Integrating Indigenous enterprises into the Australian construction industry

Abstract

Purpose

The purpose of this paper is to explore the barriers to entry for Indigenous businesses into the Australian construction industry.

Design/methodology/approach

A national survey was conducted with 33 Indigenous businesses operating in the Australian construction industry.

Findings

The findings show that Indigenous enterprises face similar challenges to many small non-Indigenous enterprises wishing to enter the industry. These include adjusting to unique construction industry cultures and practices, breaking into existing business networks and building social capital and being under-cut by industry incumbents and competitors when tendering for projects. These barriers are similar to those faced by other non-Indigenous social enterprises, although Indigenous enterprises do appear to experience relatively greater difficulty in starting-up their businesses and in securing sufficient capital, finance and assistance to enable them to scale-up and tender for normal work packages at a competitive price.

Research limitations/implications

The results are limited to Australian Indigenous businesses. The survey does not allow a comparison of non-Indigenous and Indigenous businesses, although comparison of results with existing non-Indigenous research into small to medium-sized firms in construction does allow some tentative insights. These need to be explored further.

Practical implications

These results indicate that there are significant barriers to be addressed within the Australian construction industry if government indigenous procurement policies are to achieve their stated aims of increasing the number of Indigenous firms in the industry. The results also have important implications for Indigenous businesses and for non-Indigenous firms operating in the Australian construction industry.

Social implications

This is an important gap in knowledge to address if countries like Australia are to redress the significant inequalities in income and health suffered by Indigenous populations.

Originality/value

In countries like Australia, with significant Indigenous populations, governments are seeking to address persistent disadvantage by using new social procurement initiatives to create quasi construction markets for Indigenous enterprises to participate in the construction industry. While there is an emerging body of research into the barriers facing mainstream small to medium-sized enterprises and, to a lesser extent, social enterprises in construction, the barriers to entry facing Indigenous construction enterprises have been largely ignored.

Citation

Denny-Smith, G. and Loosemore, M. (2017), "Integrating Indigenous enterprises into the Australian construction industry", Engineering, Construction and Architectural Management, Vol. 24 No. 5, pp. 788-808. https://doi.org/10.1108/ECAM-01-2016-0001