CHAPTER ONE
1.1. BACKGROUND TO THE STUDY
Over the years, it has being
proven from other research work and in developed countries that Entrepreneurial
development is a major factor toward ensuring that a country experience growth
in terms of employment and self-dependability. Economic displacement is one of
the external forces that influence the development of entrepreneurship
(kuratko, 2009). This is why Alam and Hossan (2003) see entrepreneurship as
playing a key role in the process of economic development through creation of
employment, increasing investment and consumption in a nation. In similar vein,
Chigunta (2001) notes that entrepreneurship has been receiving increasing
recognition as a source of job creation, empowerment for the unemployed and
economic dynamism in a rapidly globalizing world. Also in the word of Garavan
and O’Cinneide (1994) in their contributions maintain that entrepreneurship is
often used for developing enterprising people and inculcating an attitude of
self-reliance using appropriate learning processes. In Nigeria before the
advent of colonial government, unemployment was a rare phenomenon because the
people were highly entrepreneurial and productively engaged in subsistence jobs
and farming. This entrepreneurial engagement is prevalent in Yoruba land of
western Nigeria, Hausa land of the northern Nigeria, and among the Igbo people
of eastern Nigeria.
It is on record that Yoruba and Hausa ethnic
groups are great entrepreneurs in pre and post independent Nigeria. The Igbo
ethnic group particularly is recognized internationally for its culture of
entrepreneurship and enterprise development (Dana, 1995). This is why Ananaba
(1969) asserts:
“The economy of the various states which make-up modern Nigeria was
basically a subsistence economy and customs had established the practice that
people serve their parents, village heads and the community without
remuneration. On a given day, people went
and work for a particular individual1. Through economy the higher would
be the poverty level and associated
welfare challenges.
Entrepreneurial development has also led to employment
generation, growth of the economy and sustainable development. The current
number of colleges and universities offering small business management and
entrepreneurship development programme has grown from one university in 1947 to
over 1600 in the 1990s (Solomon and Fernald, 1991; Solomon et al, 1994;
Solomon, et al, 2002).
White and Kenyon (2000) also found
a „flourishing youth enterprise culture‟ in
the United Kingdom among young entrepreneurs aged 18-24 years. In Zambia, it
was show that 25% of the youth are self-employed (Chigunta, 2001). Most of
these young people, especially younger youth, tend to be concentrated in
marginal trading and service activities. Findings in Ghana of small scale
enterprises reveal that young people owned almost 40 percent of the enterprises
(Osei, Baah-Nuakoh, Tutu, and Sowa,1993).
Similarly, research in South
Africa suggests that the probability of self-employment among young people
rises with age (Chigunta, 2001). When Nigerians especially unemployed youth are
mentored and provided the needed resources and enabling environment for
business start-ups, they will economically be engaged thereby shunning the
illegal acts of hostage-taking, kidnapping, bombing and vandalism and
homelessness.
According to Groves (1997), in
Nickels, McHugh, and McHugh (1999), job-creating power of entrepreneurs can be
worked at of some great American entrepreneurs from Du Point in 1802 to Avon in
1886 and Bill Gates to Ted Turners in the recent times and also in Nigeria we
have the likes of Alico Dangote, Mike Adenuga, Jimoh Ibrahim etc who have stood
out over the years as a result of entrepreneurial spirit in them as they
started small but today they are people that everyone wants to reckon with and
not just in Nigeria but all over the world.
Small and Medium Scale Enterprises
often owned by entrepreneurs are sub-sectors of the industrial sector which
play crucial roles in industrial development (Ahmed 2006). Also, following the
adoption of Economic reform programme in Nigeria in 1981, there have been
several decisions to switch from capital intensive and large scale industrial
projects which was based on the philosophy of import development to Small and
Medium Scale Enterprises which have better prospects for developing domestic
economy, thereby generating the required goods and services that will propel
the economy of Nigeria towards development.
It is based on this premise that
Ojo (2009), argued that one of the responses to the challenges of development
in developing countries particularly, in Nigeria, is the encouragement of
entrepreneurial development scheme. Despite the abundant natural resources, the
country still finds it very difficult to discover her developmental bearing
since independence. Quality and adequate infrastructural provision has remained
a night-mare, the real sector among others have witnessed downward performance
while unemployment rate is on the increase. Most of the poor and unemployed
Nigerians in order to better their lots have resorted to the establishment of
their own businesses. Consequently, Entrepreneurship is fast becoming a
household name in Nigeria. This is as a result of the fact that the so called
white collar jobs that people clamors for are no longer there. Even, the touted
sectors (Banks and companies) known to be the largest employer of labour are on
the down-turn following the consolidation crisis and fraudulent practices of
the high and mighty in the banking sector which saw to it that banks like Oceanic,
Intercontinental, Fin-bank cease to exist.
Since the office jobs that people
desire are no longer there for the teeming population, and the few ones that
succeeded in getting the jobs are thrown out as a result of the factors
identified above, the need for the government and the people to have a rethink
on the way-out of this mess became imperative. Hence, the need for Small and
Medium Scale Enterprises (SMEs) became a reality as a means of ensuring
self-independent, employment creation, import substitution, effective and
efficient utilization of local raw materials, reducing rural urban migration
and contribution to the economic development of our dear nation (Nigeria).
According to Emmanuel, Oni and
Daniya (2012) benefits of Small and Medium Scale Enterprises cannot be achieved
without the direct intervention of the government and financial institutions
and this is why over the years a number of policies have been formulated by the
government with a view to developing Small and Medium Scale Enterprises. For
example, the Nigerian government under the then leadership of Chief Olusegun
Obasanjo promulgated microfinance policy and other regulatory and supervisory
frame work in 2005 and this was done in order to see to it that small and
medium scale business enterprise strive.
1.2. STATEMENT OF PROBLEM
Entrepreneurship is supposed to be a bail out for
economic stagnation with reference to creating job opportunities that is,
combating unemployment in an economy. But Nigeria as a country is still faced
with increasing unemployment rate in the sense that most of its graduate are
without job and this propel the researcher to find out what the challenge is
despite the effort of the government towards ensuring that hiding skills are
discovered.
In view of the above problem, this
study is intended to critically appraise and analyse the operating environment
and circumstances of SMEs in Nigeria with a view to actually identifying why
they (SMEs) are not playing the vibrant and vital roles in the Nigerian economy
as they (SMEs) does in other economies such as USA, India, South Africa which
has so many similarities with Nigeria in terms of population and other
demographic variables.
1.3. OBJECTIVE OF THE STUDY
1.3.1.GENERAL OBJECTIVE
To know whether or not entrepreneurial
development is truly a strategic tool towards enhancing
Nigeria economy and also how it has affected the
economic growth using Idumota Market in Lagos as case study.
1.3.2.SPECIFIC OBJECTIVE
I.
To show the rate at which entrepreneurial
development has affected the Nigeria
Economic Growth.
II.
To reveal the benefit of entrepreneurial
development toward ensuring that the unemployed are gainfully employed.
III.
To determine the crucial importance of entrepreneurship
as a tool for combating increased crime rate such as kidnapping, bombing,
robbery in Nigeria by making people
self-reliant.
IV.
To ascertain the present level of awareness of
entrepreneurship development and its impact on the purchase of locally made
goods.
1.4. RESEARCH QUESTIONS
The research question covers all aspect of the study,
and it is used to draw valuable information and details about Entrepreneurial
development using Idumota market in Lagos as case study.
I.
To what extent will entrepreneurial development
have effect on Nigeria Economic
Growth?
II.
Does benefit exist on entrepreneurial
development toward ensuring that the unemployed are gainfully employed?
III.
Is entrepreneurship an important tool for
combating increased crime rate such as kidnapping, bombing, robbery in Nigeria?
IV.
What is the present level of awareness of
entrepreneurship development on the purchase of locally made goods?
1.5 RESEARCH HYPOTHESIS.
Oloyede (2002) defines hypothesis as a tentative or
testable or verifiable statement about the relationship between two or more
variables. It is the expected outcome of a study.
The two variables which will be measured in
this study are:
a. Dependent
variable which is Economic Growth in Nigeria as regard employment or
unemployment rate.
b. Independent
variables which is the entrepreneurial development as regard creativity,
innovation and establishment of small and medium scale businesses.
The following hypotheses shall be
tested in this study:
H0: Entrepreneurial development has no significant
effect on the economy development of an economy
H1: Entrepreneurial development has a significant
effect on the economy development of an economy.
1.6 SIGNIFICANCE OF THE STUDY
Previous studies on this research topic have being
carried out as to how entrepreneurship affects the economy growth in terms of
it gross domestic product (GDP) but not much has been done on Entrepreneurial
development on Nigeria Economy development with regards to employment or
unemployment rate, purchasing of locally made goods, reduction of crime rate
using Idumota market in Lagos State as its case study.
i.
This work becomes important since it will expose
individuals on the effectiveness on entrepreneurial development on youth
mostly.
ii.
This research will also identify and through
more light on how entrepreneurial development will contain crime rate among the
youth as well caused by unemployment.
iii.
Recommendation to be proffered will help in
reducing the present tension and fear of unemployment and crime rate.
1.7 SCOPE AND DELIMITATION OF THE STUDY
This study will examine entrepreneurship as a panacea
to economic development, using Idumota market in Lagos State as a case study.
This study will be bringing out the various opportunities, chances and
advantages that the small and medium scales enterprise had gained over the
years with respect to its employment rate thereby reducing crime rate directly
or indirectly, encouraging purchase of locally made product looking at a period
of 1990 to 2013.
1.9. OPERATIONAL DEFINITION OF TERMS
Entrepreneurial development
Small and medium scale enterprise
Economy development
Crime rate
Locally made product
Unemployment rate