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Native corporations contribute much to Alaska's prosperity, and there's potential for more

  • Author: Gerad Godfrey
  • Updated: June 29, 2016
  • Published December 14, 2015

As Alaskans, there are many benefits this great land provides us through its beauty, open spaces and natural resources. Another unique feature our state can claim is the economic and social might of Alaska Native corporations for which there is no parallel outside Alaska.

In 1971, the Alaska Native Claims Settlement Act created Alaska Native corporations as an alternate model to the reservation system of the Lower 48. This congressional act conveyed nearly a billion dollars and 44 million acres of land to 12 regional corporations and more than 200 village corporations. Between the 12 regional Alaska Native corporations, there are approximately 120,000 shareholders who hold roughly 12 percent of the total land in Alaska.

The concept driving ANCSA was that Native corporations would utilize the money and land resources conveyed to them to engage in the capitalistic marketplace in order to provide profits to care for the social, cultural and economic benefit of their shareholders in perpetuity. Native corporations have done this by participating in a wide array of business sectors varying from construction, real estate, tourism, securities, IT, alternative energy, oil/gas, education, financial lending services, government contracting, resource development and virtually every other business sector. Today, their remarkable level of success has resulted in 20 Native corporations making Alaska Business Monthly's 2015 Top 49ers list, which rates the 49 most successful Alaskan-owned businesses based on revenue. This includes all 12 regional corporations and eight village corporations.

Not only do Alaska Native corporations compete in virtually every major industry, they do so with exceptional results. While a typical organic company competing in a given industry tends to remain within that industry, or closely related industries, in contrast, a single Native corporation will commonly compete in numerous unrelated industries through its subsidiaries. In fact, Native corporations often compete with various titans of industry across numerous unrelated business sectors. As a business model, this is generally unconventional, but among Native corporations it has been widely successful.

In addition to acting as powerful drivers in our state's economy, Native corporations provide direct benefits to their shareholders in the form of employment, scholarships, dividends, internships, apprenticeships and numerous other categories of benefits. Because Native corporations are headquartered in Alaska, they provide many administrative and support positions here for business operations outside Alaska. If Native corporations were not headquartered here, the vacuum they would leave would go largely unfilled. Jobs provided outside of Alaska allow Native corporations to bring the profits from those services performed back into Alaska, which is a contrast to most corporations employing large work forces in Alaska, as those corporations are rarely headquartered here and thus their profits leave Alaska.

The post-secondary education system in Alaska has seen the rare value and benefit Native corporations provide to the state. Recently, Alaska Pacific University developed a graduate-level certificate program called the Alaska Native Executive Leadership Program, and the University Alaska Anchorage developed an Alaska Native studies minor. In October, UAA held its first annual Alaska Native Business Summit to a full house and the interest indicated there is a hunger to learn more about the unique business model of these corporations and the opportunities they present for Alaskans.

It's hard to imagine our state without the existence of Alaska Native corporations, as there would be numerous empty buildings and collective city blocks without anything occupying them. Companies headquartered outside Alaska would not migrate here to fill the void. Fortunately the public, business and educational sectors recognize the value of Native corporations. Yet they can provide even greater value.

Native corporations pay millions of dollars in state taxes and their aggregated revenue represents the equivalent of 25 percent of the Alaska's GDP. Despite their collective success and the immense benefit they provide to Alaska, Native corporations have yet to be maximally utilized as an economic and social resource in the state. Non-Native corporation entities may do well to look to Native corporations as investors and partners in both financial and business ventures. State, borough and municipal governments may benefit from engaging Native corporations to a greater degree in creative initiatives and ventures seeking mutually beneficial outcomes. The state's education system should continue to develop programs that focus on educating and training students specifically to work for Native corporations or do business with them while providing a greater understanding of what makes them unique in the business world and the exclusive benefits they can provide the state.

With the current fiscal situation, the ongoing success and growth of Native corporations is more important than ever as they are a uniquely Alaska resource and are a critical component of ensuring a sustainable future for our state.

Gerad Godfrey is senior advisor for Rural Business and Intergovernmental Affairs in the Cabinet of Gov. Bill Walker.

The views expressed here are the writer's own and are not necessarily endorsed by Alaska Dispatch News, which welcomes a broad range of viewpoints. To submit a piece for consideration, e-mail commentary@alaskadispatch.com

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