The Importance of E-commerce in Indian Country

According to new research by Dr. Eric Trevan, a professor of public administration at Evergreen College in Washington State, e-commerce is vital for Indian Country, particularly for tribes located in rural areas. In fact, each native e-commerce business could spark an additional $1 million in economic activity in Indian Country.

Dr. Trevan analyzed data from the Bureau of Economic Analysis and the U.S. Census Bureau. He used counties that interact with Native lands as a proxy for reservation related economies. According to Dr. Trevan, “Using a sample of 591 counties that intersect with Indian lands, we are able to research ecommerce, GDP and the impacts of human capital.”

Together, these reservation-related economies encompassed $3.6 trillion in reservation-related Gross Domestic Product (GDP) and 20 percent of the total U.S. population.

“Results include that every new ecommerce related business has a positive impact of $1,144,000 on GDP,” said Dr. Trevan. “Additionally, each ecommerce related job has a positive significant impact of $392,000 and each additional individual in the reservation related economies has a positive significant impact of $289,000.”

In other words, e-commerce has been crucial to the tribal economies, especially for remote tribes that are not near large population centers that make it “difficult to achieve agglomerative benefits to improve economic conditions.”

In the study, Dr. Trevan provides three recommendations for tribes to fully realize the benefits of e-commerce:

• First, policymakers need to prioritize higher education in order to have the human capital needed to manage e-commerce businesses;
• Tribes should develop and implement an e-commerce strategy with local businesses and public services that support local ecosystems that can generate jobs and revenue; and
• Tribal nations should exercise their “sovereignty and utilize their competitive advantages.”

If these recommendations are followed, e-commerce could provide even more benefits than it has already provided.