Accessibility links

For US Indians, Business Boom in the Works - 2004-09-26

The tens of thousands of Native Americans who gathered last week in Washington D.C. to mark the opening of the National Museum of the American Indian were in high spirits as they celebrated their enduring tribal cultures. But back home, in Indian Country, life remains tough. Unemployment and poverty rates on reservations soar above those for non-natives. And Native Americans own far fewer businesses than other minority groups in the United States.

Vaughan Sunday grew up on the Akwesasne Mohawk reservation, on the St. Lawrence River and the Canadian border in northern New York State. He's middle aged, and when he was young, life in Akwesasne was still based on subsistence. People fished, hunted, grew corn and vegetables in a garden. But all that changed when nearby factories polluted the land and water. "You could no longer eat the fish. You couldn't drink the water out of the river. So right now we're just like any other economy where you have to go out and get a job and come home with some money for your family," he says.

Few Mohawks got jobs at the industrial plants. Many traveled to New York City to become ironworkers.

When it came to starting their own businesses, Mohawk entrepreneurs hit a wall. They couldn't get money. The reservation, also known as "First Nation land," is sovereign territory. Sunday says banks have no legal rights there. Therefore, there's no collateral. "So what that means is, a bank cannot give an entrepreneur on a First Nation a loan and take the land and the building as collateral. It makes it far more difficult in a First Nation than on the outside to start a business," he says.

Statistics on minority-owned businesses nationwide bear this out. In 1997, Hispanics, Asian-Americans and African-Americans each owned between 4 and 6 percent of all firms in the United States. Native Americans owned less than 1 percent of all businesses.

In the seven years since, though, the number of native-owned businesses has grown by 84 percent as tribes have launched programs to help their members gain access to venture capital.

Missy King flips a burger in her shiny new kitchen at King's Marina. It's set in a stunning bay where the Snye and St. Regis Rivers meet the wide St. Lawrence. She's got new docks outside and plans for a bigger parking lot. Business is booming with boaters from as far away as Ottawa, and Montreal. "People that came from Saranac Lake that come over. They actually bring their boat here to go fish. I guess everyone comes here for our smiling faces," she says.

King does have a beaming smile. But she credits a tribal entrepreneur training program for her business' growth. "Making the business plan was hard. I had to have a lot of help for that, but once we got the loan, making everything balance out, that's what was hard," she says.

The program includes access to a loan fund, so Mohawk businesspeople can get the capital they couldn't get from a non-native bank.

Vaughan Sunday directs the program. He says half of the 60 students who have taken the class have started businesses, and it's propping up the Akwesasne economy. "We've seen marinas, we've seen construction companies, we've seen crafts development, we've seen retail stores," he says.

Entrepreneur programs like the Mohawks' are popping up across Indian Country. They're creating a foundation for economic growth.

"In a lot of those places, the beginning of an economic base is starting to happen," says Lester Tsosie, who directs a small business program for the Southwestern Indian Polytechnic Institute in Albuquerque, New Mexico. He travels to the 100 poorest reservations to train entrepreneurs. Mr. Tsosie says Indians still face daunting obstacles. Poor roads and communications. Few chambers of commerce. Only a quarter of all tribes have some form of loan or equity fund. Mr. Tsosie says there's also a lack of business training. Many native people grew up in traditional, subsistence economies. "I grew up in the Navajo Nation. My parents of course are very traditional people. A lot of the interaction back then was bartering, like during the fall, harvesting corn and pitching in for different ceremonies that we had. But there was really no exposure that I had to finances and money during that time," he says.

Tsosie says the best entrepreneur programs couple business training with access to financial capital. The goals are the same: to make Indian Country more economically self-sufficient. That's what's been happening on the Standing Rock Sioux reservation in North and South Dakota. Travis Nabahe directs the tribe's two-year old business equity loan fund. He says tribal members are starting to buy up businesses that have been owned by non-natives. "Probably 90% of all the business payroll flows off the reservation and so what we're trying to do is shift that to where more of the dollars will be retained and circulate within the reservation," he says.

The U.S. Department of the Treasury is taking notice of the economic renaissance in Native America, calling it a "domestic emerging market." It reports sales by native-owned firms are growing at double the rate of the U.S. average. And native business creation is 7 times the national average.

Back at King's Marina, Missy King is seeing the growth in her own enterprise, and she's constantly expanding her business plan to keep up with it. "Like they say, keep up with the Joneses and that's basically what we have to do, keep up with the Joneses. We have competition on the left of us and competition on the right of us and we've got to try to stay ahead of the ballgame here," she says.