Partnership reverses economic trend

By Carson Walker, Associated Press Writer | Wednesday, July 27, 2005

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KYLE — In the late 1800s, the vast Pine Ridge Indian Reservation was home to the last wars between American Indians and the U.S. Cavalry.

In the 1970s, it experienced clashes between federal agents and the American Indian Movement.

Now, business and tribal leaders are trying to segue from an economy reliant on federal subsidies to one that fosters private enterprise.

And in the process, they are becoming a player in the global economy. The reservation doesn't have many natural resources, so much of the focus is on jobs, where location doesn't matter.

For Oglala Lakota such as Mary Underbaggage, that means being able to have a challenging career and earn a good living for her and her six children, ages 3 to 21, in one of the poorest areas of the country, where unemployment is about 80 percent and substance abuse is rampant.

"Our life is comfortable because I can pretty much take care of our day-to-day needs, compared to a lot of other families around me. They really have to budget their money or go without what we pretty much take for granted,"Underbaggage, 40, said.

She grew up near the reservation and lives on her family's land. Underbaggage has bachelor degrees from Oglala Lakota College in management information systems and business computers and is working on a degree in information technology.

Most reservation jobs are in the public sector — either through the Bureau of Indian Affairs or the tribe — at tribal offices, schools, in law enforcement and at Indian Health Services. Private-sector jobs are mostly limited to the tribe's casino and a growing number of tourism-related businesses.

Underbaggage is one of eight full-time employees at Lakota Express, an Oglala- and woman-owned company that does marketing, telemarketing and Web design in Kyle.

She said if it were not for the opportunity, she probably would be working for the tribe like many other tribal members who stay on the reservation to raise their families.

"There's not that many technical jobs," the soft-spoken Underbaggage said.

But there may be more soon.

The computers in the Lakota Express building are connected to three T-1 Internet lines. Through those, some data entry work sent to China in outsourcing is coming back to the reservation in an American and Chinese joint venture called USE Limited.

One reason for this reverse outsourcing: messy handwriting. The company's job is to double-check the accuracy of documents transcribed in China.

For example, a data-entry team in China inputs information gathered from a job fair held in the U.S. Then, the information is sent over the Internet to Lakota Express. The next morning, an employee in Kyle compares the scanned image of the original card with the data the Chinese entered to make sure it is accurate and then sends it back to the client, often within 24 hours.

"They're working when we're sleeping, so we're adding efficiency to our client's customers," Mark Tilsen, marketing director and vice president of Lakota Express, said.

The Chinese workers know English but can't always interpret word endings correctly or understand the penmanship of Americans who fill out the forms, said Linda Crider, vice president of global strategies for USE, which has offices in Dallas and Hong Kong.

Helps women

The business relationship helps young women in poor areas of China and on the Pine Ridge reservation earn a relatively decent living, Crider said.

The Chinese workers make as much as twice the average wage for factory workers, no less than $100 a month, she said. USE also pays for their food, housing and continuing education at their workplace in China.

Karlene Hunter, Lakota Express founder and CEO, said her employees also make a decent income, as much as $12 an hour as their technical skills increase.

Tilsen said Lakota Express also has about 120 part-time employees trained. As many as 40 of them could be on the job when the workload is heaviest, he said.

The Chinese quality control venture also employs about 75 full-time workers in China, five in Texas and three at another partner, Native American Management Services in McLean, Va., which is owned by two women who are members of the Choctaw tribe, Crider said.

Lakota Express now hopes to draw government contracts along with more commercial clients because of its relationship with USE.

Big-name clients

USE's clients for call-center services, data-entry work, information technology and records management include Daimler-Chrysler, United Van Lines, global banks and others, Crider said. Another customer is Jeff Beckley, former vice president of circulation at the Atlanta Journal-Constitution newspaper.

The workers gleaned contact information from a newspaper's contest-entry cards and converted that information into possible leads for subscriptions, he said.

"Prior to working with Lakota Express, we basically put those in a file box in a storage room, and they really weren't being worked as sales leads," said Beckley, now president of Market 8 in Dallas, his own accounting firm.

Private profit

Pine Ridge is the first Indian reservation to do business with USE, but the partners toured four other prospective reservations in Arizona, Minnesota and Connecticut.

Oglala Sioux Tribe President Cecelia Fire Thunder, who took office in November, said the partnership secured by Lakota Express is a good example of her mission to reduce poverty on the reservation.

It will happen not through increased government spending but through more private investment, she said.

"If this reservation is going to do well economically, it has to come from the private sector," Fire Thunder told the visiting business people. "This is a good example of that."

Before USE and Lakota Express signed a strategic agreement June 8, Hunter gave two of USE's Hong Kong partners, Simon Tam and Philip Chan, a tour of the building.

"The quality control work you do for us is done inside this room?" asked Tam.

"Yes, that's right," replied Hunter.

Tam said both China and the Oglala Lakota are moving from economic models dependent on the government to those relying on the free market.

"So basically, we are on the same path and are finding ways to collaborate," he said.

Crider said working with American Indians is a lot like working with Chinese because their cultures are similar. Women in both cultures are taught to respect authority and their elders, she said.

"Since our team is usually made up of young college grads, it takes us awhile to get them comfortable to offer opinions and challenging ideas and contributing to the intellectual discourse," Crider said.

"We really have worked hard to instill a team concept and not a topdown hierarchical atmosphere. Once we get through their nervousness on that, they just really turn on," she said.

Indian outsourcing

The mesh between USE and Lakota Express is new, but U.S. companies are increasingly looking to Indian reservations as an alternative to other countries, Doug Brown and Scott Wilson, authors of "The Black Book of Outsourcing," said

Their research of Census data found that tribes without large gambling revenues see big economic and social improvements because of outsourcing.

The Internet makes it technically possible, many Indian employees are educated and eager to work, federal agencies are encouraged to hire minority-owned companies and businesses are looking for domestic options, Brown said.

Ford Motor Co., Dell and Capital One all are interested in working with tribes instead of sending work to India, Ireland and the Philippines, he said. Language barriers, distance-management issues and security-sensitive work that can't be sent overseas are all factors, Brown said.

"In many ways, American Indians are entering the outsourcing marketplace at a good time. There's plenty of work to be had, and for some CIOs, the offshore honeymoon is over," he said. "They're looking for a low-cost and high-quality onshore option."

Four Utah reservations are thriving at outsourcing, Carey Wold, who was hired in 2000 as a consultant for the state, said.

His job was to establish tribally owned companies on reservations that can tap into government and commercial outsourcing contracts "in some of the most unemployed areas of the state. That was our target," he said.

"A lot of it has to do with the vision of the tribe and the council. They have the vision for the tribe and their people, to allow them to have access to sustainable economies and jobs."

Because of the success, the Cedar Band of Paiutes hired Wold a year ago to work for its venture, Suh'dutsing Technologies in Cedar City, Utah, as senior vice president of business development.

It did $14 million in business last year and should generate $40 million this year, he said.

Jobs include data entry, call center, help desk and information technology work, Wold said.

"There's nothing better than watching a reservation community thrive. You're seeing newer cars in the parking lot. They're buying homes. And I've watched that happen," he said.

Other ventures

Tam, one of Lakota Express' new Hong Kong partners, said the relationship between China and Pine Ridge could foster other opportunities beyond outsourcing, such as exporting buffalo meat.

"When 1.3 billion Chinese start eating bison, I think the problem to worry about is extinction," he said, joking.

On the Net:

http://www.lakotamall.com/lakotaexpress

http://www.uselimited.com

http://www.namsinc.org

http://www.suhdutsingllc.com