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FEBRUARY 8, 2001

A report released on Wednesday tackles the subject of economic development in Indian Country, hoping to explain why entrepreneurial activity on reservations is much lower than the rest of the country.

In "Global Entrepreneurship Monitor (GEM) 2000 National Entrepreneurship Assessment for the United States of America," researchers from Babson College in Massachusetts and the Kauffman Center for Entrepreneurial Leadership in New York examine some of the complex issues faced by more than 550 tribes in the nation. They cite a number of obstacles face Native Americans who want to start their own economic ventures on reservations.

One obstacle is already well-known in Indian Country. While tribal governments can be an ally in expanding economic opportunities through gaming and other developments, they can also be a hindrance, especially when it comes to daily operation of businesses.

The Winnebago Tribe of Nebraska has been recognized nationally for developing its own solution to the issue. Its economic development corporation, Ho-Chunk Inc., has kept tribal politics separate from business decisions although CEO Lance Morgan, a tribal member, says the two can occasionally collide.

But different factors can affect economic development activity taken on by tribes as opposed to ventures started by individual tribal members. Individuals who operate businesses on allotted or trust land don't necessarily face the same governance issues a tribally-owned corporation like Ho-Chunk Inc. might face.

Still, the report does cite other problems shared by tribes and individuals alike. Poor water and electrical systems, substandard housing, inadequate road and transportation systems, and deficient communications networks can hinder successful entrepreneurial activity.

The report also says Indian culture can hinder some economic development. While the researchers say most Americans disagree with the notion that everyone should have the same standard of living, they say tribal cultures place more value on community well-being than personal independence.

"Social norms strongly influence the prevalence, or lack thereof, of start-ups among Native Americans," said Andrew Zacharakis, a Babson College researcher. "Whereas the U.S. as a whole can be considered individualistic with a propensity for independence, Native Americans are more community-oriented."

Zacharakis and the other researchers say improvements in education, especially in early grades, is key to ensuring young Native Americans grow up with an "entrepreneurial mentality." They also say successful Native American entrepreneurs need to become role models to show others in their communities how to kick-start economic development.

"What's important to note is Native Americans across the country are working hard to begin the effort to build entrepreneurial economies in their communities," said S. Michael Camp, project director and director of research at the Kauffman Center. "Now it's just a matter of time before we see substantial improvements."

Relevant Links:
The Kauffman Center for Entrepreneurial Leadership - www.emkf.org/entrepreneurship/vision.cfm

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