manley a. begay, jr. native nations institute (university of arizona) and

Tribal-Citizen Entrepreneurship What Does It Mean for Indian Country and How Can Native Nations Support It?

Manley A. Begay, Jr. Native Nations Institute (University of Arizona) and Harvard Project on American Indian Economic Development

Association of Cooperative Educators ConferenceHotel DepotMinneapolis, MinnesotaJuly 29, 2009

American Indian Economies(Reservation and Trust Lands)

Transfer Sector Productive Sector

Nation-owned enterprises Citizen entrepreneurship (private sector)

…and Non-governmental/Non-profit sector

American Indian Economies(Reservation and Trust Lands)

In general, the transfer sector is shrinking; the productive sector is growing

Within the productive sector, emphasis has been on nation-owned enterprises

The Indigenous Private Sector is Growing Census Bureau estimates of Indigenous-owned

firms 1997: 197,300 (includes nation-owned enterprises) 2002: 206,125 (excludes nation-owned enterprises)

But these businesses have been overwhelmingly urban

That’s beginning to change…

Why Does This Matter?

What Is Tribal-Citizen Entrepreneurship?

Businesses started and owned by tribal citizens—individuals or families—on the

nation’s own lands

What Citizen Entrepreneurship Does

1. Generates jobs2. Builds reservation wealth3. Increases reservation multipliers4. Helps build a tax base5. Diversifies the nation economy6. Sends important signals to citizens7. Retains talent locally8. Improves the quality of life9. Broadens the development effort10. Strengthens tribal sovereignty

The “Thick” Economy of a Strong Native Nation

The nation’s people, society,

& culture

Nation-Owned Enterprises

MinesFactories

Land EnterprisesForestry

Wildlife RecreationFisheryCasinoResortBank

Industrial ParkUtilities

Shopping Mall???

Citizen-Owned Enterprises

GroceryAuto RepairHardwareClothing

Ranching/FarmingCar Dealer

Computer ServicesBuilding Contractors

RestaurantsArts/Crafts CooperativeLawyers/AccountantsDentists/Doctors/Vets

InsuranceOffice Supply

???

So Why Don’t We Have More of It?

Obstacles Shared with other rural settings

Limited markets Limited opportunities Limited financing Limited skills and training

Distinctive to much of Indian Country Cultural concerns The governance environment

Cultural Concerns (in some cases) Fit with Indigenous values (for example,

some nations are less tolerant than others of individual entrepreneurship)

Questions about appropriate uses of nation resources

In some cases, a culture of dependency that has sapped individual initiative

(For outsiders) Strong community commitments on the part of entrepreneurs

The Governance Environment (in some cases) Lack of institutions that are taken for granted

in other settings (independent courts, commercial codes, zoning, etc.)

Political interference in business permitting, site leases, nation court decisions, etc.

Overly complex regulatory regimes Slow or culturally inappropriate or

dysfunctional bureaucracies Lack of infrastructure

Results

Instability and unpredictability Higher business costs Exit

Case 1 – Big Nation Need and Opportunity

high unemployment large internal market but relatively few

on-rez businesses many would-be entrepreneurs but most dollars spent off-rez fit with Indigenous values


high unemployment large internal market but relatively few on-rez businesses many would-be entrepreneurs but most dollars spent off-rez fit with Indigenous values

Governance Problem most land is nation-held, but nation site-

leasing process has more than 100 steps and on average takes more than a year to complete

in a nearby, off-rez city, a new business can be up and running in less than 30 days


high unemployment large internal market but relatively few on-rez businesses many would-be entrepreneurs but most dollars spent off-rez fit with Indigenous values

Governance Problem most land is nation held, but nation site-leasing process has more than

100 steps and on average takes more than a year to complete in a nearby, off-rez city, a new business can be up and running in less

than 30 days

Results massive brain drain as young people with

ideas and energy go somewhere else hundreds of jobs lost

Case 2 – High Plains Nation Need and Opportunity

major social problems including extreme unemployment

multiple communities that need to buy goods

significant tourism possibilities determined and committed entrepreneurs cultural support for entrepreneurship


major social problems including extreme unemployment

multiple communities that need to buy goods significant tourism possibilities determined and committed entrepreneurs cultural support for entrepreneurship

Governance Problem politicized business permitting system politicized nation court nation legislature efforts to raise cash

through increased site-lease rates


major social problems including extreme unemployment multiple communities that need to buy goods significant tourism possibilities determined and committed entrepreneurs cultural support for entrepreneurship

Governance Problem politicized business permitting system politicized nation court council efforts to raise cash through increased site-lease rates

Results high business start-up costs, political game-playing a struggling entrepreneurial sector that could thrive

under changed conditions but also an organized effort by entrepreneurs to

support each other and promote constitutional reform

Case 3 – Lake Nation Need and Opportunity

lack of on-rez retail sector high dependence on gaming for jobs,

revenue substantial gaming revenue


lack of on-rez retail sector high dependence on gaming for jobs, revenue substantial gaming revenue

Governance Response nation uses gaming revenue to support

entrepreneurship nation provides training, technical

assistance, and low-interest loans to would-be entrepreneurs

loan access depends on passing strict business tests

politics kept out of loan decisions


lack of on-rez retail sector high dependence on gaming for jobs, revenue substantial gaming revenue

Governance Response nation uses gaming revenue to support entrepreneurship nation provides training, technical assistance, and low-interest loans to

would-be entrepreneurs loan access depends on passing strict business tests politics kept out of loan decisions

Results more than thirty new businesses in first four

years, with high survival rate reduced costs jobs, services, pride

So How Do You Increase Tribal-Citizen

Entrepreneurship?

What Indigenous Nations Can Do Attitudinal Changes

Sovereignty mind-set Strategic thinking

Investments Small business services (such as education, technical advice) Financing Strategic planning

Institutional Changes A capable nation bureaucracy A sensible regulatory environment A commercial code A genuinely independent nation court

Key Questions To Indigenous Nations Do you want to include citizen entrepreneurship

in your development strategy? Will the community benefit from and tolerate

citizen entrepreneurship? Do you have a governmental structure in place

that will support—not penalize—citizen entrepreneurship?

American Indian Economies

Nation-owned Enterprises

For some Native nations, nation-owned enterprises may be all the development strategy they need or desire


Nation-owned Enterprises

Citizen Entrepreneurship

But for others, citizen entrepreneurship can be a key building block in a sustainable Indigenous economy


Nation-Owned Enterprises

Citizen Entrepreneurship

And for others, nation-owned enterprises, citizen entrepreneurship, and non-governmental/non-profit sector can be the building blocks in a sustainable Indigenous economy

Non-ProfitSector

But if the second and latter strategies are selected, then nation government carries much of the responsibility for making the strategy work…

…by putting in place an environment of stable rules and other supports that encourages citizens to invest time and energy at home.

manley a. begay, jr. native nations institute (university of arizona) and

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