Economic development for remote Indigenous communities cannot be understood unless the relative importance of customary activity, potentially enhanced by native title legal rights in resources, is recognised. The present article uses a three‐sector hybrid economy framework, rather than the usual two‐sector private (or market) and public (or state) model to more accurately depict the Indigenous economy. Examples are provided of the actual and potential significance of the customary sector of the hybrid economy. Focusing on the concepts of property and institutions, it is demonstrated that significant local, regional, and national benefits are generated by the Indigenous hybrid economy. A role is foreshadowed for resource economists and the New Institutional Economics in quantifying these benefits, including positive externalities, so that they might be more actively supported by the state.