Key Features:
No of Chapters: 5
No of Pages: 134
Abstract:
This research work attempts to gain insight into Entrepreneurial activities and their effect on the Economic Development of Nigeria.
The objective of this study is to identify the different ways in which entrepreneurs have contributed to the nation’s economic development. Thus, providing a link between Entrepreneurial activities and Economic growth.
In a bid to achieve the stated objective, the literature review provides;
1) A conceptual clarification of the term “Entrepreneurial Activity”.
2) Entrepreneurial activity and regional Economic growth.
3) Types of Entrepreneurship and their relation to economic development.
4) The influence of economic development on entrepreneurship.
5) Empirical evidence – showing the effect of entrepreneurship on economic growth.
6) The growth and prospect for entrepreneurial activities in Nigeria.
7) The importance and benefit of Entrepreneurial activities in Nigeria, and
8) Future analysis and some policy issues.
The objectives were driven home through the use of statistical measures. Questionnaires were administered and tables were used to present the data gathered, and the use of chi-square statistics was used to test the validity of the hypothesis.
The concluding part of the research work provides a brief summary of the research work with viable recommendations worthy of consideration by all, majorly by the government.
Table of Content:
CHAPTER ONE: INTRODUCTION
1.1 Background of the Study
1.2 Statement of the Research Problem
1.3 Objective of the Study
1.4 Scope of the Study
1.5 Relevance and Significance of the Study
1.6 Limitation of the Study
1.7 Definition of Terms
CHAPTER TWO: LITERATURE REVIEW
2.0 Introduction
2.1 Entrepreneurship Defined
2.2 Entrepreneurial Activity and Regional Economic Growth
2.2.1 The Active Class
2.2.2 Economic and Cultural Activity
2.2.3 High-Tech Entrepreneurship and Overall Activity
2.3 Types of Entrepreneurship and their Relation to Economic Development
2.4 The Influence of Economic Development on Entrepreneurship
2.5 Empirical Evidence: Showing the
Effect of Entrepreneurship on Economic Growth
2.6 The Growth and Prospect for Entrepreneurial
Activities in Nigeria
2.7 Importance and Benefits of Entrepreneurial
Activities in Nigeria
2.8 Future Analysis and Policy Issues
CHAPTER THREE: RESEARCH METHODOLOGY
3.0 Introduction
3.1 The Population
3.2 The Research Design
3.3 Sampling Method
3.4 The Sample Size
3.5 The Research Instrument
CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS
4.0 Introduction
4.1 Data Analysis
CHAPTER FIVE: SUMMARY, RECOMMENDATIONS AND CONCLUSION
5.0 Introduction
5.1 Summary
5.2 Recommendations
5.3 Conclusion
References
Appendix
Introduction:
1.1 BACKGROUND OF THE STUDY
In the 1950’s, Nigeria started making an unprecedented effort to encourage economic growth and development.
This was the period when National Consciousness was at its peak. But Nigerian entrepreneurs have often been criticized for various reasons. One criticism that was repeatedly voiced was directly against their “UNLIKE BUSINESS MINDED ATTITUDE and lack of innovative activities.
Many Nigerian indigenous entrepreneurs adopted a very narrow and myopic concept of their function and often focus on money-making rather than stress on innovative business activities of large enterprises which will, in turn, create a lot of jobs in the country. And if it is a manufacturing company, it will produce most of the goods that the country may have been importing, thereby conserving our falling foreign exchange earnings. It is also hoped that these enterprises would help not only to generate employment opportunities for our school leavers and school graduates but will also export some of their products and earn some foreign exchange for the country and thereby affecting the country’s economic development positively.
In countries like the United Kingdom, the United States, China, Japan, and other developed countries, the practice of entrepreneurship has become an empowering and developmental tool for individuals to establish their own small business which will, in turn, grow into large or organizations.
The practice of entrepreneurship among countries differs to a large extent. In countries like the United States, large corporations and conglomerates started off as start-ups, which have promoted economic growth and National development, same applies to China and Japan that have a high level of entrepreneurs promoting their country's economies.
Given the required exposure, necessary incentives, right opportunities, education, enabling environment, and orientation, these countries have encouraged entrepreneurship and have succeeded to a large extent.
With entrepreneurial activities and dedication, this entrepreneur has reduced their dependency on government and large organizations for employment, and have through determination and dedication found a suitable position for themselves in the market place among big-time companies and have with time become industry leaders, for example, Dangote company and Microsoft corporations, etc whose business activities and innovative ideas have brought positive effects on the Nigerian economy.
The last few decades have witnessed a lot of studies analyzing the determinants of entrepreneurship and their effects on the economy.
While some of these studies are theoretical e.g (Holmes and Schmitz, 1990) others are empirical, e.g (Evans and Leighton, 1990).
The consequences of entrepreneurship in terms of economic performance have also generated extensive literature.
However, this literature has generally been restricted to two units of observations, first-that of the establishment of the firm and second-that of the region, that is analyzing the activities of entrepreneurs and their effects on the economic development at the level of the firm, establishment, or region.
The following chapters will concentrate on entrepreneurial activities and their effects as it relates to economic performance.
Here as well, the comparison will be drawn between the activity class/index, the bohemian index, and talent index of the U.S.A.
We would also see how culture and entrepreneurial activities are related and their effects on regional development. We would also see empirical evidence showing the effects of entrepreneurial activities on economic growth. And lastly, a framework will be provided, linking entrepreneurship to economic growth, as well as a future analysis and policy issues.
1.2 STATEMENT OF THE RESEARCH PROBLEM
In order to obtain the personal options of Nigerian entrepreneurs with respect to their major problems, a question was formulated and addressed to 107 randomly selected entrepreneurs. It read – “which of the following problems do you consider to be the most significant facing you in the daily operations of your business such as finance, expatriate competition, Nigerian competition, management problems, lack of technology and others.
The responses of the subjects are set forth in the table below.
Table 1.2.1: The distribution of responses to the question regarding the serious problems in Business.
N = 107
Business Financial problems Expatriate competition Nigerian competition Management problem Lack of technology Others Total
No % No % No % No % No % No % No %
manufacturing 8 17.3 4 8.4 1 2.2 18 40 14 32.1 0 0 45 100
Retail trade 16 22.9 23 32.3 18 26.7 10 14.3 2 2.4 1 1.4 70 100
Services 10 16.7 10 16.7 5 8.2 25 41.7 10 16.7 0 0 60 100
The data above shows conclusively that a majority of the entrepreneurs in manufacturing and services identified management problems and inadequate technology as their major handicaps.
In more advanced nations, the problem of managerial know-how does not pose such a bottleneck as it does in developing countries. In the formal, the businessman can ‘buy’ the skills which he does not possess. While in the latter, businesses are relatively small and there is a paucity of qualified nationals. And even if they are available, the demand and supply situation precludes the small entrepreneur from representing a serious competitor. Since the entrepreneur has no expertise of his own and does not have the resources to hire qualified National/expatriate personnel, when his growth reaches a certain level, he finds it difficult to control and thereafter stagnates.
Some who are afraid of continuous growth either start depositing their profits in the bank or engaging in other small enterprises requiring one or two employees. From then on, they start spreading themselves too thin, thereby losing their sense of entrepreneurial skills. Often those who neglect to continue to grow to find out rather too late that they have neither the time nor the necessary information and facilities to make the wise decisions.
In Nigeria, the situation is an aggravated, for most of the equipment and parts come from overseas and take three to five months to arrive.
Nigerian businessmen in the retail trade and in services were particularly worried about competition both foreign and domestic. As in most enterprises where capitalization is relatively low, competition is always relatively high because of the ease of entry.
Many Nigerian entrepreneurs are in enterprises where such entry is relatively easy. And these enterprises are characterized by instability and comparative financial weakness and therefore the entrepreneur's exhibit lack of entrepreneurial skills in carrying out their businesses.
A factor that seems to give a decided advantage to foreign competitors is the tendency on the part of many Nigerian consumers to rate as superior imported goods or goods sold in stores owned by expatriates. A product bought by the small indigenous trader wholesale from an expatriate firm, e.g U.A.C, and retailed to consumers is considered inferior to an identical product bought from the same expatriate firm.
Therefore, it would take the commitment and determination of these entrepreneurs to improve their entrepreneurial skills, this perhaps could be the panacea to these problems.
1.3 OBJECTIVE OF THE STUDY
The objective of this study is to provide a survey. Identifying the different ways in which entrepreneurs have actively contributed to the country’s economic development. Thus, providing a link between entrepreneurial activities and economic growth.
It also seeks to link measures of entrepreneurial activities for regions to the economic performance of these regions i.e (regional development).
1.4 SCOPE OF THE STUDY
Currently, Benin City will be the delimitation of the study i.e, the study will be restricted to small-scale enterprises in Benin City. Basically, any small business enterprise of choice would serve as a reference for the study.
1.5 RELEVANCE AND SIGNIFICANCE OF THE STUDY
Now the main difference between the organization of a large firm and a small one is the role of ownership and management. In a small firm usually, there is one person or a very small group of persons, which are in control and who shape the firm and its future. The role of such person or group of persons is often described with the term “Entrepreneurship”. Business start-ups established nowadays are as a result of some certain pull and push factors, and not because they want to fill a vacuum in society. This study is relevant, in the sense that it seeks to identify the ways in which Entrepreneurial activities and their effects have positively affected the Nigerian economy. And it also identifies ways the government can help promote and encourage business start-ups for entrepreneurs.
Entrepreneurs engage in activities, which unconsciously to most of then have positive effects on the economy.
This study equally seeks to revise the existing knowledge as it relates to entrepreneurship and entrepreneurial activities and effects.
This study is both theoretical and practical in nature, this is because different kinds of literature will be analyzed as it links the entrepreneurial activities and their effects on other countries of the world, stating the challenges and their remedies and the policies used by the government in these countries to encourage and support entrepreneurial activities.
Most entrepreneurs feel that establishing a business making a profit and see the business grow is all it takes to be an entrepreneur. In other to stay ahead of the competition and still be relevant in the economy, an entrepreneur needs to be active and at the same time be dedicated in conducting his or her business activities. This issue is one out of many that this study seeks to address.
Basically, the significance of the study can now be seen as stated above, as it seeks to contribute added meaning to existing studies under entrepreneurship, their activities and challenges, and their remedies including the policies used by the government in these countries to support and encourage entrepreneurial activities which tend towards economic development.
1.6 LIMITATION OF THE STUDY
It is true that no study is actually perfect and 100% precise, for studies are subject to certain constraints, and encompassed by various kinds of problems.
The limitation of this study includes:
1. Smallness of sample size
2. Limited time and resources and these resources are not financial in nature, but resources in terms of data and existing literature as it relates to this study.
1.7 DEFINITION OF TERMS
ECONOMIC GROWTH: This is the increase in the number of goods and services produced by an economy of a nation over time.
ECONOMIC DEVELOPMENT: This is the increase in the standard of living in a nation’s population with sustained growth.
ENTREPRENEUR: An Entrepreneur is an enterprising individual who builds capital through risk or initiative. An entrepreneur is also an individual who perceives needs, conceives goods or services to satisfy the needs, organizes the factors of production, and creates and markets the products.
INNOVATION: This is the creation of better or more effective products, processes, services, technology or ideas that are required or needed. Innovation involves the introduction of new products, new methods of handling distribution, new methods of production etc.
ENTERPRISE: A n Enterprises is an activity or project that produces services or products. While a business enterprise is a decision-making unit concerned with serving certain needs through the production and distribution of goods and rendering services at a profit for the owner.
ENTREPRENEURSHIP: This is the act of performing the role of an entrepreneur. It is also the process of creating value by pulling together a unique package of resources to exploit an opportunity.
PRODUCTIVITY: This is the measure of the efficiency of production. It is also a ratio of production output to input in a given period of time.
MANUFACTURING: This is the process or the act of producing goods or services for consumption, by a manufacturer or producer.
FOREIGN EXCHANGE EARNINGS: This implies the amount of foreign currency or money earned by a manufacturer or producer of goods or services when he or she sells or exports goods or services to other countries of the world.
EMPLOYMENT: This is the act of being employed or engaged in an occupation or work by an individual in an organization.
ORGANIZATION: An organization is a social unit or human groupings deliberately constructed and organized to seek specific goods. A business organization, therefore, is an organization that is set up and organized for the purpose of producing goods or services for sale in order to make a profit.
FIRM: A firm is a business unit owned and managed by one or more persons who is engaged in the production of goods or services for sale for the purpose of making a profit.
SERVICES: A service is of intangible benefits provided or rendered by service firms to individuals, organizations, and government through the performance of series of activities with the motive of making a profit.
COMPETITION: This is the jostle and juggles among firms that are in the same line of business for customers or buyers.
PROFITABILITY: This is the primary motive of every entrepreneur in any form of business. Profit is the excess of revenue over cost.
BUSINESS START-UP: This is the process of starting up a new business. In other words, a business start-up means starting up a new business from the scratch.
CONGLOMERATE: A conglomerate is a combination of two or more corporations engaged in entirely different businesses that fall under one corporate structure.
INCENTIVES: These are measures or something that organizations use to encourage and motivate their employees to do their work more efficiently and effectively.
OPPORTUNITIES: These are favorable openings in an operating environment of an organization that the organization can exploit to its advantage.
ENABLING ENVIRONMENT: This is the expression that encompasses government policies that focus on creating and maintaining an overall macroeconomic environment that brings together suppliers and consumers in an inter-firm co-operation manner.
ESTABLISHMENT: This is the act of forming or establishing something e.g a business organization etc.
ORGANIZATIONAL CULTURE: This is the collective behavior of humans (employers and employees) in an organization which is formed and exhibited by the organization’s values, visions, norms, working language, systems and symbols etc.
CONSUMERS: These are persons or group of persons who are the final users of products and services generated within a social system. A consumer may be a person, households, organizations and government.
POLICY: A policy is a plan of action selected from among alternatives. It is a standing overall plan embracing general principles and aims of an organization.
MARKET CAPITALIZATION: This is the total value of the tradable or marketable shares of a publicly traded company. It is equal to the share price times the number of shares outstanding.
COMPARATIVE ADVANTAGE: This refers to the ability of a person or a country to produce a particular good or service at a lower marginal and opportunity cost over another.
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