CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
One of the fundamental objectives of a responsible government is to ensure optimum standard of living. The post independence government adopted import substitution; large-scale industries by investing on large capital project which is predicated on the notion that “big is better” while “small is bad”. Small and medium enterprises were considered as outmoded and synonymous with technological backwardness. (Nnanna 2001). Even the Structural Adjustment Programme (SAP) introduced to restructure and diversify the production and consumption pattern of the Nigerian economy created painful effects on small and medium enterprises and forced many operators in this sector to fold up their operation (Oni 2002).
After many years of neglect, most developing countries have appreciated the linkage between technological and the role of indigenous entrepreneurs (i.e. small business enterprises). In Nigeria, assistance from national and international institutions are rendered for promotion of this subsector. Despite the substantial assistance of these institutions and the various restructuring programmes adopted by the successive Nigerian Governments, little progress has been made in improving the standard of living, a lot of Nigerian are yet to leave poverty, the Nigeria’s per capita income had been growing at 20.% annually hence it would take 35 years for the capita income to double from US$400 dollar to USD800 dollars (Lawal 2003). The decision of the federal government to withdraw from International Monetary Fund (IMF) in the interest of democracy, accountability and good. governance has created the need for the government to look inward and exploit the opportunities offered by these indigenous entrepreneurs through various programme initiated and supported by them.
Meanwhile studies on micro, small and medium scale enterprises have shown that entrepreneurs in these categories of business is a viable means of promoting self-reliance economic development as well as in accelerating the pace of industrial technology (Anyanwu 2000; Obitayo 2001; Lawai and Kio., 2001).
The 1988 census of Business conducted by the Federal Office of Statistics (FOS), revealed that 70%4 of the 220,000 industrial establishments surveyed were small and medium enterprises and accounted for 70%of industrial employment as well as 10-15% of the manufacturing input.
Fadahunsi (1992) stated that SMEs represent 900fo of the enterprises in the ACP (African, Caribbean and Pacific) countries. They also provide 70%z of employment opportunities for the citizens and promote indigenous technology. Also, Kurattko and Hodgetts (200 I) noted that small business employ 530/0 of the private workforce and accounted for 47% of sales and 51% of private sector gross domestic product (GDP). All these therefore show the predominance of SMEs in the economy of both developed and developing countries. These leads to the question, what classes of business are to be referred to as SMEs?
In the context of this study, indigenous entrepreneurs have been referred to as SMEs. Small scale could therefore be referred to as cottage industry. And they can be best described based on some of their characteristics:
· Few numbers of employees
· Ho amount of investmentandannual business turnovers
· Small in size within the industry
· Managers are also owners, etc (Ogundele 2007).
The 3rd Nigerian National Development Plan (1975-1980) defined small scale industry as a manufacturing establishment that employs less than 10 people and whose investment on machinery and equipment do not exceed N600,OOO (six hundred thousand naira). From another perspective, the Central Bank of Nigeria in 1995, in its credit guidelines defined Small Business Enterprises as any business organization with an annual turnover of less than NSOO,OOO (Five hundred thousand naira).
Ogundele (2000) defined Small Scale Enterprises as organizations employing a minimum or rive employees and with a minimum initial capital outlay of not less than N5000 five thousand naira) when such organizations were established between 1972 and 1986. Osuagwu (200 I} noted that an additional requirement to be tagged Small Scale Enterprises in Nigeria is that the number of employee is not greater than 50 in any situation and the financial capital outlay is not more than N50, 00 (one hundred and fifty thousand naira).
From the foregoing definitions, it could be seen that different individuals, institutions, or bodies and countries have given definitions to small scale enterprises. Therefore, as with entrepreneurship, it is difficult to have a generally acceptable definition of small scale enterprises, the best one can say is that small scale enterprises may be viewed as a business unit which is independently owned and managed and which does not dominate its relevant market segment of interest.
In Nigeria, the recent economic submit recommended the creation of 500,000entrepreneurs on the assumption that ifeachentrepreneur employs 100 workers, a tot83 number of 50 million jobs be created with the time frame.
Although, all these developments as commendable, however, the best way to eradiate poverty is not to throw money at if but to grow out of it. The various efforts of the government (with focus of Lagos) on the development of small and medium scale enterprises through various assist8J1ce in highly initiative and well structured programmes to encourage vocational educational centre in the state.) with an interest of setting up those apportioned individuals as independent entrepreneur after successful completion of course proved abortive, the rate of survival of these newly set up enterprises a.re still very low which makes the effort of the Lagos State government to result in futility and also making individuals to still became job seekers as against the normal goal of being an employer of labour and definitely still giving chance to poverty.
Considering – this pathetic situation, for the governments effort on entrepreneurship development to be fruitful in Lagos State, these factors influencing the behaviour and performance of these indigenous entrepreneurs should be properly examined for success to be achieved.
However, in the context of this study the factors are to be considered on two broad basis, personality factors; effect of age, work experience and level of education will be considered and under environmental factors which these indigenous entrepreneurs cannot manipulate i.e economic, technological and social-cultural effects will be considered. (Ogundele 2003)
PERSONALITY FACTORS
The personality factors examine those embodied factors andcharacteristics with an individual’ possess that gives predisposition of
indigenous entrepreneurs ranges from his ability to be innovative, intelligent, highly perseverance, internal locus of control, tolerance for ambiguity, leadership sand dynamism, working experience, good educational background and the rest of others.
However, in the context of this study we shall focus on three of these personality factors which are mostly of importance and crossly examine how they affect performance and behaviour.
(1) LEVEL OF EDUCATION
Education exposes individuals to various acceptable societal conduct, so that of widens the thinking horizons of entrepreneurs in terms of foresight for opportunities and how to organize resources to exploit such opportunities. Over the years the level of education has not been considered significant as key-success factor that can affect both behaviour and performance. For instance, the recorded success of Igbo business men in Spare-Parts ozver the years have been quite commendable.
However, with the level of complexity and dynamic nature of the Lagos business environment, educational exposure is not only necessary but of great value and importance to nature a business enterprise from growth to survival.