When a Bull Market Ends and Inflation Looms, Native Tribes Could Lead the Way!
A tribal government-backed business system, working with private industry, could forge a new chapter of business innovations in America.
By Vince DelaRosa - 06/19/2022
Given current market conditions, we have to cultivate an innovation culture that supports both disruptive and incremental innovation pathways. Given Congress’s inability to move swiftly on anything, an American Indian tribe could prove pivotal here!
Here are four things we should do now:
- Pass massive governmental (state & federal) economic incentives (SSBCI & tax packages) for investments in our own country.
- The Federal Reserve should pursue sound monetary policies. Raising interest rates is not one of those.
- Pass large collaboration incentives, tied to tax packages to stimulate business innovation and acceleration hubs. This should be aimed at wide-spread corporate and university collaborations.
- Infuse capital into tribes, with incentives so they can uniquely build out innovation hubs as platform-driven ecosystems. Tribes are really the third leg of the economic response stool, meaning, federal, states, and tribes.
American business and economic recovery must move in a different direction. A new governmental business model must emerge to become a real facilitator of business instead of an impediment.
What is a Platform-Driven Ecosystem (PDE)?
A PDE model creates value by facilitating business between a tribe, innovators, investors, and other community business interests (i.e., Chambers of Commerce or local units of government). This can be done in a tribal governmental ecosystem. The aim here is to spur economic growth while capturing real value creation.
A PDE model is a tribal government-backed business system that functions more like a leading tech model. A tribal ecosystem places a governmental framework around the performance of the system.
A PDE model limits taxes, sheds some regulations, and enables technology adoption, which includes digital governmental financial attributes. In this manner, the system has active governmental facilitation with real-time speed to market capabilities.
Throughout the country, PDEs can be launched as business innovation hubs. They can be launched independently or in coordination with local units of government.
I have worked with numerous tribes, states, and local governments over the past 30+ years as a former elected tribal official. People across the country desire stronger local economies, but Congress is ill-equipped to respond.
As tribes engage in new economic pursuits, I see opportunities for private industry, investors, and tribes to join forces. The PDE can serve as an economic bridge for local units of government, regional economies, and market investors.
Politics Affect Everything —
America’s politics need to be toned down. We can’t solve economic problems when Congress is unfocused. Tribes, businesspeople, and society have to help ourselves economically. That’s the metro approach: organic growth and partnerships amongst the people.
I recently visited a number of state regions to research the local economies. There are many regions with empty storefronts and leading economic indicators are lagging.
New jobs and creative industry solutions must be developed. Regulations need to be relaxed as innovations need to take center stage, America is falling behind on various levels.
American manufacturing needs to get back online. New production is key; we must start making things here. A consumer-based economy will not elevate our people.
New regional business innovation hubs with tribes can leverage the governing resources of tribes while enhancing collaborations. Tribes are uniquely positioned to harmonize new innovation developments.
TRIBES/REGIONALISM/ “Metro Thinking”
PDE efforts can be focused on building new financial, tech, medical, manufacturing, food, and energy systems. This can cause a wave of innovative pursuits.
The general metro collaboration idea is framed below. It is my belief that we can all work together.
LOCALS & TAXPAYERS BENEFIT: “Working Together”
People living on or near tribal reservations can benefit from business relations with a tribe. Tribes have reach into federal funds, this benefits regional activities. With tribes' federal deal-making and local services are enhanced.
New business relationships can result in better road maintenance, improved law enforcement, new manufacturing jobs, new job training programs, and accelerated depreciation on joint ventures. Local taxpayers can also see lower tax bills when service agreements are realized with tribal partners.
“THIS WORK BUILDS MOMENTUM”
Any of the projects we work on here, will have stronger cap tables. Imagine using the PDE model to reduce capital gains by 50% overall and virtually eliminating corporate taxes.
Here are a few project examples where tribal participation can lead to better results. Venture equity transactions, real estate (1031s, REITs), commercial land developments, and several industrial advances, such as digital currency technologies. These are all areas with a high concentration of employment opportunities, both skilled and entry leveled.
There are also tremendous opportunities to leverage other market forces with a PDE approach. Let’s take the convergence of Latino, African American, Asian, and other outside (trade) business interests here. These efforts can spur economic growth in historically disadvantaged regions.
Other Powerful Market Forces: “8th Largest GDP”
Communities with lower median household income levels are infused with some economic vitality. The magic would be in how we could unlock this and grow it larger.
Take Native American and Latino economic outputs. It is estimated that Native American and Latino financial strength accounts for over $4.5 trillion in domestic annual GDP activity. This is significant. If measured against international economies, these areas would have the 8th largest GDP in the world, ahead of Russia, Canada, Italy, and Brazil.
Think about this financial market activity and how we could magnify this regionally. With some focused effort, we can drive growth. Enhancing a $4.5T pipeline is a worthwhile effort. We could funnel some of this flow into specialized economic programs, bond activities for capital improvements, along with incentivized public policy.
Continuing, the current documented Latino GDP, by itself, is $2.3 trillion. The true market value of this economic output, in just these so-called poorer regions, is possibly north of $5 trillion annually in GDP. The true percentage of just the Latino share of the U.S. GDP was estimated at 12.7% in 2020.
Imagine if this was all orchestrated at a higher level, with supportive public policy and corporate incentives to grow new regional economic enhancements? If there was federal and state policy interest this could all be amplified 10X.
An example here is workforce development and international trade with a manufacturing focus. This could create millions of new jobs in many of these areas. In this manner, we would ‘arrange’ new economic success stories for America! Within months, components of this broader strategy could be powered up quickly if politics were not in the way.
With the knowledge of these economic pockets and the understanding there is viable labor present, these are areas where real growth is possible right now. Then we can look to target, replicate, and incubate the same elsewhere. This is nation building. Manufacturing could be embedded into those plans regionally.
We need to re-think these markets and how we can help them. A University of Georgia report asserts that these markets have $3.9 trillion in annual buying power. With collaborative efforts, we could realize a new era of economic stability across the nation’s more challenging markets.
Regardless of the current fiscal impact numbers, when you have existing market conditions with multiple trillions of dollars’ worth of economic activity, this can be enhanced.
HARNESSSING TECH: “Do Business Anywhere”
Government has a direct responsibility to enhance the digital transformation of the nation they serve. Some of the most important areas of innovation we need are digital currency and various tech innovations in general.
When it comes to tech and digital currency regulations, America is falling behind. Even with something as simple as broadband deployment, we are years behind. How is this possible? We are talking about basic internet access here.
Further, it is estimated that we are at least a decade away from issuing a digital dollar backed by the feds. Remember, we are the country that serves as the center of the international monetary system. This is staggering to understand.
This is one of our biggest economic challenges. Congress not responding to basic and obvious modern technology issues. This is destroying significant market opportunities for innovation and Americans in general.
TRIBES CAN TAKE THE LEAD ON THE DIGITAL REVOLUTION
Think about the companies below. They have revolutionized the way businesses utilize digital web, and mobile app-based platforms.
Earlier I mentioned the PDE model. This is how tribes can serve as the platform to help Americans catch up with the rest of the world.
Important in this discussion is how a Native American governmental alliance figures into a similar business proposition. Tribes are sovereign nations, and they can serve as a business platform. Moreover, they can collaborate on business endeavors with anyone without requiring accredited investor status.
Tribes can build open innovation models. We can harness big data and move faster to help enhance digital business transformations. Businesses have transformed the way they build and deliver services. In doing so, they have created new market conditions that have disrupted their respective industries. Tribes can help society in similar ways.
This reminds me of Henry Ford on some level. Henry engaged in first principle thinking. He didn’t try and make faster horse buggies; he invented a car so we could travel more reliably.
IMPORTANT POINT, the people created this innovation, they did not wait around for Congress. It’s time for our own Henry Ford moment.
Modernizing our markets and digital business capabilities under a PDE should be a top priority. Embedding digital attributes and specialized tribal business enhancements will create new levels of prosperity for all of us.
With digital market advancements, geographical tethering will be erased. Meaning, ventures under a PDE can extend geographically across various states, oceans and tribal territories, with no technical worries. As such, someone in Iowa, Kansas or Brazil can benefit from a PDE business pursuit being done by a tribe on the east coast. Frictionless business is the new digital reality.
“This is significant because business (i.e., JVs, LPs and M&A investments, ect.) balance sheets can sit on a tribal reservation, while business occurs all over the country, and throughout the globe.”
Some tribes have come to realize that you have to bring services (i.e., seamless investments, digital banking, etc.) to the people digitally. In other cases, you have to offer enough organic and real value that people want to come to you, we achieve both objectives here.
Likewise, governments all over the world use their standing as governments to attract business activities; tribes will now do the same. These activities, in the long term, will help stabilize many parts of the American economy.
COMPETITIVE ADVANTAGES: “Better Business”
- Tribal governments can charter their own tribal government-owned corporations. This can be done in orchestration with collaborative partners, meaning all Americans.
- A tribal JV can offer accelerated depreciation for investors.
- Companies R&D cost can be dramatically reduced under this model.
- Speed to market can be accelerated for business growth opportunities. (i.e., regulations/agreements, ect.)
- Built-in protections and benefits can be extended to anyone. (i.e., lower taxes, waiver of sovereign immunity, ect.)
- Tribally chartered PDE enterprises hold the same status as the tribe itself for purposes of federal income tax exemptions. This means, joint ventures under this model can yield significant market growth, with lower taxation rates.
- Tribal governments can promulgate their own regulations governing economic activities. This includes their own tax codes, banking products and currency regulation/codes. This can benefit all Americans.
A mainstream and friendly approach to regional business under these concepts' benefits all of us.
Let's Join Forces and Grow Together —
As we prepare several new economic business options, I am in talks with some local communities. Let’s explore some opportunities where you reside.
In the coming years I look forward to collaborating with industry professionals and business leaders.
If you’d like to learn more about this project, feel free to look us up online at: https://tekeni.wixsite.com/tekeni . You can also contact me directly at NativeConsulting@Dr.com
