By Lee Egerstrom
There are both perceived benefits and disadvantages to starting and operating a privately owned business from a base on Indian reservation land, but would-be entrepreneurs will most likely find it takes longer to get a business up and running from a reservation.
Those are findings from a survey of business operators on or near reservations conducted over the past year by researchers at the Center for Indian Country Development (CICD), a research unit at the Federal Reserve Bank of Minneapolis.
Results from the CICD survey were released in a Jan. 10 report from D.L. Feir, a CICD research fellow who is also a labor economist and economic historian at University of Victoria in British Columbia. Among her areas of research are economic impacts of policies on Indigenous economics and people.
Dr. Feir’s research project started in 2020 in a collaborative effort of the CICD and the National Center for American Indian Enterprise Development. Based in Mesa, Ariz., it is a nonprofit organization assisting tribes with economic development and promoting Native private business ownership.
The survey findings are an effort to learn about key obstacles to economic development in Indian country, CICD said in releasing the report.
A clear advantage to locating a business on a reservation comes from the Native entrepreneur knowing the area, or thus the market to be served. Another expressed advantage is for the entrepreneur to be close to family and friends.
Among disadvantages expressed by respondents were that markets were often smaller on reservations, they had more limited financing options, and infrastructure problems such as speed and reliability of Internet service hinder business activity.
There were not significant differences in the cost of doing business either on or off the reservation. Respondents generally agreed that sales would be less within the reservation communities.
Such data should help tribal developers and others assess strengths and weaknesses for enterprise development on reservation lands going forward. The Minneapolis Fed and its CICD intends to expand this type of research in the year ahead.
They announced on Jan. 20 that the COVID-19 pandemic and related impacts made clear the need for data collection, analysis and policy initiatives for the tribal nations.
CICD will seek to fill data gaps impacting tribes in the next 12 months and work with tribal governments and “data partners” to fill those voids.
“The lack of data in Indian Country limits our understanding of the economy,” said Neel Kashkari, Minneapolis Fed president. “Strengthening CICD’s capacity for research and data will help tribal leaders and our other partners create meaningful and effective policy.”
Casey Lozar, CICD director and a member of the Confederated Salish and Kootenai Tribes (Flathead Indian Reservation in Montana) said, “The economic potential in Indian Country is vast and untapped, but structural barriers to economic advancement persist.
“This expansion will allow us to make a larger impact on future economic vitality in tribal communities and ensure the economy works for all, including Indian Country.”
The Minneapolis Fed is that regional bank for the Ninth Federal Reserve District that includes the Upper Peninsula of Michigan, northwestern Wisconsin and the states of Minnesota, Montana and North and South Dakota. There are more than 150,000 Native Americans living on or near 45 reservations within the district.
For more information, see: https://www.minneapolisfed.org/article/2022/doing-business-in-indian-country.