Indigenous communities, entrepreneurship, and economic development in the new economy

Abstract

ACADEMIC ABSTRACT The 500 million Indigenous Peoples are struggling to rebuild their ‘nations’ and improve their socioeconomic,circumstances. Participation in the global economy,through entrepreneurshipis widely accepted as the key to success. Importantly, most want this participation to be ‘on their own terms—terms in which traditional lands, history, culture and values feature prominently. Using regulation theory, we explore the feasibility of the Indigenous approach to development and conclude that is theoreticallysound. Then we present a case study on the Osoyoos First Nation showing,how the community,has used entrepreneurshipto participate in the economy,‘on its own terms’. EXECUTIVE SUMMARY Around the world Indigenous Peoples are struggling to rebuild their ‘nations’ and improve

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INDIGENOUS COMMUNITIES, ENTREPRENEURSHIP AND ECONOMIC
DEVELOPMENT IN THE NEW ECONOMY
Robert Anderson, University of Regina
Regina, S.K. S4V 0P5
Canada
306-585-4728; robert.anderson@uregina.ca
Bob Kaysea, First Nations University of Canada
ACADEMIC ABSTRACT
The 500 million Indigenous Peoples are struggling to rebuild their ‘nations’ and improve
their socioeconomic circumstances. Participation in the global economy through
entrepreneurship is widely accepted as the key to success. Importantly, most want this
participation to be ‘on their own terms—terms in which traditional lands, history, culture and
values feature prominently. Using regulation theory, we explore the feasibility of the
Indigenous approach to development and conclude that is theoretically sound. Then we
present a case study on the Osoyoos First Nation showing how the community has used
entrepreneurship to participate in the economy ‘on its own terms’.
EXECUTIVE SUMMARY
Around the world Indigenous Peoples are struggling to rebuild their ‘nations’ and improve
the socioeconomic circumstances of their people. Depending on the figures used this
constitutes an emerging market 500 hundred million people (Peredo et al 2004; Indigenous
Peoples’ Human Rights Project, 2003
). Participation in the global economy through
entrepreneurship and business development is widely accepted as the key to success by most
Indigenous people. However, importantly most Indigenous groups want this participation to
be ‘on their own terms—terms in which traditional lands, history, culture and values play an
important role (Anderson, 2006; Dana et al, 2005; Peredo et al, 2004, Hindle and Lansdowne,
2005; Galbraith et al, 2006). What is emerging is a version of entrepreneurship that extends
beyond private for profit entrepreneurship to include social entrepreneurship, public sector
entrepreneurship, nonprofit entrepreneurship and community entrepreneurship.
In the next section, we provide a description of the development aspirations and activities of
other Indigenous people and a description of the approach to economic development that is
emerging among them, using Canada as a particular example, but also considering others. We
also describe the successful efforts of the world’s Indigenous people to gain recognition of
their rights to their traditional lands and resources as a very important element of their
approach to ‘non-market entrepreneurship’; one which provides capacity to participate in the
global economy one their own terms, some of which are decidedly non-market driven
Following the overview of Indigenous people (particularly their approach to development and
the increasing recognition of their right to their traditional lands and resources), we use
regulation theory to explore the feasibility of the emerging Indigenous approach to
development including the critical role of entrepreneurship in the process. As a result of this
review, we conclude that the approach is theoretically sound. We argue that successful
participation in the global economy by a particular Indigenous group is the manifestation in a
particular context of the evolving relationship between business (the regime of accumulation,
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RA) and society (the mode of social regulation, MSR) that produces a mode of development
(MD). Further we argue that such a MD emerges from the "very specific articulation of local
social conditions with wider coordinates of capitalist development in general" (Scott, 1988:
108). Importantly, these local conditions include "economic structures, values, cultures,
institutions and histories" (Dicken, 1992: 307).
Having made the theoretical argument, in the third section we present a case study on the
Osoyoos First Nation that illustrates one instance of the emergence of a successful MD that is
allowing an Indigenous community to participate in the broader economy ‘on its own terms’
including the role of traditional lands and resources in the process. Then in the fourth and
concluding section, we re-examine the Aboriginal approach to development the lens of the
Osoyoos experience.
THE PROBLEM AND THE RESPONSE
According to the World Bank “Indigenous peoples are commonly among the poorest and
most vulnerable segments of society” (World Bank, 2001). Confronted with these depressing
economic statistics, many, but certainly not all, modern nation states have recognised the
plight of their indigenous communities. In response, throughout the middle decades of the
20th century, indigenous people, along with other poor populations of the world, were the
target of a wide range of initiatives, efforts and programmes to assist in economic
development. In large part, these top-down, externally developed, modernisation-based
efforts failed to improve the economic circumstance of the world’s poor including indigenous
people, while at the same time often damaging their traditional economies leaving
communities less self-reliant and therefore worse of than before.
Agrawal says that the failure of neo-liberal (market) and authoritarian and bureaucratic (state)
approaches to development has lead to a “focus on Indigenous knowledge and production
systems” (Agrawal, 1995, p. 414). He goes on to say that these efforts are an attempt “to
reorient and reverse state policies and market forces to permit members of threatened
populations to determine their own future” (Agrawal, 1995: 432). For the most part, these
efforts are not taking place outside the global economy, but within it. As Bebbington
suggests, “like it or not, Indigenous peoples are firmly integrated into a capricious and
changing market. Their well-being and survival depends on how well they handle and
negotiate this integration” (Bebbington, 1993, p.275). He goes on to say that the Indigenous
approach to negotiating this integration is not to reject outright participation in the modern
economy
But rather to pursue local and grassroots control... over the economic and social
relationships that traditionally have contributed to the transfer of income and value
from the locality to other places and social groups (Bebbington, 1993,p.281).
This is certainly the approach to development among Aboriginal people in Canada. They
have not been standing idly by accepting the status quo. Instead over recent decades they
have been developing and successfully implementation an approach to development
Aboriginal people intended to achieve the outcome described by Bebbington. This approach
is described in Figure 1. Entrepreneurship—the identification of unmet or undersatisfied
needs and related opportunities, and the creation of enterprises, products and services in
response to these opportunities—lies at the heart of the Aboriginal economic development
strategy. Through entrepreneurship and business development they believe they can attain
their socioeconomic objectives. These objectives include (i) greater control of activities on
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their traditional lands, (ii) an end to dependency through economic self-sufficiency, (iii) the
preservation and strengthening of traditional values and the application of these in economic
development and business activities and, of course (iv) improved socioeconomic
circumstance for individuals, families and communities. Others have found this approach
among Indigenous people outside Canada, for example among the Maori in New Zealand and
Aborigines in Australia (Hindle & Lansdowne, 2005; Frederick & Foley, 2006; Lindsay,
2005), the Sámi Northern Europe (Dana & Remes, 2005; Gernet, 2005), Native Americans in
the United States (Pearson, 2005) and in Africa (Ndemo, 2005; Serumaga-Zake et al, 2005).
But it is far from the only approach as we discuss in the next section on theory.
Insert Figure 1:
The Emerging Indigenous Market
Events during the final decades of the 20
th
century and the opening decade of the 21
st
resulted
in Indigenous people becoming an emerging market of some consequence to all players in the
global economy. These events can only be covered briefly. We will do so by focusing on
three things: (i) ILO 169 of 1989 of the International Labour Organization, (ii) the United
Declaration on the Rights on Indigenous People finally going before the General Assembly in
the fall of 2006 for a ratification vote, (ii) and the policy of the World Bank toward
Indigenous people revised in 2005.
It is essential to understand the reason for the emergence of these three things. They are not
the result of the benevolent action of the countries of the word coming together to decide to
grant something to Indigenous people. In fact, the truth is just the opposite. They are the
outcome of a centuries-long struggle by Indigenous people around the world to have their
rights recognized, in the face of immense resistance by the states in which Indigenous people
have found themselves. This resistance by states (as well as other players such as
multinational corporations) has ranged from arguably well-meant efforts at modernization to
genocide on a huge scale. Yet Indigenous people have succeeded to a remarkable extent in
forcing the world to acknowledge their rights.
International Labor Organization Convention 169
In 1989, the International Labor Organization (ILO), which at the time was the only UN
agency with a special convention in relation to indigenous peoples, revised its Convention
107 of 1957 and created a new Convention (ILO Convention 169). In response to pressure
from Indigenous people, the new convention dropped the “integrationist” or “assimilationist”
philosophy of the previous one and recognises the rights of Indigenous people “to retain their
own customs and institutions, where these are not incompatible with fundamental rights
defined by the national legal system and with internationally recognized human rights” (ILO
Article 8).
ILO 169 Article 14 address land rights and Article 15 addresses resource rights. Relevant
excerpts from both follow.
Article 14
1. The rights of ownership and possession of the peoples concerned over the lands
which they traditionally occupy shall be recognised. In addition, measures shall be
taken in appropriate cases to safeguard the right of the peoples concerned to use lands
not exclusively occupied by them, but to which they have traditionally had access for
their subsistence and traditional activities. …
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2. Governments … identify the lands which the peoples concerned traditionally occupy,
and to guarantee effective protection of their rights of ownership and possession.
Article 15
1. The rights of the peoples concerned to the natural resources pertaining to their lands
shall be specially safeguarded. These rights include the right of these peoples to
participate in the use, management and conservation of these resources.
2. In cases in which the State retains the ownership of mineral or sub-surface resources
or rights to other resources pertaining to lands, governments … shall consult these
peoples, … The peoples concerned shall wherever possible participate in the benefits of
such activities, and shall receive fair compensation for any damages which they may
sustain as a result of such activities.
United Nations Declaration of the Rights of Indigenous People
1
For more than two decades, efforts have been underway in the United Nations to develop
international standards to address the widespread discrimination and marginalization that has
forced Indigenous peoples worldwide into situations of extreme poverty and cultural
destruction. After many years of discussion within the UN’s Sub commission on Human
Rights, on June 29, 2006
the Working Group brought forward a proposed final text that offers both an inspiring
affirmation of the rights of Indigenous peoples and an assurance that “the human
rights…of all shall be respected.” (http://www.iwgia.org/graphics/Synkron-
Library/Documents/Noticeboard/News/International/PublicstatementAmnesty.htm)
In the preamble the Declaration recognizes the importance of land and resources to
Indigenous people saying that have suffered as a result of the loss of their lands and resources
(PP5), that these rights are inherent to their existence as Peoples (PP6), and that these rights
are essential rebuilding Indigenous communities as Indigenous people wish to rebuild them
(PP8)
PP5 Concerned that indigenous peoples have suffered from historic injustices as a
result of , inter alia, their colonization and dispossession of their lands, territories and
resources, thus preventing them from exercising, in particular, their right to
development in accordance with their own needs and interests,
PP6 Recognizing the urgent need to respect and promote the inherent rights of
indigenous peoples which derive from their political, economic and social structures
and from their cultures spiritual traditions, histories and philosophies, especially their
rights to their lands, territories and resources;
PP8 Convinced that control by indigenous peoples over developments affecting them
and their lands, territories and resources will enable them to maintain and strengthen
their institutions, cultures and traditions, and to promote their development in
accordance with their aspirations and needs,
A series of statements about specific rights follow the preamble. Excerpts from those most
relevant to land and resource rights and development on their own terms follow.
A21 Indigenous peoples have the right to maintain and develop their political,
economic and social systems or institutions, to be secure in the enjoyment of their own
means of subsistence and development, and to engage freely in all their traditional and
other economic activities.
1
A plain text version of the Declarations is available at http://www.iwgia.org/sw1592.asp
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Indigenous peoples deprived of their means of subsistence and development are entitled
to just and fair redress.
A26 Indigenous peoples have the right to the lands, territories and resources which
they have traditionally owned, occupied or otherwise used or acquired. …
A27 Indigenous peoples have the right to redress, by means that can include restitution
or, when this is not possible, of a just, fair and equitable compensation, for the lands,
territories and resources which they have traditionally owned or otherwise occupied or
used, and which have been confiscated, taken, occupied, used or damaged without their
free, prior and informed consent.
The World Bank Policy on Indigenous people
In 2005 the World Bank instituted a new policy with respect to Indigenous people, BP4.10.
This policy replaces the previous one OD4.2 dated September 1991. While only pertaining to
the activities of the Bank itself and the projects it funds, the new policy is another reflection
of the success of the struggle by Indigenous people for recognition of their rights, including
those to land and resources. One of the centre-pieces of the new policy is the concept of ‘free,
prior and informed consultation’. The Bank’s policy says
2. Free, Prior, and Informed Consultation. When a project affects Indigenous Peoples,
…assists the borrower in carrying out free, prior, and informed consultation with
affected communities …taking into consideration the following:
(a) … consultation that occurs freely and voluntarily, without any external
manipulation, interference, or coercion, … parties consulted have prior access to
information on the intent and scope of the proposed project in a culturally appropriate
manner, form, and language;
(b) … recognize existing Indigenous Peoples Organizations (IPOs), including councils
of elders, headmen, and tribal leaders, and pay special attention to women, youth, and
the elderly;
(c) …starts early, since decisionmaking among Indigenous Peoples may be an iterative
process, and there is a need for adequate lead time to fully understand and incorporate
concerns and recommendations of Indigenous Peoples into the project design
In addition to free, prior and informed consultation, the Bank’s policy requires a social
assessment
(d) An assessment … of the potential adverse and positive effects of the project….an
analysis of the relative vulnerability of, and risks to, the affected Indigenous Peoples’
communities given their distinct circumstances and close ties to land and natural
resources ….
(e) The identification and evaluation … of measures necessary to avoid adverse effects,
or if such measures are not feasible, the identification of measures to minimize,
mitigate, or compensate for such effects, and to ensure that the Indigenous Peoples
receive culturally appropriate benefits under the project.
Finally, the policy require the development of an Indigenous Peoples Plan which includes
(c) A summary of results of the free, prior, and informed consultation … that led to
broad community support for the project.
(d) A framework for ensuring free, prior, and informed consultation … during project
implementation.
(e) An action plan of measures to ensure that the Indigenous Peoples receive social and
economic benefits that are culturally appropriate, including, if necessary, measures to
enhance the capacity of the project implementing agencies.
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(f) When potential adverse effects on Indigenous Peoples are identified, an appropriate
action plan of measures to avoid, minimize, mitigate, or compensate for these adverse
effects.
Concluding Comments on the International Context
While the ILO Convention and the UN Declaration are not binding on states and the World
Bank policy applies only to projects in which the organization is involved the emergence of
the three indicates that the world is listing and responding to the just demand of Indigenous
people. According to the International Working Group on Indigenous Affairs (IWGIA) of the
United Nations peaking about the UN Declaration but equally true of the other two
While the Declaration is not binding to governments, it is a positive step which puts
pressure on governments to live up to the objectives of the Declaration and would serve to
reinforce such universal principles as justice, democracy, respect for human rights, equality,
non-discrimination, good governance and good faith. (IWGI, 2006)
And they put similar pressures on the other major global player, particularly multinational
corporations. Indigenous people are emerging as players on consequence in the global
economy
In the section that follows, we explore the theoretical feasibility of Aboriginal people (or any
other Indigenous people) negotiating their integration into the global economy in a manner
that leaves them a reasonable level of control over the terms, conditions and outcomes of
such an integration, and how this might be accomplished and the role of entrepreneurship in
this process. In doing so, we will pay particular attention to the role that alliances between
Indigenous and non-Indigenous enterprises might play in the process.
THEORETICAL PERSPECTIVE
The modernization and dependency perspectives have dominated development thinking
throughout the middle decades of the Twentieth Century. The former has been the operational
paradigm driving the development agenda, giving the state a central role in the process; while
the later has emerged as a critique of the failure of this modernization agenda to delver the
anticipated development outcomes, often casting the corporation as the villain. Even as
modified in recent years, the two perspectives present incompatible views of the relationship
between a developing people/region and the developed world. In particular circumstances,
one or the other of these approaches can often adequately explain what happened. However,
when applied in any particular circumstance to offer insight into what might happen, the two
produce conflicting answers. Similarly, they provide contradictory guidance to groups
searching for a path to development as they perceive it.
In the closing three decades of the 20
th
Century, the conflict between the modernization and
dependency perspectives led many to conclude that both are incomplete (as opposed to
wrong) with each describing a possible but not inevitable outcome of interaction between a
developing region and the global economy. In this vein, Corbridge says that there has been a
powerful trend towards “theories of capitalist development which emphasize contingency ... a
new emphasis on human agency and the provisional and highly skilled task of reproducing
social relations” (Corbridge, 1989: 633). As Tucker states, this allows “for the possibility of
incorporating the experience of other peoples, other perspectives and other cultures into the
development discourse” (Tucker, 1999: 16). Development need not be as defined by the
‘developed world’ and the interaction between a particular people and the global economy
need not be as envisaged by the modernization or dependency perspectives; it can be
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something else entirely. Why not that which is being sought by Indigenous people—
development as they define it?
Regulation theory is one of the new approaches to development that emphasizes contingency
and human agency. Hirst and Zeitlin say that it executes
a slalom between the orthodoxies of neo-classical equilibrium theory and classical
Marxism to produce a rigorous but nondeterministic account of the phases of capitalist
development that leaves considerable scope for historical variation and national
diversity (Hirst and Zeitlin, 1992: 84).
Expanding on this notion of variation and diversity, Elam says that on one hand, national and
regional units are constantly in a state of flux as they adjust to the influences of the global
economy. All must accommodate themselves at least to some extent to its hegemony. At the
same time, these broader global influences “are seen as having essentially local origins”
(Elam, 1994: 66). This translates into a counter-hegemonic potential in terms of the activities
actually undertaken by people as they negotiate their way locally through the global
economy. It is not simply a case of conform or fail.
Regulation theory analyzes the global economy “in terms of a series of modes of development
based on combination of the currently ascendant regime of accumulation and a variety of
modes of social regulation” (Hirst and Zeitlin, 1992, p. 84-85). The regime of accumulation
determines the general possibilities for the economy. Scott says it “can be rather simply
defined as a historically specific production apparatus ... through which surplus is generated,
appropriated, and redeployed” (Scott, 1988, p. 8).
Importantly, with respect to geographic scale, the regime of accumulation is a “relationship
between production and consumption defined at the level of the international economy as a
whole” (Hirst and Zeitlin, 1992,p.85).
If the world were Adam Smith's, peopled by the universal perfectly rational 'economic man',
no regulation of the global economy beyond the 'invisible hand' of perfectly functioning
markets would be required. But the world is not Smith's; people are far from perfectly
rational and they are driven by many things not economic. Further, they are far from
universal in the nature of their variations from the 'perfect'. As a result, Scott says that
stability in the economic system is
dependent on the emergence of a further set of social relations that preserve it, for a
time at least, from catastrophic internal collisions and breakdowns. These relations
constitute a mode of social regulation. They are made up of a series of formal and
informal structures of governance and stabilization ranging from the state through
business and labor associations, to modes of socialization which create ingrained
habits of behaviour, and so on (Scott, 1988, p.9).
Hirst and Zeitlin agree saying that a mode of social regulation (MSR)
is a complex of institutions and norms which secure, at least for a certain period, the
adjustment of individual agents and social groups to the over arching principle of the
accumulation regime (Hirst &Zeitlin, 1992, p.85).
While regulation theory does not prescribe the exact nature of a particular mode of social
regulation, it is generally agreed that:
1. A regime of accumulation does not create or require a particular mode of social
regulation, "each regime, in short, may be regulated in a multiplicity of ways" (Scott,
1988, p. 9).
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2. Because modes of social regulation are based on such things as "habits and customs,
social norms, enforceable laws and state forms" (Peck &Tickell, 1992, p. 349) unique
modes “can exist at virtually any territorial level—local, regional, national, global”
(Storper &Walker, 1989, p.215).
Another aspect of regulation theory—its historicity—adds further strength to the argument
that modes of social regulation, and therefore modes of development differing considerably
one from another, can and do emerge at every geographic scale.
Corbridge (1989) says regulation theory indicates that the global economic system has gone
through four stages in the Twentieth Century. In stage one, the system was in equilibrium.
Stage two was a period of crisis or disequilibrium resulting from a shift from the extensive to
the Fordist regime of accumulation. Equilibrium returned in stage three when suitable modes
of social regulation emerged. The fourth (current) stage is also one of crisis caused by a
failure of the monopolistic mode of social regulation (in all it variants) to accommodate a
"selective move from mass production [the Fordist regime accumulation] to various forms of
flexible production" (Norcliffe, 1994, p.2).
Forces resulting in the shift to the new flexible regime of accumulation include: (i) technical
limits to rigid fixed capital production techniques, (ii) working class resistance to Taylorist
and Fordist forms of work organization (Jessop, 1989), (iii) a change in consumption patterns
“toward a greater variety of use values ... [that] cannot be easily satisfied through mass
production” (Amin, 1984: 12), (iv) the increasing mobility of capital and the resulting ability
of transnational corporations (TNCs) to move among spatially-bounded regulatory
jurisdictions in the pursuit of greater profits (Leyshon, 1989), and (v) in the face of this
internationalization of capital, the inability of national Keynesian policies [all variants of the
of the monopolistic mode of social regulation] to avert crisis (Komninos, 1989).
Everywhere and at every geographic scale—community, subnational region, national,
supranational region and globally—people are struggling to develop modes of social
regulation that will allow them to interact with this new flexible regime of accumulation on
their terms. As they do this, they are building the ‘new economy’, not simply reacting to it.
As a result, there has been a shift in who companies consider stakeholders and how they
behave toward these groups. Nowhere is this truer than in the relationship between companies
and communities. In spite of globalization and information technology, everything a
company does it does somewhere, every employee and every customer lives somewhere, and
inputs of raw material and capital goods come from somewhere; and all these somewheres
are communities in some sense of the word. Because of this, as companies forge networks of
suppliers, subcontractors and marketing channel partners and seek to control them through
“collective social and institutional order in place of hierarchical control” (Storper and Walker
1989, p.52), they are much more likely to see communities as valued members of networks
rather than something external to these networks.
This increase interest in communities by companies is particularly significant for those
communities interested in economic development as many are. If an Indigenous community
(or any other) can show that it can become a valued member of a network it is likely to find
that the companies that make up the network will in turn be supportive of the community’s
development aspirations, not for charitable reasons but out of economic self-interest, a far
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more enduring motive. A sense of this can be found in Hewlett Packard’s ‘New Framework
for Global Engagement’.
our global-citizenship and business strategy is about doing good and doing well in the
same activities—as opposed to doing well in order to do good.
A few years ago …realized … philanthropic efforts … results suboptimal. Could
achieve much more if doing good and doing well were mutually reinforcing (and with
recent world events we felt that we needed to do more). At the same time, we thought
we could achieve more for HP’s business in the process—a vital consideration for our
shareholders as well as our competitiveness (Dunn &Yamashita, 2003,p.53-4).
HP is not alone in this view. Other corporations have reached the same conclusion, which
flows naturally from the demands of the new flexible regime of accumulation. As a result, in
recent years many Aboriginal communities have been able to forge lasting mutually
beneficial relationships with corporate partners with views similar to HP’s. Examples include
the Osoyoos Indian Band with Vincor Canada’s largest wine producer (explored later in this
paper, the La Ronge First Nation with Cameco the world’s largest uranium mining company
and with Trimac a multinational trucking firm (Hindle, Kayseas, Anderson & Giberson,
2005), and the Meadow Lake Tribal Council with Millar-Western Pulp (Anderson, 2002) to
name just a few.
This leads us to a discussion of the modes of social regulation emerging in response to the
demands of the flexible regime of accumulation. The ‘new economy rhetoric’ has been
stressed deregulation. But, in fact, what is being touted as deregulation is not; it is re-
regulation. The nature of the regulation is changing but regulation continues, as it must. What
is happening is a shift in the locus of regulation from the ‘nation state’ in two directions—to
the supra-national and to the local—as a number of authors attest. For example, Amin and
Malmberg (1984, p. 222) say the crisis in the global economy has resulted in “new
opportunities for the location of economic activities” and that “the geography of post-Fordist
production is said to be at once local and global”. Scott (1988,p.108) agrees saying that new
industrial spaces result from a "very specific articulation of local social conditions with wider
coordinates of capitalist development in general". Finally, Dicken (1992, p. 307) emphasizes
that successful participation in the global economic system "is created and sustained through
a highly localized process" and that "economic structures, values, cultures, institutions and
histories contribute profoundly to that success".
With the shift in locus of regulation, the differentiating role of the state at the national level
has decreased (from what it was when the national ‘Keynesian modes of social regulation
ruled in partnership with Fordist regime of accumulation) and the homogenizing role of the
state at the supranational level has increased—the European Economic Community, the
North American Free Trade Agreement, the General Agreement on Tariffs and Trade, and so
on. This ‘globalization’ of regulation is a reality; it, along the global flexible regime of
accumulation, is the face of the global economy that communities see. Those who chose to
participate in this global economy must accommodate themselves to this reality. But, and this
is the key, they can do so ‘on their own terms’ so long as these term do not conflict with the
global ‘rules of the game’. So the Osoyoos Indian band can grow grapes and make and sell
wine in a manner consistent with their history, culture, values and objectives, so long as they
follow the subnational, national and international ‘rules of the wine game’. Further, over time
by their actions they can influence the nature of these rules. Similarly, the La Ronge First
Nation can and has established a business to harvest, dry and export organic wild mushrooms
to Europe and Japan. How they chose to manage the land and compensate the pickers is up to
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them, but the product must meet organic standards and food safety regulations at the national
and international level. As these and other communities do this, the global mode of social
regulation acquires local flavours, and distinct modes of development emerge that are at the
same time local and global.
The state at all levels and the ‘local’ do not have the mode of social regulation field to
themselves. There is another important player—the civil sector. This is a diverse category
consisting of an almost limitless number of non-state organizations ranging from non-
governmental aide agencies, through groups espousing a variety of cause such as the
environment (e.g. Green Peace and the Sierra Club) and human rights (e.g. Amnesty
International), to groups speaking for a particular group of people (e.g. the World Council of
Indigenous People), and so on. These group, too, operate at the subnational, national and
international levels. Directly through their actions and indirectly through the pressure they
bring to bear on government and companies, the organizations of the civil sector play an
influential part in the shaping of the mode of social regulation and in its evolution over time.
In the Indigenous context, a case in point would be the outcry by civil groups in response to
the destruction of the rainforests not only from an environmental perspective but also in
response to the displacement Indigenous communities. The campaign has had an impact.
Pressure on states has resulted in some of them addressing both environmental and
indigenous concerns. Perhaps more telling, publicity and the resulting market pressure on the
forestry companies has resulted in at least some companies adopting more environmentally
appropriate forest practises and more responsive and inclusive approaches to working with
Indigenous communities in regions where they operate. This story repeats itself in other
areas; for example, the growing support by many groups for (i) Indigenous land rights and the
right to self determination, and (ii) the Indigenous right to ‘ownership’ of their traditional
environmental and ‘medical’ knowledge, and the related right to participate in decision about
the appropriate use of this knowledge and to share in the benefits from its commercialization.
These and other actions by the civil sector have served to create aspects of the emerging and
evolving mode of social regulation that increase the strategic importance for Indigenous
communities in the networks of corporations.
Not all communities elect to participate uncritically or at all in the global economy. As a
result, local modes of social regulation can be, in Gramscian terms, both hegemonic and
counter-hegemonic in their policies and programs according to the extent to which they
consent to capitalist global economy, attempt to transform it or dissent from it. These three
responses are associated with three different analytical/intuitive starting-points with respect to
the global capitalist economy. This approach is inspired by Schuurman’s (1993) discussion of
Eugenio Tironi’s analysis of social movement discourses in Santiago, Chile. The first is an
analysis that claims that peripheral (indigenous or other) communities have been excluded
from capitalism and that the objective is to remedy this by removing whatever barriers are
responsible for this exclusion, and the prescribed solution is usually ‘modernization’. The
second is an analysis that claims that capitalism is at least in part culturally alien and that it is
necessary to transform the ‘alien’ aspects of it as part of the process of participating in it. The
third is an analysis that claims that capitalism is exploitative and beyond redemption and that
the need is to exclude or resist it. These analytical/intuitive starting points are not simply
abstract concepts. They and the beliefs about the capitalist economy associated with them are
present in varying combinations and varying strengths among the members of all
communities. So, it is quite possible for an Indigenous community to arrive an approach to
participation in the global economy that acknowledges the need for some modernization (e.g.
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managerial education and technical education), while maintaining certain highly valued
traditional traits (e.g. a communal rather than individual land holding system) and resisting
certain things the system might seek to impose on them (e.g. rejecting one person one vote
democracy in favour of clan and/or hereditary leadership).
Figure 2 captures these possibilities by considering a group’s response to the global economy
on two continuums. The first is the degree to which a group opts into the global economy, or
opts out. The second address the nature of this opting in or opting out. Is the approach to
accept the terms of the global economy ‘as is’, or is it to attempt to transform it in some
fashion. A combination of the continuums results in four extreme possibilities. The first two
occur when a group chooses to opt out of the economy. At one extreme the opting out can be
passive; that is choosing not to participate and instead seeking isolation and even protection
from the impact of the global economy. Alternatively, the opting out can be active and
aggressive where a group rejects the global economy and seeks to resist it or overthrow it
through protest and even ‘revolution’. The other two extreme positions (#s 3 and 4) occur
when a group chooses to ‘opt in’ and actively participate in the global economy. Again that
participation can be characterized further by the degree to which the group passively
accommodates itself to the requirements of the global economy, or not. The Aboriginal
approach in Canada (see Figure 1) has been of the opt-in variety, but it has not been passive.
Participation in the economy has been accompanied by an ongoing struggle for land and other
rights to allow this participation to be ‘on their own terms’. Indigenous responses elsewhere
cover the entire spectrum of possibilities from rejection and violent revolution to passive
acceptance and willing assimilation.
Insert Figure 2: Community Responses to the Global Economy
It follows that the mix of integrating, transforming and excluding mechanisms adopted by a
particular community in its approach to the global economy, and therefore the mode of
development that emerges, is heavily influenced by the particular ‘face’ of the state, the civil
sector and corporations that that community sees now and has seen in the past. What Osoyoos
‘sees’ as its particular collage as it develops its Nk’Mip Project is many respects the same as
what other winery and eco tourism operators in the Okanagan Valley see, but in some
important respects it is not. Finally, this face is ever evolving not static. The face of the
corporation seen by communities 30 years ago is not the same face as they see today, and that
new face offers promise.
Figure 3 attempts to illustrate the complex relationship among Indigenous communities,
corporations, the state at all levels and the civil sector, as all work together (consciously or
unconsciously, willingly or unwillingly) in the formation and evolution of modes of social
regulation in response to the flexible regime of accumulation. In any particular case a
complex set of factors interact to influence the outcome of the interaction of a group of
people (in this case that follows an Aboriginal community, but it need not be) with the forces
of the global economy as they seek to develop ‘on their terms’. These include (numbered 1, 2
and 3 in the model)
1. The impact of the ‘state’ at all levels and the ‘civil sector’ on the multiple overlapping
modes of social regulation and therefore on participants in the global economy, and the
influence of these participants on the ‘state’ and the ‘civil sector’.
2. The community-in-question’s approach to economic development (in this case
Aboriginal) including history, current circumstances, objectives, approach to participation
in the global economy including strategies for participation, transformation and exclusion
(and these are not mutually exclusive categories), and actual outcomes.
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3. Corporate (as the usual representative of the regime of accumulation encountered by
communities) responses to the community-in-question particularly motivating forces
(including but not limited to the community’s control over critical natural, human and
financial resources and/or community members attractive ness as a market), strategies and
objectives, and actual outcomes.
And as both an outcome and ongoing feedback to the process
4. The expected mode of development and the actual mode that emerges in the particular
circumstances.
Insert Figure 3: Modes of Development
Indigenous groups that choose to ‘opt in’ to the global economy are not at the end of the
process, they are at the beginning. To successfully ‘opt in’, on their own terms or not, they
must identify business opportunities and then marshal resources and develop organizations to
realize the potential that these opportunities have to satisfy their economic and other
development objectives. This is the process of entrepreneurship. Not the entrepreneurship
that is narrowly conceived of as a small business operated and/or a new business created by
an entrepreneur, but the entrepreneurship that is broadly conceived of as an economy-
building process—Schumpeterian entrepreneurship. Morris (1998) captures the nature of this
process by stating, “entrepreneurship is a universal construct that is applicable to any person,
organization (private or public, large or small), or nation” and that “an entrepreneurial
orientation is critical for the survival and growth of companies as well as the economic
prosperity of nations” (Morris, 1998, p. 2). Similarly, Kao, Kao and Kao (2002) define
entrepreneurism as, “not just a way of conducting business; it is an ideology originating from
basic human needs and desires … entails discovering the new, while changing, adapting and
preserving the best of the old” (Kao et al, 2002,p. 44). Other authors, including Blawatt
(1998), Drucker (1985), Fiet (2000) and Moran and Ghoshal (1999) agree. Description of the
entrepreneurial process, however, does not address the issue of agency. What factors
contribute to initiating, negotiating and maintaining the process in the first place? We argue
that social capital and mediating structures are essential agents of change in successful
Indigenous modes of economic development
Produced capital, human capital, and natural capital, while critical ingredients of economic
development, require organization and integration if they are to produce wealth. The term
social capital conceptualizes this requirement and gives considerable scope the range of
modes of development that are possible. “Social capital is the glue that holds societies
together and without which there can be no economic growth or human well-being”
(Serageldin in Grootaert, 1998, iii). More technically:
Social capital includes the social and political environment that enables norms and
shapes social structure. In addition to…largely informal, and often local, horizontal
and hierarchical relationships…[it] also includes the more formalized institutional
relationships and structures such as government, the political regime, the rule of law,
the court system, and civil and political liberties (Grootaert, 1998,p.3).
For Indigenous communities, as the Osoyoos case will demonstrate, the roles, powers and
capacities of local, formal institutions are indicators of how successful, from sustainability
and cultural perspectives, economic development will be. Indeed, as Newman and Dale
(2005, p. 477) argue “much of the practical movement toward sustainable development is
occurring at the community level. Many communities are attempting to resolve conflict
surrounding multiple uses of land, where values are often tightly held…”. Borrowing from
the work of the other social capital theorists, Newman and Dale distinguish between bonding
social capital and bridging social capital.
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For local economic development, bonding social capital is generated by strong social and
cultural ties between members of a community. It allows for the creation of a common view
of the community and the values it holds. It can “reinforce exclusive identities and
homogenous groups (Newman & Dale, 2005, p. 479). For Indigenous communities working
to maintain and enhance their cultures, strategies to articulate culture with economic
development are essential if the juggernaut of the dominant regime of capitalist accumulation
is not to totally impose its own cultural values. This requires strong bonding social capital
and the political will and power to express the common aspirations of the community. This is
one of the main functions of local or band government.
Bridging social capital, on the other hand, consists of ties with institutions outside of the
community. In many Indigenous communities, community development corporations assess
and enhance economic development opportunities by negotiating deals and joint-ventures
with businesses well outside the network of bonding social capital. In this sense, the ties
created by bridging social capital are weak in that they are subject to negotiation and are
evaluated, in economic development terms, according to profitability. Profitability, however,
is just one of the terms set by Indigenous peoples. A long-term view of sustainability must be
factored in as well as provisions to ensure collective benefit to all members of the
community. It is important that both types of social capital be in balance. Indigenous
communities’ cultures can be maladaptive if they are not open to change and innovation.
Culture is a strategy for survival by setting norms and values appropriate to existing
conditions. If bonding social capital is such that change is not accepted, opting out of
capitalist economic development may well be the choice, albeit one that is rife with dangers
of being short-lived. Should bonding social capital be too weak, bridging social capital has
the potential to overwhelm any cultural values that are at odds with mainstream values.
This is where conceptualising Indigenous band governments and community development
corporations as mediating structures is helpful. MacIntrye defines mediating structures as
“organizations that stand between individuals and the larger entities of society” (1998, p. 35).
The structures, especially community development corporations, negotiate bridging social
capital for economic development. There are also structures such as band governments that
can mediate conflict in communities, facilitating the growth of bonding social capital
(MacAulay &MacIntyre, 1998). Couto and Guthrie see the “democratic potential” of
“community-based mediating structures [to] adapt capitalism to serve families, communities,
and their broad social purposes” (1999, p.4). Mediating structures can be dynamic agents of
change and can provide and enforce policies that set the environment for economic growth,
In terms of regulation theory, Gendron argues that:
The new system in which economic activities are embedded is characterized by
institutions that are the result of a compromise between social actors originally in
conflict…When they are in alignment, these institutional forms result in a new
regulation mode offering a certain degree of order that enables social and economic
action (2003, p.487)
Based on regulation theory in general and the characteristics of the current moment in the
cycle of crisis and equilibrium of the capitalist system in which we find ourselves, it is
reasonable to conclude the Aboriginal approach to development described in Figure 1, is
theoretically sound. They, and others, can participate in the global economy ‘on their terms’
with an important proviso. That proviso is that ‘their terms’ cannot be in fundamental conflict
with the requirements of the currently dominant flexible regime of accumulation and the
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pervasive global mode of social regulation that is emerging. This condition still leaves
considerable room for local variations of the mode of social regulation reflecting a particular
community’s objectives, culture and values, and history. The key is to have mediating
structures that foster both bridging and bonding social capital. The activities of the Osoyoos
Indian Band described in the next section illustrate this.
THE OSOYOOS INDIAN BAND
The Osoyoos Indian Band (OIB) is located in the province of British Columbia, Canada. It
has 567 members (370 of whom live ‘on reserve’) on a land-base of 32,000-acre in the
southern Okanagan Valley. The land of the OIB is among the most environmentally sensitive
in Canada, containing part of the country’s only desert ecosystem. More than 60 percent of
this unique ecosystem has been completely destroyed, and less than 10 percent remains
relatively undisturbed, much of this on Osoyoos land. This ecosystem provides habitat for a
third of Canada's endangered species; among them, half the vertebrates considered at risk,
more than 100 rare plants and 300 rare invertebrates. Yet it is this land that is foundation for
much of the OIB’s wine/tourism-related economic development activity described in the
following pages. As Stephen Hume says this seems to suggest
two colliding realities—the carefully manicured fields of industrial scale viniculture …
and the dusty, dishevelled sweep of prime rattlesnake habitat that hasn't changed since
some Okanagan warriors rode south to fight the Americans on the side of Chief Joseph
and the Nez Perce (Hume,2002).
To Clarence Louie, current Chief of the OIB, the appearance of colliding realities is
deceiving. Instead, these disparate pieces are not only compatible; they are complementary,
so much so that one can't exist without the other. For Chief Louie, economic development
and the self-sufficiency it creates is the best way to secure the right of his people to be who
they are, to take pride in their heritage and to protect the fragile desert landscape in which a
good part of their cultural identity is forever rooted. The Nk’Mip Project is the product of this
belief. In other words, development but on their own terms in which control over traditional
lands and resources plays a key role, as do traditional culture and values.
Before describing the Nk’Mip Project in some detail it is useful to take a brief look at the
other economic development activities of the OIB. Through the Osoyoos Indian Band
Development Corporation (OIBDC), the band owns and operates nine profitable
enterprises—a construction company, a sand and gravel company, a forestry company, a
campground, a recreational vehicle park, a golf course, two housing developments and a
grocery store. The Band also leases land to several corporations and in most cases these
corporations provide more than just lease revenue; there is often also a related business
alliance.
The motto of the Osoyoos Indian Band Development Corporation is ‘working with business
to preserve our past by strengthening our future’. Two of the development objectives of the
band and the OIBDC are to (i) achieve full employment for its members, and (ii) become
economically self-sufficient by 2010. These and OIB’s other goals are presented in Figure 4.
All five are consistent with the Aboriginal approach to development described in Figure 1.
Clearly the people of the OIB are opting into the global economy, but attempting to do so on
their own terms.
Insert Figure 4: Osoyoos Indian Band Goals
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The OIBDC is governed by a Board of the Directors. The voting members of the board are
the OIB Chief and Councillors, who are elected by the community. At election time and
throughout their terms in office they are accountable to the community for their actions
including the decisions they make about the activities of the OIBDC, and the results they
achieve. This ensures that the cultural vision and values of the community are represented
and defended.
As evidence of the quality of the governance to date the current Chief has served
continuously for 20 years with the exception of one two-year term. As the chart indicates
there are six non-voting advisors to the Board selected for their expertise. While they are non-
voting, the opinions of the advisory board members are respected and the elected voting
directors rarely make decisions which fly in the face of this advice. Further, most issues do
not reach the board until they have passed through a committee or committees made up of
voting and non-voting Board members and others who thoroughly review issue or proposal.
This is particularly true with respect to the evaluation of new business opportunities and/or
the expansion of existing ones. This eliciting of outside expertise builds bridging capital.
As the chart indicates, the elected Chief of the OIB is also the Chief Executive Officer (CEO)
of the development corporation. The CEO along with the Chief Operating Officer (COO)
form the senior management of the corporation. The day to day operation of each of the
OIBDC businesses is the responsibility of that businesses manager. The operating
departments are supported by two support groups, finance and human resources.
The OIBDC is a corporation and like any corporation it reports to its shareholders and
stakeholders quarterly and annually. However, because of its governance structure its
accountability to the community (its shareholder and major stakeholder) is much closer.
Issues relating to OIBDC come up regularly at the meetings of the Chief and Council in their
role as government, and many of these meetings are public. In addition, according to Chris
Scott the development corporation holds regular meeting with groups of stakeholders about
activities, current and proposed, that will have an impact upon them to keep them informed
and to elicit their advice. Bonding social capital is both required by the consultative process
and is generated through it. Comprehensive consultation is not as challenging as it might first
seem because of the size of the community. With only a few hundred members every one
does literally know everyone else and, as with all small communities, there are few secrets.
And finally, with elections every two years the election campaign and related scrutiny is
virtually continuous and the ultimate moment of accountability for the voting Directors never
very distant. As the results describe in the following paragraph show, the system seems to be
working.
In 1994, the OIB had revenues from commercial activities of $1.3 million. By 2002 revenues
from its 10 commercial activities had increased to $12 million, an almost ten-fold increase. In
2003, the OIBDC businesses reported a profit of $1,000,000. It is expected that these profits
will grow by 20% per year (Matas, 2005). In 1994, the value of payments received from the
federal government exceeded self-generated commercial revenues. By 2003 self-generated
revenues greatly exceeded the $3.7 million received from the federal government. This
success prompted Chief Clarence to say “if all the federal funding dried up, we could still run
programs at the same level of service” (Matas, 2005, E7). This later statement serves to
illustrate the uses to which the profits of the OIBDC are put. Fully 60% go to fund
community programs of various types. The remaining 40% is reinvested in business
operations.
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Source of income data (Table 1) from the 1986 and 2001 census confirms the increasing
importance of employment income as a percent of total household income. In 1986,
employment income accounted for only 28.1% of total household income among members of
the OIB. By 2001, it had increased to 44.5%, an absolute increase of 16 percentage points and
a percent increase of 58%. Not yet self-sufficient, but clear progress towards the goal and a
considerable accomplishment.
Insert Table 1: Source of Income
Success on the employment front has been equally impressive as confirmed by selected
census data (Table 2). Between 1986 and 2001, the OIB participation rate increased from
34.6% to 46.2%, the unemployment rate fell from 29.6% to 9.3% and the employment rate
increased from 25.6% of the potential labour force (those 15 and older) to almost 42%.
Insert Table 2: Employment Data
While the gains made by the people of the OIB between 1986 and 2001 as a result of their
development efforts have been impressive, much remains to be done if the people of the OIB
are to achieve parity with the non-Aboriginal people of British Columbia as illustrated by the
comparative data presented in Table 3. For example, while OIB employment income as a per
cent of total income improved between 1986 and 2001, the resulting level of 44.5% is still
very low compared to the 75.8% level for the province as a whole. The same is true for the
participation rate and employment rates. While the OIB increase is a major achievement, the
2001 participation rate of 46.2% is far below the provincial rate of 65.2%. The 2001
employment rate of 42%, while a great improvement over the 1986 rate of 25.6%, is still
short of the provincial rate of almost 60%. Realizing the challenge that they still face, the
OIB are continuing their development efforts. The Nk’Mip Project, described in the next
section is the centrepiece of their ongoing efforts.
Insert Table 3: Comparative Performance—2001 Conditions
THE NK’MIP PROJECT
To begin our discussion of the Nk’Mip project, we will first examine wine and Aboriginal
tourism in general and in the Okanagan Valley. A third tourism—eco tourism—could have
been included but we feel we can accomplish our purposes without doing so. Examining wine
and Aboriginal tourism will help us understand the regime of accumulation and multifaceted
mode of social regulation that the OIB faced and faces as it identifies and exploits business
opportunities in pursuit of its development objectives.
Wine Tourism.
Globally, wine tourism continues to increase in popularity as wine lovers seek opportunities
to taste and buy wine in unique settings. Successful wine tour operations are not limited to
old world producers. In fact, new world wineries have enjoyed considerable success. In 1995,
Australia wineries had 5 million visits, as did the Napa Valley in California (Getz et al, 1999,
p.20). Robert Mondavi Winery alone has over 300,000 visitors annually.
The wine tourism industry is more than just wine tasting at a winery. Hall and Macionis
define it as the “…visitation to vineyards, wineries, wine festivals and wine shows for which
grape wine tasting and/or experiencing the attributes of grape wine region are the prime
motivating factors for visitors” (Hall and Macionis, 1998). Successful wine tourism regions
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have three things in common: (i) a well-deserved reputation for quality wines, (ii) a critical
mass of wineries catering to the wine tourist, and (iii) complimentary services and events.
As wine tourism grows some areas, particularly the Napa Valley, are experiencing high
volumes of tourists causing congestion, and in the opinion of some, over-commercialization.
According to Halliday “It (Napa Valley) witnessed exponential proliferation of wineries and
cellar operations which were in fact more concerned with selling cheap tourist baubles than
wine” (Halliday, 1999). As a result, it has become a ‘victim of its own success’ at least in the
minds those wine tourists for whom a quality wine experience is important. This creates an
opportunity for other wine regions to attract tourists interested in quality wines and quality
wine tours. A large number of such tourists is not essential. A small number of high-yield
tourists can support a region. High-yield customers are those who travel to a region
specifically for wine-related reasons and stay for an extended time. These customers are
looking for the complete wine experience.
Okanagan Valley wine Industry and tourism.
The Okanagan Valley is located in the south central part of the province of British Columbia,
Canada. The 124-mile long valley begins at the town of Osoyoos in the south and runs north
to Salmon Arm between the Cascade Mountains on the west and the Monashee Mountains on
the east. The valley has distinct microclimates that range from the hot, sandy, desert in the
southern valley to the cooler vineyard sites in the northern part of the valley. Chardonnay,
Merlot, Cabernet Sauvignon, Pinot Gris and Pinot Noir are commonly grown in the south,
while Pinot Blanc, Pinot Noir, Pinot Gris, Riesling and Gewurztraminer are grown in the mid
and northern regions. The mid and northern areas also produce the region’s famed ice wines.
Wine production is a growing industry in the Okanagan Valley. Len Bykowski, president of
the British Columbia Wine Institute in Kelowna, is quoted in the Calgary Herald newspaper
as saying “In 1990, we harvested 4,800 tons of British Columbia grapes, producing 2.9
million litres of wine. This year it’s anticipated to be 16,000 tons of grapes and 9.6 million
litres of wine” (Dolphin, 2002). As production has increased, so have the number of wineries.
In 1990 the Okanagan Valley had 14 wineries; today there are 72, compared to 200+ in the
Napa Valley. The region grows 15 to 25 percent of all grapes produced in Canada and has 10
percent of all country’s wineries.
The relatively small size of the wine producing sector in British Columbia forced the vintners
to recognize the need to differentiate themselves from Californian and European operations.
Many have sought to do so by producing high quality, distinctive wines. Ice wine is an
example of this differentiation strategy. In addition to high quality wine, the wineries of the
Okanagan strategy includes the construction of top-end facilities to attract potential
customers who may have gone to Napa Valley in the past.
For wine tourists, the Okanagan Valley is divided into the north tour and the south tour. The
north tour begins in the city of Kelowna and includes: Sumac Ridge Estate Winery, Hainle
Vineyards Estate Winery, Mission Hill Winery, Quails’ Gate Estate Winery, Pinot Reach
Cellars and Gray Monk. The largest winery of the north tour is Mission Hill, which had
100,000 visitors in 2001. The company is forecasting an annual 25 percent visitor growth
rate. For the past 22 years, the city of Kelowna has hosted the Okanagan Fall Wine Festival.
In 2002 the Festival attracted 125,000 people; a 44 percent increase from the previous year.
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The south tour begins 35 minutes south of the city of Penticton passing through the towns of
Okanagan Falls and Oliver and eventually ending in Osoyoos. The wineries most commonly
visited include; Inniskillin Okanagan Valley Vineyards, Hester Creek Estate Winery,
Gehringer Brothers Estate Winery, Tinhorn Creek Vineyards, Blue Mountain Vineyard and
Cellars and Hawthorne Mountain Vineyards. The town of Oliver is the self-appointed “wine
capital of Canada”. The claim has some credibility as Oliver is surrounded by 13 wineries.
Fifty percent of British Columbia’s wine production comes from wineries located between
Osoyoos and Oliver.
Nk’Mip Cellars is the southern most winery on the south tour. It is strategically located at the
junction of the valley’s north-south highway (the wine route) and a major east-west
transportation route leading from recreation areas in eastern British Columbia and the rest of
Canada to Vancouver on British Columbia’s Pacific coast. Nk’Mip Cellars is the first winery
travellers will encounter entering the Okanagan Valley from the south, the last they can visit
leaving the valley to the south and it is the only winery directly accessible to travellers on the
east-west route. An ideal location.
It is not just the award-winning wines and quality wineries that draw people to the Valley, but
also the beautiful scenery, agreeable climate and numerous outdoor adventure opportunities
such as horseback riding, bicycle tours, mountain biking, golfing and hiking. The region,
without the wineries, is considered an ideal vacation destination. This leads us to a discussion
of Aboriginal/eco tourism, the second opportunity being pursued by the OIB.
Aboriginal Tourism
According to the Government of Canada Department of Industry, in 2000 the tourism
industry in Canada was valued at $54.1 billion and employed almost 550,000 people.
Aboriginal tourism accounted for less than 1 percent of this total generating $300 million
annually and employing 16,000 people in an estimated 1,500 Aboriginal owned and operated
businesses. Forecasts predict that Aboriginal tourism annual revenue will rise to $1.9 billion
within a decade. In comparison, in New Zealand there are 150 Maori-owned tourism
businesses, while in Australia there are 200 Aborigine-owned businesses with annual sales
totalling $130 million.
Currently, the vast majority of tourists utilizing Aboriginal tourism businesses are from
Canada and the United States. However, recently Canadian Aboriginal tourism has been
generating significant interest from travelers in Europe (Williams and Richter, 2002). This
European interest in Aboriginal sites and attractions, while promising, is constrained by
limited market awareness of Aboriginal tourist destinations and poor access to effective
distribution intermediaries.
In spite of the general low awareness level of Canadian Aboriginal tourist destinations in the
European market, there are 30 tour operators in France that include Aboriginal destinations in
the packages they offer to customers, and another 30 in Germany. These tour operators
indicate some difficulty selling stand-alone Aboriginal destinations. Instead, they find that
such destinations can be an important as value added component of larger tour packages that
include non-Aboriginal attractions as well. This issue is a significant concern because 70
percent of Europeans, when traveling internationally, employ the services of a tour operator
(Williams &Richter, 2002). To generate awareness of Aboriginal tourist destinations among
European tourists, marketing efforts must be directed at tour operators and through them to
their customers. These marketing efforts should highlight the Aboriginal lifestyle and culture,
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in conjunction with the themes of nature, history and adventure in Canada; and this is the
intention of the OIBDC as it markets its tourism attractions, especially the Nk'Mip Desert and
Heritage Interpretive Centre and Nk’Mip Cellars.
The Project
Building on the foundation provided by its successful development activities to date, the
OIB’s current activities and future plans centre on a group of business activities together
called the Nk’Mip Project. Included in this $25 million project are (i) Nk’Mip Cellars, and
associated vineyards, (ii) a recreation vehicle park and campground, (iii) the $5-million
Nk'Mip Desert and Heritage Interpretive Centre, (iv) a residential resort that provides
ownership, in whole or in part, of 30 Villas and 64 Suites; and (vi) a new golf course opened
in May 2004. These ventures will be located on a 1,200-acre parcel of band land that adjoins
the town of Osoyoos and fronts on Osoyoos Lake.
The success of the project depends on successful participation in the wine tourism and
eco/cultural tourism market segments. Nk’Mip Cellars and the Nk'Mip Desert and Heritage
Interpretive Centre are the primary vehicles being developed to pursue this success.
The $5-million Nk'Mip Desert and Heritage Interpretive Centre is being developed to appeal
to the growing Aboriginal/eco tourism market by educating visitors about 3,000 years of
Osoyoos band history and the unique nature of the community’s desert environment. Chief
Clarence Louie says
The Desert and Heritage Centre is probably going to be our biggest business venture,
and it's going to combine all of those things that you see in a first class desert
interpretive centre–the educational stuff, the scientific stuff, the desert trails, the walks,
the scientific interpretive stuff … the other major component of it, which is really
special, is the uniqueness of the Okanagan First Nations, with the language and the
heritage and the cultural component to it.
As part of the appeal to that cultural/eco tourism market, the centre will preserve up to 1,000
acres of the unique dessert ecosystem. It will also work to restore habitat, and reintroduce to
the area species at risk.
The centre began operation in the temporary facility on June 13, 2002 with the gift shop half-
stocked and admission by donation. By July 15, the retail store was fully stocked and the
centre began charging full admission. Construction of the permanent building began in early
2005 with plans for it to be open for the 2006 season. As well, a start has been made on the
interpretive trails and a traditional Okanagan village has been built.
Nk’Mip Cellars, opened in September 2002, is the culmination of almost 35 years of Osoyoos
Indian Band involvement in the wine industry. The story begins in 1968 when in association
with Andres Wines Ltd; the OIB planted its first vineyard. This has grown into the 230-acre
Inkameep Vineyard, which provides high quality vinifera grapes to many of the wineries in
the Okanagan valley and some further afield. There are another 1,000 acres of vineyard on
Osoyoos land most in partnership Vincor International Inc. Vincor is Canada’s largest wine
producer and OIB’s joint venture partner in Nk’Mip Cellars. By the end of 2003, almost 25%
of the vineyard acreage in the Okanagan valley was on Osoyoos land.
The next phase of the OIB’s involvement in the wine business began in 1980 with the
erection of a building near the Inkameep Vineyard. T.G. Bright & Co. (now Vincor) leased
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for 25 years and equipped it as a winery. The lease has since been extended and the winery is
undergoing a $10-million renovation. Speaking of the company’s ongoing relationship with
the Osoyoos Indian Band, Donald Triggs of Chief Executive Officer of Vincor says
We have a very long and important relationship with the Band. Two-thirds of the
employees in the Oliver winery are from the band. Our relationship goes back 25 years.
Our winery is on band land. We now have vineyards developed on band land of over
800 acres. Our future in the Okanagan is very much intertwined with the future of the
band (Schreiner, 2002).
According to Julianna Hayes, the relationship between Vincor and OIB is
a business partnership pure and simple. Vincor get access to vineyards in one of the
hottest and richest growing climates in Canada. The Osoyoos Band gets the resources
to develop their land and obtain a piece of an emerging industry (Hayes, 2002).
Nk'Mip Cellars opened on Sept 13, 2002. The $7-million project includes the 18,000 square
foot winery and a 20-acre vineyard. It is North America's first Aboriginal winery, and the
second in the world (a Maori-owned winery opened in New Zealand in 1998). The OIB
provided an operating line of almost $1-million and $2-3-million from various federal
agencies, and for this investment owns 51% of the venture. Vincor invested $3-million and
owns 49%. At least as important as the money is Vincor’s expertise. As Don Triggs, Vincor's
chief executive says. "We have shared with them everything that we know in design of the
winery, in processing and in managing hospitality (Schriener, 2002)”. Vincor will be the
managing partner in Nk'Mip for 10 years, after which it can sell its interest to the OIB.
With a capacity of 18,000 cases, the Nk’Mip winery is not large. As Don Triggs says “we've
not targeted it to make large quantities of wine. The real objective here is to make small
quantities of very high-end wine” (Schriener, 2002). Nk'Mip currently produces are
Chardonnay, Pinot Blanc, Pinot Noir and Merlot, exclusively from grapes from the Inkameep
Vineyard
. Nk'Mip expects to sell at least 40% of this output to wine tourists visiting the
winery. Most of the remaining production will be distributed through Vincor’s marketing
channels to restaurants and specialty wine stores and the international market.
The Band has developed a strategic alliance with Bellstar Hotels & Resorts to develop the
Spirit Ridge Vineyard Resort and Spa, a $22 million-dollar four star resort—one of only nine
four star rated resorts in British Columbia (Spirit Ridge, 2005). Located adjacent to the
winery and interpretive centre, it will play an integral role in the success of the Nk’Mip
Project. Construction is underway. The resort and spa opened 30 villas for operation in fall of
2005 and completely sold out all late 2005. When fully operational the project will consist of
34 villas and 64 suites.
Results to Date
2
From its opening in June 2002 to September 30
th
, the Nk'Mip Desert and Heritage
Interpretive attracted 3865 visitors. Nk’Mip Cellars did not open until September 2002, six
months later than planned, so the visitors that came were attracted solely by the centre. Total
revenue for the period was $52,000, 61% ($31,700) from gift shop. There were
approximately 7,000 visitors to the Centre during the 2003 season in spite of serious forest
2
Note to reviewers and editors. Should this paper successfully survive the review process, we
will update the results to date to include 2006 as soon as this information is available.
USASBE 2008 Proceedings - Page 26

21
fires, which limited tourism in the region in late summer, and 9,000 in 2004. Projections are
for 20,000 visitors in 2006 when the new building is open.
Between September 13, 2002 (opening day) and December 31, 2002, Nk’Mip Cellars
received 5,642 visitors. During the 2003 season, the winery hosted more than 20,000
increasing to 34,000 visitors in 2004. In addition to its success in attracting visitors, Nk’Mip
Cellars had won recognition for the quality of its wines. In 2002, its pinot noir and
chardonnay both one gold medals at the All Canadian Wine Championship in Ontario and at
Vignobles Nationaux in Montreal. Its 2004, its 2002 merlot won a silver medal at an
international competition at the Los Angeles County Fair (Matas 2005). And as mentioned
earlier, the Spirit Ridge Vineyard Resort and Spa opened and completely sold out 30 villas by
late 2005.
Finally, it is important to note that the people of the OIB are not the only ones benefiting
from their successful development efforts. There are important spillovers to the surrounding
non-Aboriginal communities, and the region as a whole.
CONCLUSION
As described, the development activities of the OIB have been a great success. The
community is central to this success in many ways. The land that is the foundation of the
project is community-owned. The OIBDC’s businesses are also community-owned and while
the management of the business is in the hands of the OIBDC, the OIBDC is under the direct
and close control of the community leaders—the Chief and Council–thus ensuring that
bonding and bridging social capital work in harmony. This translates into an effective local
mode of social regulation.
It is also clear that the process the OIB has adopted to achieve their purposes involves ‘opting
in’ to the global economy. The OIB is creating and operating businesses that can compete
profitably over the long run in the global economy to exercise the control over activities on
traditional lands and build the economy necessary to preserve and strengthen communities
and improve socioeconomic conditions. To do so they have formed alliances and joint
ventures with non-Aboriginal partners, particularly Vincor and Bellstar Hotels & Resorts, to
create businesses that can compete profitably in the global economy.
The result has been the emergence of a mode of development that includes an effective mode
of social regulation that permits that allows the OIB to participate in the successfully in the
global regime of accumulation, on their own terms. Or to switch terminology, they have
developed and are practising a very effective form of non-market entrepreneurship And if
OIB can do so; why not for other Indigenous communities; indeed all communities?
We can answer this question with a qualified yes they can and are based on the activities and
outcomes of other Indigenous communities in Canada and elsewhere (Anderson, 2002; Dana,
Dana and Anderson, 2005; Hindle and Lansdowne, 2005; Camp, Anderson and Giberson,
2005; Hindle et al, 2005; Anderson et al 2004; and Galbraith et al, 2006). And, we are
exploring this question in greater depth by conducting a multi-case study of communities in
Norway, Russia, Sweden, Canada, the United States, Africa, Mexico, Latin America,
Australia and New Zealand.
USASBE 2008 Proceedings - Page 27

22
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Figure 1: The Characteristics of Aboriginal Economic Development
The Aboriginal approach to economic development is:
1. A predominantly collective one centered on the community or ‘nation’.
For the purposes of:
2. Ending dependency through economic self-sufficiency.
3. Controlling activities on traditional lands.
4. Improving the socioeconomic circumstances of Aboriginal people.
5. Strengthening traditional culture, values and languages (and the reflecting the same in
development activities).
Involving the following processes:
6. Creating and operating businesses that can compete profitably over the long run in the
global economy to
a) Exercise the control over activities on traditional lands
b) End dependency through economic self-sufficiency.
7. Forming alliances and joint ventures among themselves and with non-Aboriginal
partners to create businesses that can compete profitably in the global economy.
8. Building capacity for economic development through: (i) education, training and
institution building and (ii) the realization of the treaty and Aboriginal rights to land
and resources.
9. Strengthening bonding and building social capital.
Adapted from Anderson, 1999
Figure 2: Community Responses to the Global Economy
Opt-out Opt-in
Participate in the global economy
Transform Global Economy
Radical transformation
no transformation
1
2 3
4
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Figure 3: Modes of Development
The ‘Indigenous
Community’
Corporations as
principal actors
in the global
economy
unconditional
participation
assertively prgamatic
participation
transformational
participation
resistance and non-
participation
Indigenous people
as neither potential
or threat
Indigenous people as
a problem or threat
Indigenous people as
potential strategic
partners/resource
The ‘Global Economy’
(The Regime of Accumulation and multiple, overlapping
Modes of Social Regulation)
Modes of Development
Integrating,
transforming
and
excluding
mechanisms
outcomes
outcomes
1
3 2
4
The “State”
(subnational, national &
supranational)
The “Civil Sector”
Figure 4: Osoyoos Indian Band Goals
to increase the level of education in the following areas: academic, athletic, vocational
and cultural - and that this responsibility will be shared by the Band, parents and
students to be motivated to life long learning.
to decrease the dependency on government funding through increased level of self-
generated income, joint ventures, leasing, land and resource development so that
economically we can one day be self-sufficient.
to develop programs that reduce dependency and create community involvement that
brings back the traditional Indian concepts of honour, caring, sharing and respect.
to promote a well disciplined organization that will reduce the political influence
within the Band and its agencies.
to increase the standard of living opportunity for every Osoyoos Indian Band
Member.
From http://www.oib.ca/mission.htm
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Table 1: Source of Income
1986 2001
numeric
increase in %
%
change
Employment income (% of household income) 28.1% 44.5% 16% 58%
Source: 2001 Canadian Census
Table 2: Employment Data
1986 2001
numeric
change
%
change
All 15 years and over 390 465 75 19%
In the labour force (all 15 years & over) 135 215 80 59%
Employed (all 15 years & over) 100 195 95 95%
Unemployed (all 15 years & over) 40 20 -20 -50%
Participation rate (all 15 years & over) 34.6% 46.2% 12% 33%
Unemployment rate (all 15 years & over) 29.6% 9.30% -20% -69%
Employment Rate 25.6% 41.9% 16% 64%
Source: 2001 Canadian Census
Table 3: Comparative Performance—2001 Conditions
Osoyoos
British
Columbia
Employment income (as a % of household income) 44.5% 75.8%
Participation rate (all 15 years & over) 46.2% 65.2%
Unemployment rate (all 15 years & over) 9.3% 8.5%
Employment Rate 41.9% 59.6%
Source: 2003 Canadian Census
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