manley a. begay, jr. native nations institute (university of arizona) and
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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 Conference - PowerPoint PPT PresentationTRANSCRIPT
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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
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American Indian Economies(Reservation and Trust Lands)
Transfer Sector Productive Sector
Nation-owned enterprises Citizen entrepreneurship (private sector)
…and Non-governmental/Non-profit sector
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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
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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?
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What Is Tribal-Citizen Entrepreneurship?
Businesses started and owned by tribal citizens—individuals or families—on the
nation’s own lands
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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
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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
???
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So Why Don’t We Have More of It?
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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
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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
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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
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Results
Instability and unpredictability Higher business costs Exit
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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
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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
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
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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
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
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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
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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
Governance Problem politicized business permitting system politicized nation court nation legislature efforts to raise cash
through increased site-lease rates
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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
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
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Case 3 – Lake Nation Need and Opportunity
lack of on-rez retail sector high dependence on gaming for jobs,
revenue substantial gaming revenue
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Case 3 – Lake Nation Need and Opportunity
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
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Case 3 – Lake Nation Need and Opportunity
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
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So How Do You Increase Tribal-Citizen
Entrepreneurship?
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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
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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?
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American Indian Economies
Nation-owned Enterprises
For some Native nations, nation-owned enterprises may be all the development strategy they need or desire
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American Indian Economies
Nation-owned Enterprises
Citizen Entrepreneurship
But for others, citizen entrepreneurship can be a key building block in a sustainable Indigenous economy
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American Indian Economies
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
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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.