Tribal Strength Through Economic Diversification
The potential impacts of Internet gaming legalization was a major topic at last month’s National Indian Gaming Association (NIGA) convention. Another critical topic, not surprisingly, was economic diversification and Tribes’ ability to pursue and manage the process of planning for change.
Legalization of online gaming is gaining traction; a few states already have passed legislation allowing it. Should this trend continue, it has been estimated that Indian gaming revenues could take a hit of up to 25 percent. This would be disastrous for many Tribal communities whose economies are built upon gaming revenue as their sole economic pillar.
If there is a bright side to the potential challenges in the gaming industry, it is that many progressive, forward-thinking Tribal leaders have been planning for this day. As sovereign governments, Tribes must work to ensure a steady stream of revenues to fund services and provide for the well being of their communities and citizens for generations to come. Recognizing that there are potential declines in gaming returns, Tribes have prioritized economic diversification. Several tribes around the country have made disciplined steps to reach their future goals of having a diverse portfolio of economic initiatives to balance out their revenue opportunities for the future.
However, diversification and strategic planning is not a simple process. Successfully growing and diversifying Tribal economies requires leaders to engage in critical deliberations about what kind of society they have now and what they’re trying to build for the future. This often seems like quite a long-term task, one that might involve extensive polling of community members and internal political disagreements along the way. It doesn’t have to be. Initial, half-hour discussions between Tribal leaders and Blue Stone Strategy Group have often led to strategic plans that include a thoughtful, community-centered vision and a starting point for moving forward with economic diversification initiatives. It is important to start somewhere.
Tribes should have a solid grasp on economic and social priorities early on in their diversification plan. Asking questions such as, Is my Tribal government prepared to be self-reliant? and, Is our current and next generation of leadership equipped to manage growth? can help formulate those priorities.
With federal budget cuts already impacting Indian country, it’s especially valuable to know if a current economic structure is as strong as possible. Lummi Councilman Henry Cagey is a member of our Blue Stone advisory board. He knows that Tribal governments are only as strong as their weakest link. It’s important to identify those links, he says, but it’s just as important to understand the chain. Setting and reaching goals is most meaningful when there is a clear understanding of the Tribe’s whole environment, including strengths and weaknesses as well as challenges and opportunities.
Take Tribes that are currently dependent on gaming. They may choose to take a gradual course to diversification, expanding into enterprises that leverage and complement their casinos. Tribes focusing on hospitality projects such as lodging or entertainment options provide healthy examples of diversification in areas where there is already a well-developed tribal knowledge base.
At the same time, Tribes must assist and encourage development of entrepreneurship and small business by their tribal members. Financial literacy, micro-lending and basic accounting skills stand out as critical needs. Helping community members become more efficient and successful with running their own businesses through education is what we call a best practice opportunity for a Tribal government. This type of support strengthens individuals as well as the Tribe’s future workforce, while at the same time reducing the dependence on the government to be the only business owner. This is “understanding the chain.” Diversifying the Tribe’s role in the tribal business chain is truly building an economy.
Are Tribes ready to bear the impact of a shifting economy, to mitigate turmoil and manage transition? Chairman W. Ron Allen, a Blue Stone board advisor, is looking at the big picture. “Indian Country has grown through its own resourcefulness, driven by survival and adjustment,” he says. “Today, economic diversification represents a new way to adjust and not only survive, but thrive.”
Self-reliance is the ultimate goal for most Tribes, and for many it’s steadily becoming reality. Creating sustainable Tribal governments, supporting the tribal private sector and building policies that uphold cultural ways and reflect the needs of the people may sound like a tall order, but with a proper strategy, it becomes achievable.
Jamie Fullmer (Yavapai-Apache Nation) is chairman and CEO of Blue Stone Strategy Group.