesses in developing business plans and applying for funding. supplynation.org.au
Develop your RAP
Reconciliation Australia wants the majority of ASX 200 businesses to produce a Reconciliation Action Plan (RAP) and encourages private businesses, multinationals and local government to follow suit. RAPs outline what an organisation commits to do as its contribution to reconciliation. About 1000 RAPs are already in place in Australia, including major listed companies, NFPs and government departments.
Under a RAP, an organisation pledges to take (and measure) actions to build respectful relationships with, and create opportunities for, Indigenous peoples. reconciliation.org.au
Berry believes Australia is making good progress in developing a more inclusive economy. A turning point, she said, was when the federal government launched its Indigenous Procurement Policy (IPP) in 2015. The IPP is a mandatory procurement-connected policy under the legislative instrument of the Commonwealth Procurement Rules, and its purpose is to drive demand for Indigenous goods and services. To date, it has awarded nearly 12,000 contracts to more than 1400 Indigenous businesses at a value of $1.8b.
“We’ve seen enormous growth in Indigenous business development across the country and we’re seeing the market respond to that,” says Berry. “We know that in terms of economic participation, the more Indigenous businesses winning contacts and participating in the economy, the more follow-on effects there are for their families and communities.”
While the rapid growth has been a positive, Berry said that one of her main challenges has been staying true to the mission through periods of change. “Staff turnover is part of a business that is growing and maturing,” says Berry. “I feel as though I’m tweaking our wall chart every few months as new people come on board. It can be quite disruptive for existing staff. Keeping the organisational culture and values front of mind is something that has been very important to me.”
With experience in both government and the corporate sector, Berry says she brings a certain broadness of perspective to the role, as well as those she has held on boards which work in Indigenous tourism and careers.
“I also bring my background as an Indigenous woman, and my knowledge of what’s happening in our communities. I bring that diversity of thought,” she notes.
Berry believes greater progress has been made towards achieving gender balance in Australian boardrooms than cultural and ethnic diversity.
“That diversity has a long way to go and achieving it is probably going to be the next focus for boards around the country,” she says.
“Having people around the boardroom table who reflect the community that a particular organisation is operating in is a very healthy thing. It keeps an organisation relevant and reflective.
But it’s going to take diversity champions and the chairs of boards to actually say that we need to be looking more broadly than just the small circle of mates from private school.”
How Supply Nation works
Supply Nation does not charge Indigenous businesses to be registered on the directory, nor does it charge them to attend meet-the-buyer events and trade shows, which are held in conjunction with the Department of Prime Minister and Cabinet.
The exception is Connect 2019, which was held in Sydney on 8-9 May. This annual Supply Nation event includes a conference with local and international speakers and the nation’s largest Indigenous business trade show.
Each Indigenous business is allocated a relationship manager from Supply Nation, who works with them to identify opportunities with member organisations in their supply chain and carries out business matching.
To maintain the integrity of the offer, Indigenous businesses undergo a rigorous five-step verification process. To be registered, a business is required to have a minimum of 50 per cent Indigenous ownership. Eligible businesses can then elect to be certified, which requires 51 per cent ownership, management and control by Indigenous people.