From frybread making to construction work, why it’s difficult to start and grow a business on the Navajo Nation
New research shows that it is more difficult for a business owner to access land, get a new electrical connection, or enforce contracts on the Navajo Nation than almost anywhere else in the world. The findings were published in a late June in a new report, “Doing Business on the Navajo Nation.” Change Labs and economic evaluation firm, Causal Design, in Washington DC conducted the research using the World Bank’s “Doing Business” methodology, an analysis that measures the business environment and breaks down which regulations and policies support business growth and which constrain it in 190 countries across the globe. It is used by policy makers around the world to guide how they can create more economic opportunities in their communities.
Research highlights
The report highlights several key findings based on analysis of two hubs of economic activity on the Navajo Nation -- Tuba City, AZ and Shiprock, NM -- with Cortez, CO as a point of comparison, including:
Accessing land on the Navajo Nation requires 4 times as many procedures, resulting in a process that is 6 times as long and 1.3 times more expensive than accessing land in Cortez. Additionally, the land administration system on Navajo is significantly less transparent than in Cortez.
Getting electricity on Navajo requires 2 fewer steps than in Cortez, but it takes 6.5 times as long and is 4 times as expensive. In terms of quality, the average Navajo Tribal Utility Authority customer does not experience a higher frequency of power outages than a customer of the Cortez utility provider, but when an outage does occur, it takes 90 times longer to resolve on Navajo than Cortez.
Resolving a commercial dispute takes almost two full years on Navajo. The time length of trials exacerbates the cost of a trial, especially with respect to attorney fees, to be upwards of 85 percent of the claim value.
“We cannot change what we cannot measure,” says Jessica Stago, co-founder of Change Labs. “With this data we’ve established a benchmark for improving the business environment on the Navajo Nation.”
“Now that we have the problem defined, we can begin to explore new partnerships and new solutions to address the problem,” says Change Labs Executive Director Heather Fleming. “Our goal at Change Labs is to help move the Navajo Nation from one of the worst places in the world to do business to one of the most exciting places to be a Native American entrepreneur.”
Why the Navajo Nation
According to US Census Data, poverty rates on the Navajo Nation (38%) are more than twice as high as poverty rates in the state of Arizona (15%). According to former Navajo Nation President Russell Begaye, the unemployment rate on the Nation was as high as 50% in 2016, compared to a national rate of 4.7% that same year. The Change Labs business incubator and shared work space for entrepreneurs on the Navajo and Hopi Nations works closely with small businesses owners who struggle to start and grow their business in tribal communities. With a more comprehensive understanding of which aspects of the Navajo business environment present the largest challenges for tribal business owners, this research can serve as a policy tool for tribal council members, members at the Division of Economic Development, and tribal leaders across the Nation who already work to support Navajo communities so that they can create data-driven policies that support entrepreneurship and economic growth within Navajo communities.
To learn more about the research and download the full report, visit http://nativestartup.org/doingbusiness
