ENTREPRENEURIAL DEVELOPMENT AND ITS IMPACT ON MICRO, MEDIUM & SMALL ENTERPRISES IN NIGERIA
1.1 Background of the Study
Entrepreneurship plays important functions in the growth and development of any modern economy. Entrepreneurship is seen as the integral of economic growth and has a large impact on Small Medium enterprises in Nigeria and Developing countries globally, a main thrust of economic restructuring, decentralization and growth toward market economy. Entrepreneurial development is the way toward following up on already unnoticed profit or chances to produce an output which leads to general development. The importance of entrepreneurial development and its impact on SMES development remain a subject of continuing debate and discussion globally and in Nigeria particularly. Economic growth and development is a significant characteristic of every country, be it in the developed or less developed economies. In Nigeria today, government of every state embarks on entrepreneur policies and programs targeted at influencing the direction of economic development towards a fast and sustainable economic growth (Ogundele et al., 2012; Sule, 2014). These entrepreneur schemes were contained in National Development Plan of Nigeria (1962-68, 1970-74, 1975-80 and 1981-85). Entrepreneurial development seeks to encourage and promote the development of a broad private sector (Small and Medium scale enterprises) within production and service industries through a method that is geared at improving the competitiveness of existing small and medium enterprises and by supporting the growth of new enterprises in a developing economy. Inclusivity is a concept entrenched in the program approach by focusing on growth-oriented Small and Medium scale Enterprises as well as potential entrepreneurs in Nigeria. Following the emergence of oil sector in the early 1970s, significant change took place in the Nigeria economy. Entrepreneurship plays a substantial role in economic development specifically in job creation opportunities, increase more employment and eradicates poverty. The Federal Government has adopted several strategies and policies towards entrepreneurial development in Nigeria, by establishing Institution and Agencies, which provide variety of support services to entrepreneurs. Subsequently, entrepreneurship development is increasingly recognized as important driver of Small and Medium Scale businesses growth, generating employment, increasing innovation and poverty reduction through the empowerment of young men and women among all ages (UNCTAD, 2010). Entrepreneurship development has therefore increasingly been held out as an alternative to traditional economic development strategies and policies through it positive impact on small and medium scale businesses. These Advocates for entrepreneurship-based policies suggest that entrepreneurial development generates greater returns to the public and private sectors (SMES) than other alternative strategies such as industrial recruitment, or retention and expansion. Developing entrepreneurial skills is a key strategy to reduce poverty, promoting the private sector(SMES), create income and employment opportunities, and promote the activities of small and medium enterprises in Nigeria, this aims at promoting better business environment, building institutional and human capacities that will encourage and support the development of rural dwellers (Oghojafor, Olayemi, Okonji and Olayiwola, 2011; Adelekan, 2017).It is universally acknowledged that entrepreneurs have immense potentials as a stimulant of economic growth which include growth of the private sector businesses and sustainable development. Entrepreneurial development and its impact on small Medium Scale ventures has become a strategy in economic transformation of developing economies given the successes recorded by the Asian countries (China, India, Malaysia, Indonesia etc.) in the 90s (Ebiringa, 2013). Emerging nations with increased entrepreneurial resourcefulness tend to have experienced greater reduction in unemployment rates as well as recorded sustained increase in standard of living (Thaddeus, 2012; Adelekan and Tijani, 2017). Though, there are growing concerns about the state of enticement of entrepreneurial development and how it affects SMES (private sector) in Nigeria. The nature of Nigerians employment problems epitomized by the passive imbalance between job creation expectation and opportunities of an increasing large pool of literate unemployed and underemployed increases a number of important and challenging policies issues for which answers based on a robust and sound quality framework must be sought. Entrepreneur in Nigeria have a few bottle necks or issues that record for their wastefulness and here and there failures. A worthy and testing issue is the shocking gap between growth and development in production of job opportunities and the total work force. The narrowing or end of this lacuna firmly recommends the need anticipating profoundly new bearings in creating and developing entrepreneurship strategies and design of appropriate economic policies towards the private sector. However, there is a challenge, entrepreneurship, entrepreneurial development and small and medium enterprises development is hampered by overabundance of challenges like bribes by government officials, bad roads, epileptic power supply, low or lack of monetary support by the government. These problems and others have attracted universal attention (Business Environment and Enterprise Performance Surveys, 2015). Lack of employment has become a general phenomenon of the 21st century; the challenge is becoming more enormous each passing year in Nigeria and other developing economies. Low employment and unmitigated rural-urban migration have come to illustrate the Nigerian labor market. This has been compounded by frightening number of joiners as schools, polytechnics and universities churn out leavers in a geometric progression. This has impacted on the rate of social vices like prostitution, kidnapping, robbery and unfair work labor practices experienced mostly by the unemployed youths and school leavers, which are other dimensions to the complexities of contemporary Nigerian employment challenges. As a result of this, it is therefore encouraged that young school leavers should be motivated to engage in entrepreneurial development i.e. (entrepreneurial training) so as to get the Nitti gritty of a successful running of private sector businesses. When this is encouraged there would be a reduction of unemployment and a growth in the private sector which would in turn have a positive impact on a Developing economy like Nigeria.
1.2 Statement of the Problem
Although Entrepreneurial development play an important role in the development of SMES and Economy at Large, an unacceptable and disappointingly high number of these SMES fail during the first few years of operation in Nigeria (Nieman and Nieuwenhuizen 2019), especially due to challenges faced by Small Medium Enterprises. According to Fatoki and Garwe (2010), lack of adequate entrepreneurial development support is one of the main reasons for the low level of entrepreneurial activities and the high failure rate of private ventures (SMES). Considering the major role this play on Small and medium scale businesses to the national economy and the high rate of failure of these businesses, it is critical to look at how bottle necks facing entrepreneurial development and Small medium scale enterprise in order to overcome mentioned problems. Nieman and Nieuwenhuizen (2019) Assert that the largest percentage of Small and medium scale ventures fails during the first two years of their establishment. Unemployment and poverty are some of the problems in Nigeria and Africa at large, SMEs could play a major role in reducing these problems. In order to achieve such goals, SMEs should be supported through entrepreneurial development and they also should be able to access the resources necessary for their survival, growth and general development of the private sector. Owners and managers of Small and medium scale businesses also need to be equipped with the training, right skills and knowledge to be able to start businesses that survive. As a result of the above discussions, this study, therefore, intends to examine Entrepreneurial development and its impact on Small and medium scale enterprises.
1.3 Objective of the study
The main purpose of this study is to examine entrepreneurial development and its impact on micro, small and medium scale enterprises. The specific objectives are to;
Asses the level of entrepreneurial development in Nigeria. Examine the impact of entrepreneurial development on Small Medium scale enterprises. Examine the relationship between entrepreneurial development and the growth of Small Medium Scale enterprises in Nigeria. Examine the challenges of entrepreneurial development in small and medium scale enterprises. Examine the contribution of entrepreneurial development to Nigerian economy. Recommend solutions to the problem of Small Medium scale enterprises in Nigeria. RESEARCH QUESTIONS What is the level of entrepreneurial development in Nigeria? What is the impact of entrepreneurial development on Small Medium scale enterprises? What is the relationship between entrepreneurial development and the growth of Small Medium Scale enterprises in Nigeria? What are the challenges of entrepreneurial development in small and medium scale enterprises? What are the contributions of entrepreneurial development to Nigerian economy? Recommend solutions to the problem of Small Medium scale enterprises in Nigeria?
1.5 Research Hypotheses
HO: Entrepreneurial development has no significant impact on small and medium scale enterprise in Nigeria
H1: Entrepreneurial development has a significant impact on small and medium scale enterprise in Nigeria
HO: There is no significant relationship between entrepreneurial development and growth of small medium scale enterprise in Nigeria
H1: There is a significant relationship between entrepreneurial development and growth of small medium scale enterprise in Nigeria
1.6 Justification of the Study
The study would have contribution to enlighten the society on Entrepreneurial development and its impact on Small and medium scale enterprise.
The findings of this study is expected to inform policy makers regarding the direction of further research into interventionist programmes for MSMEs in Nigeria.
For owners and managers of micro and small businesses, access to a study like this can aid their understanding of current challenges and reveal the essential factors that promote small business growth and survival and thus enable them to focus on the relevant ones in an attempt to enhance their growth and performance.
It would also prepare ground for interested researcher who might wish to conduct further research in related areas and could contribute to the existing literature.
Scope of the Study
The study is restricted to Entrepreneurial Development and its impact on Micro, small and medium scale enterprises in Nigeria.
Organization of the Study
This research work contains five chapters. The first chapter contains the introduction which provides general information about the study, structure of the research work, objectives, research question, justification and the definition of terms and Chapter 2 presents the literature review which includes theoretical review, conceptual review with the following subtopics: entrepreneurship, entrepreneurial development, Small and medium scale enterprises in Nigeria, barriers of entrepreneurial development; and empirical review. Chapter 3 describes the research methodology and it presents the research process and data collection procedure. Chapter 4 is “data analysis and result”; the outcomes of the study, element and process of data analysis and results are presented. Chapter 5 summaries the findings, the benefits of the research and recommendations.
Definition of Terms
Micro Enterprise: A firm, whose total cost including working capital but excluding cost of land is not more than ten million naira (N10,000,000) and/or with a labour size of not more than thirty (30) full-time workers and/or a turnover of less than two million naira (N2,000,000) only.
Small Enterprise: An enterprise whose total cost including working capital but excluding cost of land is between ten million naira (N10,000,000) and one hundred million naira (N100,000,000) and/or a workforce between eleven (11) and seventy (70) full-time staff and/or with a turnover of not more than ten million naira (N10,000,000) in a year.
Medium Enterprise: A company with total cost including working capital but excluding cost of land of more than one hundred million naira (N100,000,000) but less than three hundred million naira (N300,000,000) and/or a staff strength of between seventy-one (71) and two hundred (200) full-time workers and/or with an annual turnover of not more than twenty million naira (N20,000,000) only.
Entrepreneur: A person who sets up a business or businesses, taking on financial risks in the hope of profit.
Entrepreneurial development: Entrepreneurial development is essentially an educational process and an endeavour in human resource development. It is a process in which persons are injected with motivational drives of achievement and situations especially in business/enterprise undertakings. It also refers to every activities channelled towards creating and advancing the practice of entrepreneurship
Entrepreneurship: entrepreneurship could be described as an act of how, by whom and with what effect opportunities to create future goods and services are discovered, evaluated and exploited.
National Development: National Development (ND) entails the development of the systems and sub-systems of a nation such as economic, political, social and other systems and institutions at the micro, intermediate and macro levels as these are evidence of even entrepreneurial development.
Barriers: Barriers are conditions that lie in any operational situation making it quite difficult to make progress or achieve an objective following the system and environment of practice.