Economic Development in Tribal Communities

Here are some key ovbservations from a recent report on tribal entrepreneurship, commissioned by the Northwest Area Foundation.

Closing the information gap about the state of Native entrepreneurship. There is currently very little quantitative data and corresponding analyses about the state of the private economy on Native reservations and the numbers and characteristics of Native entrepreneurs and their businesses in both rural and urban areas. Not only is there insufficient data, but there is also no centralized, comprehensive resource that provides information on the array of entrepreneurship development services currently available to Native Americans. There is still significant research that needs to take place to effectively “make the case” for the importance of entrepreneurship for Native communities.

Addressing barriers to successful business launch and growth. Nationally, the number of Native individual entrepreneurs has grown significantly in recent years, but in many states, Native individuals still own businesses at a much lower rate per capita than other groups and currently earn less revenue than their non-Native counterparts. Native entrepreneurs face a variety of barriers to successful business launch and growth. While some of these barriers apply to other minority and rural populations, research shows that the barriers such as limited basic infrastructure, remoteness from markets, a lack of an economic base, inexperience with financial and business management, and insufficient business development and financing resources are particularly severe in Native communities.

Characterized by some as “America’s domestic emerging market,” the increased success of some Native businesses, combined with a high demand for financing, training and technical assistance, presents significant opportunities for both investors and service providers alike to meet the needs of this emerging market niche Implementing culturally appropriate strategies. While there is some debate about the cultural relevance of individual entrepreneurship as an appropriate economic development strategy for Native communities, available research and interviews confirm that tribal leaders and Native economic development officials see individual entrepreneurship as compatible with Native culture (past and present) and as a vehicle for tribal economic sovereignty. Underlying this general agreement however is the acknowledgement that Native entrepreneurship development strategies will not succeed without taking into account the differences between Native and non-Native cultures.

Building on effective practices currently underway. The numbers of creative public-private partnerships and Native not-for-profit organizations have increased over the last decade to address the barriers facing Native entrepreneurs and to facilitate community entrepreneurship development strategies. While these are still in their early stages of development and generally not linked to mainstream initiatives, an increasing number of institutions and programs are working to enhance supports for Native entrepreneurs through policy development, education, training and technical assistance, financing, and networking initiatives. These efforts, some of which are documented in this report, can serve as models and resources for tribes and Native organizations nationwide interested in implementing entrepreneurship development strategies in their local communities.

Providing entrepreneur-focused services that are comprehensive and coordinated. This report identifies a set of principles for ensuring that a community has the right climate or culture in which Native entrepreneurs and entrepreneurship can flourish including culturally relevant, entrepreneur-focused, community driven strategies. An effective entrepreneurship development system coordinates a plethora of programs and tailors products to the diverse needs of entrepreneurs, incorporating all of the elements of support for a comprehensive strategy including youth entrepreneurship education, effective training and technical assistance, ready access to appropriate capital, entrepreneur networks, and a supportive policy and cultural environment. Anchor institutions, a supportive public policy, and an information infrastructure are also all essential components of a comprehensive system

Source: Native Entrepreneurship Report, by Northwest Area Foundation