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Indigenous Entrepreneurship, Society, and the Dimensions of Diversity: An Overview of the Canadian National Context

Francesca Croce

Diversity within Diversity Management

ISBN: 978-1-78754-821-3, eISBN: 978-1-78754-820-6

ISSN: 1877-6361

Publication date: 10 April 2019

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Croce, F. (2019), "Indigenous Entrepreneurship, Society, and the Dimensions of Diversity: An Overview of the Canadian National Context", Diversity within Diversity Management (Advanced Series in Management, Vol. 21), Emerald Publishing Limited, pp. 359-371. https://doi.org/10.1108/S1877-636120190000021017

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Copyright © 2019 Emerald Publishing Limited

Introduction

Indigenous groups make up a minority of the peoples living on the five continents (United Nations, 2009). They are identified as the first inhabitants of a territory and have experienced colonization (Peredo, Anderson, Galbraith, Honig, & Dana, 2004). As a consequence of this process of colonization and domination, indigenous peoples still face discrimination and social barriers in various contemporary societies (Dana & Anderson, 2007).

From a sociocultural standpoint, there is great diversity among indigenous groups (United Nations, 2009). This high level of diversity renders the classification of indigenous peoples rather complex. The United Nations recognizes about 5,000 indigenous groups globally (United Nations, 2009). Thus, there are so many indigenous groups, representing so many cultures, languages and indigenous identities, that according to the United Nations, the issue is better considered in terms of self-identification in which indigenous peoples identify themselves as being part of an indigenous group (United Nations, 2009).

Importantly, regarding indigenous peoples, diversity is not only inherent to the differences between indigenous groups and indigenous cultures, but also to the national context in which indigenous peoples are situated. Indigenous groups are found in both developing countries in Africa and Asia and in developed countries such as Canada, Australia, and the United States. These countries vary greatly in terms of economic growth, socio-economic development and institutional orientation.

As a consequence, when conducting a sociological analysis of the issues facing indigenous peoples, some structural features must also be considered in the contextual analysis in order to consider the different national global contexts. Despite sharing a common experience of discrimination, colonization, and abuse, we must keep in mind certain historical aspects regarding the different ways indigenous peoples have evolved depending on their specific country (e.g., Armitage, 1995) and which still affect how indigenous peoples live in these countries and practice entrepreneurship. While Indigenous Entrepreneurship (IE) refers to globally recognized entrepreneurial practices (Croce, 2017; Dana & Anderson, 2007), there are certain unique features in each nation depending on the social aspects and structural factors of the societies at the national level.

IE in Canada is a growing entrepreneurial phenomenon (Canadian Council for Aboriginal Business, 2016; Flanagan, Alcantara, & Le Dressay, 2010) and the government supports it (e.g., Aboriginal Business and Entrepreneurship Development – ABED – Indigenous and Northern Affairs Canada).

The current IE boom has been identified as a strategy for improving the condition of Aboriginal peoples all across the country. In fact, in recent years, there has been a growing interest in the situation of Aboriginal peoples in Canada and entrepreneurship seems to provide a potential solution for indigenous peoples who are still facing poverty and social discrimination (e.g., Anderson, 1999, 2001). Inspired by this emerging phenomenon and its importance in the Canadian context, this chapter aims to explore how diversity in this particular context affects the practice of IE.

Thus, this chapter aims to offer an overview of IE in the specific context of Canada. Even though IE is practiced everywhere and certain global entrepreneurial models have been identified (e.g., Croce, 2017), IE must also be analyzed and contextualized in the specific frameworks that are represented by the national contexts globally.

There are some specific features that indigenous entrepreneurs face that non-indigenous entrepreneurs do not. Taking into account diversity in the particular Canadian context, which is identified across three dimensions: (1) the cultural dimension, (2) the institutional dimension, and (3) the financial dimension, a contextual analysis is offered in this chapter for the Canadian context.

After the introduction, this chapter is organized as follows: The first section introduces IE research and demonstrates how this research theme has been incorporated into the scientific literature on entrepreneurship and how it has managed to distinguish itself as a research field. The second section introduces the main indigenous groups of Canada, the Canadian IE perspective and the three dimensions of diversity. In the discussion, the relationship and interactions between these dimensions are analyzed in relation to IE in the Canadian context. This chapter’s main contribution is to explore the IE frameworks at the national level. In the conclusion, the research avenues and limitations will be explored.

Indigenous Entrepreneurship Research Area

In the literature, IE has been defined as “the creation, management and development of new ventures by Indigenous people for the benefit of Indigenous people” (Hindle & Lansdowne, 2005, p. 132). According to this definition, IE is an entrepreneurial business venture adopted by a particular category of people, indigenous people, for the purposes and objectives of indigenous peoples. Even so, it has been argued that IE goes beyond this restricted definition and also encompasses the traditional economic activities of indigenous peoples other than simple business creation (e.g., Croce, 2017; Dana & Anderson, 2007).

Even though it represents a recent research topic, the analysis of IE in the literature is not new. The first IE studies appeared in the past two decades (e.g., Anderson, 1997, 1999, 2002; Anderson, Honig, & Peredo, 2006; Dana & Anderson, 2007; Dana, 1995, 1996, 2007, 2010, 2015; Foley, 2003, 2008). From a practical perspective, these first IE studies focused on the socio-political attention dedicated to indigenous peoples. In fact, indigenous peoples still face difficult living conditions and social problems including marginalization, language barriers, poverty, violence, low educational attainment, abuse and land grabbing (e.g., Wood & Davidson, 2011). The major international development organizations, such as the United Nations and the World Bank, have also recognized the importance of indigenous issues worldwide.

Within IE, therefore, entrepreneurship is identified as a lever for socio-economic development of this population (Anderson, 2001; Hindle & Lansdowne, 2005; Hindle & Moroz, 2009; Peredo et al., 2004). For example, the Harvard Project on American Indian Economic Development (1987), set up by two professors from Harvard University (Cornell & Kalt, 2000), aimed to understand the determining factors for the socio-economic development of indigenous communities in the United States.

Beyond the socio-political circumstances that contribute to the emergence of IE’s analysis, another aspect can be established to contextualize IE’s origin at the theoretical level. Over the last two decades, the research theme of Social Entrepreneurship (SE) has emerged (e.g., Austin, Stevenson, & Wei-Skillern, 2006; Sengupta, Sahay, & et Croce, 2017; Peredo & McLean, 2006; Roberts & Woods, 2005; Zadek & Thake, 1997), which is defined as entrepreneurial activities with social objectives (Fayollle & Matlay, 2010) or with a social mission (Peredo & McLean, 2006). Therefore, SE differs from commercial entrepreneurship because, while commercial entrepreneurs have a financial goal, social entrepreneurs have a social goal (Austin et al., 2006; Roberts & Woods, 2005).

SE has emerged as a new approach to addressing the social problems of populations and to cope with reduced funding for public initiatives (Sengupta, Sahay, & et Croce, 2017). A social enterprise is a business which may conduct lucrative activity but whose goal is to meet the needs that the entrepreneurs have identified within society. In sum, the main characteristic of SE is the creation of social value rather than economic value at the individual level (e.g., Zadek & Thake, 1997).

As IE seems to focus on the socioeconomic development of indigenous communities, IE can be contextualized within the broader research theme represented by SE. For example, Tapsell and Woods (2008a, 2010) have argued that IE has an important role to play in the theoretical development of SE. Anderson et al. (2006) explained that IE is a form of entrepreneurship that exists at the intersection of social and economic entrepreneurship.

The Aboriginal Peoples of Canada: Society and Diversity within Diversity

The Canadian constitution (1982) recognizes three groups of Aboriginal peoples, the Indian, the Metis and the Inuit peoples of Canada. According to Statistics Canada (2016), Aboriginal peoples represent about 4.9% of the total Canadian population. The majority of Aboriginal peoples in Canada identify as First Nations, totaling about 977,230 (Statistics Canada, 2016). The Metis represents about 587,545 people (Statistics Canada, 2016) followed by the Inuit, who make up a minority at 65,025 (Statistics Canada). The majority of First Nations people hold registered Indian status and live on reservations (Statistics Canada, 2016). Most Inuit people live in the Inuit Nunangat in the four Inuit regions of Northern Canada, specifically, Nunavut, Nunavik, Inuvialuit, and Nunatsiavut.

Even though indigenous groups represent a minority of Canadians, they also represent a growing population when compared to the non-indigenous population (Statistics Canada, 2016). According to Statistics Canada, from 2006 to 2016, the indigenous population increased by 42.5%. Moreover, this population is also young, with an average age of 32 years old (Statistics Canada, 2016). Within these groups, there is also great linguistic diversity: more than 70 indigenous languages are spoken across Canada (Statistics Canada, 2016). Canada is home to over 50 First Nations groups and more than 630 First Nation communities (Indigenous and Northern Affairs Canada website – Government of Canada).

Indigenous peoples are part of Canada’s history (e.g., Morton, 2017). Specifically, this history was one of colonization regarding the indigenous peoples within the Canadian society and the assimilation policies that have been implemented. The cultural appropriation inherent to the colonization process (Henderson & Wakenham, 2009) was represented by a policy of Indian assimilation and Indian protection (Leslie, 2002). However, this process of colonization has been considered a form of cultural genocide (MacDonald, 2007). Indigenous residential schools (IRS) – (MacDonald, 2007; Stanton, 2011) were established (from the mid-1880s until the 1970s) which housed more than 100,000 indigenous children (MacDonald, 2007). The Royal Commission on Aboriginal Peoples and Truth and Reconciliation Commission of Canada (TRC) is a commission established for the purpose of documenting the impact of residential schools (Royal Commission on Aboriginal Peoples, 1996; Niezen, 2013).

The Indian Act, passed in 1876 and still in effect today, had a complex evolution (Leslie, 2002). With the Indian Act, the government outlined the criteria an individual must meet to be considered an Indian and hold Indian status. It also outlined the legal rights according to Indians and the administration of reservations with the formation of Band Councils. However, the Indian Act does not apply to the Inuit or Metis peoples, even though the Canadian Constitution recognizes three groups of Aboriginal peoples (Indians, Metis, and Inuit). Inuit peoples have a long history of land claims and striving for self-determination (e.g., Dahl, Hicks, & Jull, 2000), whereas the Metis has been also recognized as Aboriginal peoples of Canada (e.g., Andersen, 2011).

Regarding the practice of entrepreneurship, how is this practice shaped by the diversity represented among the Aboriginal peoples of Canada as compared to the non-indigenous population? How does the history of indigenous peoples and their colonization still affect the current expression of this entrepreneurship? The answers to these questions are complex when considering the diversity within diversity that defines the indigenous peoples of Canada. Nonetheless, it is possible to offer an overview of IE in Canada that takes into account the scope of this diversity and its multiple dimensions in society. When analyzing IE, diversity is not only a key concept because of the diversity among indigenous peoples, but also because of the historical and structural features of the context in which they are located.

Thus, this chapter provides a contextual analysis. Indigenous peoples represent diversity within Canadian society, and this diversity has been analyzed at different levels. The dimensions of diversity have been taken into consideration to offer an overview of the analysis of IE that could serve further discussions and inform the management of diversity regarding IE across national contexts. A review of the literature has revealed specific dimensions. When these are examined individually and together, they offer a unique analysis and perspective of IE in the Canadian context which takes into account both the ambitions of indigenous entrepreneurs as individual and the features of the context in which they live. These features are the outcomes of history, the process of colonization and the concrete opportunities indigenous peoples have for practicing IE across the national contexts.

The Sociocultural Dimension of IE in Canada

Despite the differences between the Aboriginal groups living in Canada (Statistics Canada, 2016), these three groups share some common challenges within Canadian society. As in almost every society where indigenous peoples live, indigenous peoples must strive for their rights and self-determination. The issue of recognition as indigenous peoples within Canadian society is also very important (e.g., Coulthard, 2007). When it comes to IE in Canada, one of the most important aspects to highlight is the sociocultural aspect affecting its expression. Aboriginal peoples have undergone a process of colonization which has led them to a condition of marginalization and inferiority over the years.

In fact, IE in the contemporary Canadian context has been identified as a strategy for indigenous communities to overcome the poverty they face (e.g., Anderson & Giberson, 2003). This is connected to the social situation experienced by the majority of the Aboriginal peoples of Canada, specifically, the First Nations living on Indian reserves. The indigenous peoples of Canada also still face discrimination and marginalization resulting from structural barriers in society (e.g., Barsh, 1994). Therefore, the first dimension that emerges in the analysis of IE in the Canadian context is the sociocultural dimension.

In both their practices and outlook, indigenous and non-indigenous entrepreneurs differ with respect to entrepreneurship. Many studies support the assertion that indigenous entrepreneurs are influenced by their values, norms, and worldviews (e.g., Dana & Anderson, 2007).

Although there are many indigenous cultures in Canada, they share a particular worldview and certain common values. Indigenous entrepreneurs seem to be mainly motivated by non-economic factors rather than economic ones (Lindsay, 2005). In this perspective, for indigenous entrepreneurs, the well-being of community members is more important than individual profit (e.g., Anderson & Giberson, 2003). Indeed, one of the main motivations identified is to ensure socio-economic development to improve living conditions and promote social well-being and a sense of belonging in their communities (Lindsay, 2005; Lituchy et al., 2007; Tapsell & Woods, 2008b; Wood & Davidson, 2011).

Entrepreneurship is linked to indigenous identities and there is a need to support IE while respecting indigenous values and cultures (e.g., Chapman, McCaskill, & Newhouse, 1992; Gallagher & Lawrence, 2012). It is also important for indigenous peoples to see how their values can take shapes through indigenous business development (e.g., Anderson & Giberson, 2003; Anderson, Kayseas, Dana, & Hindle, 2004).

The Institutional Dimension of IE in Canada

Another important aspect affecting the expression of IE in Canada relates to the political dimension. Some Aboriginal peoples in Canada (except for the Inuit, Metis and non-status Indians) are still subject to the Indian Act, created in 1876 by the Canadian Parliament under the British North America Act of 1867. The Indian Act defines the Indian status, their legal rights and the administration of reservations with the establishment of Band Councils, which replaced the various forms of indigenous governments that existed prior to colonization.

With the creation and establishment of the Band Council (1867), the government affected indigenous entrepreneurial development. Bherer and colleagues (Bherer, Gagnon, & Roberge, 1989) explained some of the institutional constraints associated with IE in Canada, including the Indian Act and its economic and legislative implications, highlighting how the legislative framework had an enormous impact on the lives of indigenous entrepreneurs. For example, the Band Council influences the entrepreneurial activities and choices of individual entrepreneurs because, in certain remote communities, it acts as a collective entrepreneur by setting up business communities (Bherer et al., 1989). The Band Council can play an important role in land claims and bargaining processes that result in significant economic spin-offs for these indigenous business communities (Anderson et al., 2004). Another important issue is access to the land and property held by the Band Council and the limited space on the reservations (Cachon, 2000).

Governance and political aspects that affect IE include Band Councils that influence entrepreneurial activity at different stages (Bherer et al., 1989; Kayseas, Hindle, & Anderson, 2006), as the lack of community support for business creation projects (e.g., Weir, 2007). Regarding the Indian Act, it curbs off-reservation Aboriginal economic contributions because it limits commercial transactions and loans (Kayseas et al., 2006). For example, because of the unseizable goods on the reserves, it is difficult for indigenous entrepreneurs to obtain a bank loan from conventional financial institutions (Kayseas et al., 2006). Entrepreneurship for the Aboriginal peoples of Canada is, therefore, limited by property rights issues (Flanagan et al., 2010).

The Financial Dimension of IE in Canada

When it comes to entrepreneurship, access to both social and financial capital is important for entrepreneurs. However, the Aboriginal peoples of Canada still have limited access to information networks on business opportunities specific to Aboriginal entrepreneurs and social capital (e.g., Cachon, 2000). In addition, Aboriginal peoples also face significant barriers accessing financial capital (e.g., Ferrazzi, 1989; Ketilson, 2014; Lituchy, Oppenheimer, O’Connell, & Abraira, 2007).

Literature underlines that access to capital and funding opportunities represents one of the major barriers to IE in Canada (Anderson, 2002; Ferrazzi, 1989; Ketilson, 2014; Lituchy et al., 2007; Weir, 2007) as this involves access to traditional financial banking systems and attracting investors onto reserves (e.g., Cachon, 2000). This is because the unseizable goods on the reservation make it difficult for Aboriginal entrepreneurs to obtain a bank loan from conventional financial institutions (Cachon, 2000; Kayseas et al., 2006).

Regarding access to capital, resources, and expertise, partnership with non-Aboriginal institution seems to present a good solution (e.g., Boyd & Trosper, 2009; Ferrazzi, 1989). Even though indigenous entrepreneurs have limited access to funding when compared to non-indigenous entrepreneurs across the country, there are some specific institutions, such as the Aboriginal Financial Institutions, that provide financial access to indigenous entrepreneurs (Indigenous and Northern Affairs Canada). However, access to funding still remains one of the main issues that must be improved when it comes to Aboriginal businesses in Canada (Canadian Council for Aboriginal Business, 2016).

Discussion

This chapter has provided an analysis of IE in the Canadian context that considers the diversity, sociocultural, institutional and financial dimensions. This analysis supports the idea that IE should be analyzed in a systemic and contextualized manner (e.g., Hindle, 2010; Welter, 2011) and should be thought of as a process.

In reference to the World Bank’s definition, Peredo et al. (2004) point out specific factors that need to be considered when it comes to indigenous peoples. These include 1) a “close attachment to ancestral territories and the natural resources in them; 2) the presence of customary social and political institutions; 3) economic systems primarily oriented to subsistence production; 4) an indigenous language, often different from the predominant language and 5) self-identification and identification by others as members of a distinct cultural group” (Peredo et al., 2004, p. 4).

Thus, beyond all the cultural aspects specific to indigenous peoples and having a significant impact on their entrepreneurial practices (Foley, 2008), it is important to take into account the legislative, political and territorial aspects specific to certain indigenous populations (e.g., Cornell & Kalt, 2000). IE in Canada is characterized by the complex interaction of all of these aspects, which in one way or another determine the choices made by indigenous entrepreneurs or aspiring indigenous entrepreneurs and the development of their business.

Above all, when it comes to IE, the developed economies paradigm as a base for entrepreneurship needs to be reconsidered. This is because indigenous entrepreneurs are not only creative individuals bringing innovation to the economy in the Shumpeterian sense – tending towards opportunity identification – they are also individuals responding to personal or social objectives.

The indigenous entrepreneur’s social and cultural environment can influence the form of their entrepreneurship and the conception of the indigenous entrepreneur’s social desirability (Bherer et al., 1989). In a way, this represents a paradigm shift when it comes to approaching IE, as most entrepreneurial theories developed to explain entrepreneurial behavior are not adequate for understanding IE.

Studies of IE have shown how the indigenous values, context, and social norms influence the concept of entrepreneurship, which seems to be more socially oriented than economically oriented. For example, performance indicators (Djik, 1996), which are widely used in the entrepreneurial literature, such as growth factors, turnover and number of employees, are not very suitable for measuring the performance of some indigenous businesses.

Indigenous entrepreneurs do not necessarily have the same aspirations as non-indigenous entrepreneurs. Lindsay (2005) notes that indigenous entrepreneurs accord importance to interpersonal relationships and intangible values rather than to material values associated with wealth accumulation. Thus, it is important to recall that even if indigenous entrepreneurs are present on the five continents (Dana & Anderson, 2007) and different indigenous entrepreneurial models have been identified (e.g., Croce, 2017), there are some differences according to the national context. The financial and institutional dimensions analyzed in this chapter are a good example of cross-countries potential differences.

Conclusion

This chapter offered an overview of IE in the national Canadian context, taking into account this country’s history of colonization and its effects on contemporary Canadian society regarding the practices of Aboriginal peoples. This is particularly true with respect to the First Nations communities living on reserves. This analysis linked the sociological aspect of IE to the interrelated historical, sociocultural, political and financial dimensions.

However, the analysis presented in this chapter contains some limitations. Analyzing IE in the specific Canadian context is complicated by the diversity between the Aboriginal groups in this country. These include Indians – registered Indians and non-status Indians – Metis and the Inuit. Additionally, the Indian Act still affects the practices of indigenous entrepreneurs, particularly the First Nations peoples over of all living on the Indian reserves.

Future research should, therefore, attempt to provide a more in-depth dimensional analysis including these three groups of indigenous peoples and analyzing the similarities and differences between them. Exploring the above-mentioned dimensions within the three groups could be a good research avenue for better understanding IE in the Canadian context, particularly regarding the Metis, non-status Indians, and urban Aboriginals. Nonetheless, analyzing the IE framework in contemporary societies is an interesting research avenue that must be explored, not only to compare the differences between developing and developed countries, but also within various developed countries. Therefore, a sociological approach to IE is needed to have a better understanding of this phenomenon.

Beyond all cultural aspects specific to indigenous peoples and which have a significant impact on entrepreneurial practices (Foley, 2008), it is important to take into account the legislative, political and territorial aspects specific to certain indigenous populations (Cornell & Kalt, 2000) and the socio-political mechanisms that differentiate indigenous populations throughout the world. IE is characterized by the complexity of all these aspects, which in one way or another determine the choices made by entrepreneurs or aspiring indigenous entrepreneurs and the development of their businesses.

It can be concluded, therefore, that IE practices represent the visible part of the iceberg. The multiple interrelated political dynamics and history are at the bottom. Thus, it is difficult to understand IE without taking into account the history and socio-political aspects that underlie this phenomenon. It is important to understand the colonial history in different countries and the effect this history still has on IE. It has been argued that entrepreneurship is not a universal phenomenon (Welter, 2011) and, thus, exploring the dynamics that influence the social construction of IE remains a fascinating research adventure, both for developed and developing countries, where indigenous peoples are practicing entrepreneurship.

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