ABSTRACT
This is to
examine the impacts of entrepreneurship in the economic development of the
Nigerian economy. In this research work, the method of estimation is based on
the use of multiple regression technique.
Unique
relationships between entrepreneurship in the economic development contribution
were established. Our empirical findings also suggests that there is
significant relationship between entrepreneurship development and its
contributions to economic development of Nigerian economy e.g. unemployment,
investment etc although the problems of entrepreneurship development have not
been totally resolved but it is certain that in no distance future all these
problems of entrepreneurship development will be eliminated.
TABLE OF CONTENTS
CHAPTER ONE
1.1 Background of the Study
1.2 Statement
of the Problem
1.3 Aim and Objectives of the Study
1.4 Statement
of Research Questions
1.5 Significance of the Study
1.6 Statement
of Research Hypotheses
1.7 Research Methodology
1.8 Scope of the Study
1.9 Limitation
of the Study
1.10 Definitions
of Terms
1.11 Plan of the
Study
References
CHAPTER TWO:
LITERATURE REVIEW
2.1 Concept of
Entrepreneurship
1.2 The Role
of Entrepreneurship
2.3 The Necessity
of Entrepreneurship
2.4 Characteristics
of Entrepreneurship
2.5 Problems
Facing Entrepreneurship Development
2.6 Prospects
of Entrepreneurship
2.7 Entrepreneurship
and Economic Development
2.8 Entrepreneurship
and Informal Sectors
References
CHAPTER
THREE:
STRUCTURAL
COMPOSITION OF THE ENTERPRENEURSHIP DEVELOPMENT IN NIGERIA
3.1 Historical
Background of Entrepreneurship Development
3.2 Past
Attempt to Alleviate Poverty and Why They Failed
3.3 The Role of
Entrepreneurship in Alleviating Poverty
3.4 The
Role and Impact of Small Scale Businesses in the Promotion of Economic Growth
and Development
3.5 Overview of
Small-Scale Businesses Financing in Nigeria
3.6 Central
Bank of Nigeria's Support and Schemes for Small Businesses Financing
3.6.1 World Bank
Assisted SME Loan Project
3.7 Problems
Militating Against Small Scale Businesses in Nigeria
3.8 Success
Factors for the Small Scale Businesses in Nigeria
CHAPTER
FOUR:
DATA
ANALYSIS, PRESENTATION INTERPRETATION OF
RESULTS
4.1 Introduction
4.2 Sources of
Data
4.2.1 Choice of
Econometric Techniques
4.3 Identification
of Variables and Definition of Terms
4.3.1 Model
Formulation and Statement of Hypotheses
4.3.2 Specification
Bias
4.4 Criteria
for Decision-Making
4.5 Specification
of Data
4.6 Model
Analysis and Interpretation of Results
CHAPTER
FIVE:
SUMMARY,
FINDINGS, RECOMMENDATIONS, CONCLUSION
5.1 Summary
5.2 Findings
5.3 Recommendations
5.4 Conclusion
References
Appendix
CHAPTER ONE
1.1 BACKGROUND OF
THE STUDY
Perception
of African entrepreneurship among scholars and researchers seem to differ
considerably. At one extreme is the view that, for one reason or the other,
technical entrepreneurial talent that involves the establishment and management
of manufacturing industries for productive activities in the real sector of the
economy, is lacking in Africa. According to a World Bank study carried out by
Nil-,-Henrik March in 1995, the poor growth performance of most sub-Saharan
countries and, in particular, the slow rate of industrialization could be taken
to support such a dismal perception. Supporters of this view May point to the
fact that the kind of economic policies that have been followed In many African
countries in the two to three decades after political Independence have not
always been conducive to private enterprise. This position is consistent with a
third. view by Adjebeng-Asem (1989) that the African entrepreneur is alive and
well, brat that he or she, rather than undertaking manufacturing businesses,
has been diverted to non-productive, rent-seeking activities which researchers
have referred to as commercial entrepreneurship.
In spite of
this critical gap in Africa's development process, researchers scholars around
the world have long identified the role of entrepreneurs and entrepreneurship
in the economic development of nations. For instance, Dozie (2005) argues that
this vital factor of production formed the bedrock of the classical thesis of
Joseph Schumpeter (1934) who established that no nation would break the
barriers of development without a critical mass of entrepreneurs. This
assertion, which formed the basis of Schumpeterian model economic growth, has
helped many developed and even developing nations accelerate their pace of
development by focusing on appropriate incentives support entrepreneurial
activity (Dozie, 2005). It is the entrepreneurs who generate the critical momentum
an economy requires for economic growth by breaking new grounds In human
endeavour as a result of the vital characteristics or attributes they posses.
Unfortunately, after more than four decades of import substitution strategy,
structural adjustment programme commercialization and privatization of ailing
state owned enterprises general economic decline, the manufacturing sector's
contribution to the Gross Domestic Product (GDP) in Nigeria is still very
small. It is plagued by productivity and low quality output. This is
compounded by the consequent increase in competition from imports, which has
resulted in downsizing or outright closure of many manufacturing industries.
Therefore,
the extent to which the restructuring of the private sector as engine of growth
of the economy will succeed is dependent on the fostering and development of
technical entrepreneurship among the indigenous population. In addition,
theoretical and empirical investigations have emphasized the crucial role that
technological innovation and technical entrepreneurship play in fostering
economic development. These investigations are now seen as crucial and are also
recognized as important components of technological policy and economic
planning.
1.2 STATEMENT OF
THE PROBLEM
The present
emphasis by government and stakeholders on indigenous technical innovation and
entrepreneurship stems from the failure of past attempts through the import
substitution strategy to stimulate development by borrowing or transferring
advanced and sometimes inappropriate and sustainable technologies from
developed countries. This position was further reinforced by Adjebeng-Asem
(1989) where it was argued that governments in most developing economies such
as Nigeria were criticized for paying inadequate attention to the need for
accelerated economic growth and for not harnessing the abilities of their own
citizens for technological innovations and entrepreneurship.
Critics
also conclude that these developing countries depend on exogenous technologies
that are inappropriate for their environment (ibid, 1989). This has been
responsible for Nigeria's exports which have largely been based on raw
materials and semi-manufactured goods with the petroleum sector as the most
important. Less than 5% of these exports are on the average attached to
knowledge intensive goods and services Adjebeng-Asem (1989) Akeredolu-Ale
(1975). The problems became acute in the 1980's and early 1990's, when Nigeria
experienced stagnating industrial output and decreasing crude oil prices while
industrialization through the production of indigenous technological
development became central topics in the industrial policy debates.
As a result
of this, United Nations Development Programme UNDP, (1992) and United Nations
Industrial Development Organization UNIDO, (1994) argued that if Nigeria is to
join the league of industrialized economies, industrial activities have to
converge and focus more on knowledge-based production particularly in the small
scale manufacturing and processing industries. This view was partially
enunciated in the various development national budgets, rolling plans and in
the current reform programmes elaborated in the National Economic Empowerment
and Development (NEEDS) Federal Government of Nigeria, (2004). The central
theme of the policy has been that small-scale industries should spearhead the
nation's drive towards economic recovery. Studies have shown that small
industries in many countries provide the mechanism for promoting indigenous
entrepreneurship, enhancing greater opportunities per unit of capital invested,
and aiding the development of local technology Sule (1986), Nils-Henrik and
March (1995). In Nigeria, small-scale businesses represent about 90% of the
industrial sector in terms of the number of enterprises (Ajayi, 2002). Similarly, they have also
contributed significantly to economic development through employment, job
creation and sustainable livelihood Nigerian Investment Promotion Commission
(2003). In spite of their significance, and contribution of small industries to
the national economy, many problems and constraints still exist in promoting
their development and growth.
Another
obstacle to the modernization of small industries are the persistence of a low
level of technology, the shortage and inadequate entrepreneurial skills of
operators and the absence of an effective management techniques. Their low
product quality makes it difficult for them to compete in technologically
driven, knowledge based and export oriented globalize economy. There is
therefore the need to tap the considerable R&D efforts that take place at
universities, polytechnics, monotechnics and other public and private sector
research institutions through increased commercialization or technology
transfer of research results. However, this can only be achieved through a
deliberate intervention strategy of developing a core of characteristics among
the small industry operators to enhance production efficiency, quality and
output. The failure of past efforts by small industry operators and the little
intervention by government necessitate the need to assess why indigenous
technical innovations, management practices and other key success factors in
business are often not translated into feasible business ventures despite the
fact that the country has the technological need. These issues according to researchers such as
Akeredolu-Ale (1975), Afonja (1986) and Adjebeng-Asem (1989) imply a link between technical innovation, nascent
entrepreneurship and a much broader level of technological development. The
present study focused mainly on a narrow aspect of the link of nascent
entrepreneurial characteristics and its effect on the development and growth of
small-scale manufacturing industries. Against this background, the search study
assessed the impact of technical entrepreneurial characteristics on the
performance of small scale manufacturing industries in Nigeria.
1.3 AIMS AND OBJECTIVES OF THE STUDY
The main
objective of this study is to assess the impacts of entrepreneurship
development on Nigerian Economy and also to appraise the degree of
entrepreneurship development. Contribution increasing the standard of living in
the Nigerian economy. The specific objectives therefore are:
·
To evaluate critically the technical characteristics on the performance
manufacturing industries in Nigeria.
·
To emphasize the crucial role that technological innovation and technical
entrepreneurship play in fostering economic development, and;
·
To examine the role of the small scale on the Nigeria's economy.
1.4 STATEMENT OF RESEARCH QUESTIONS
The
following questions are pertinent to this study:
i. Is there any future for entrepreneurship in Nigeria?
ii. Does
entrepreneurship contributes to the economic development?
iii. To
what extent/purpose is government reforms on small scale enterprises contribute
to the development of entrepreneur investment?
v. Has the development of the
manufacturing sector led significantly to the promotion of economic growth and
development?
v. What
are the likely problems encountered by the manufacturing industry and their
prospects in this era of financial system reforms?
1.5 SIGNIFICANCE OF THE STUDY
In the
literature on entrepreneurship, there is a broad consensus among policy makers, researchers and practitioners that a
fundamental cause of difficulties experienced by many developing countries such
as Nigeria is lack of technical entrepreneurship. This is manifested in the low
rate at which small scale
manufacturing industries are created and at the high rate of mortality in the
sub-sector Ajakaye (1999).
It is
particularly evident in Nigeria where there are many barriers militating
against the development and growth of the real sector that is the bedrock of
any economy. Such barriers inhibit entrepreneurial progress in the country
despite a number of strengths and opportunities that encourage the prevalence
of "creative imitators" rather than "innovators" with low
level of entrepreneurial talent Umoh (2001).
Adegbite
and Van - Hattum (2002) suggest that the main prerequisite for such progress in
Nigeria is the development of an institutional framework and enterprise culture
capable of creating the optimum condition for technical entrepreneurship. Unfortunately,
a number of models perceived to be relevant in international context have not
been effective in Nigeria due to lack of a holistic, equitable approach to
industrial development and socio-economic transformation. This has necessitated
the need for this study to critically examine how technical entrepreneurial
characteristics affect the start-up of small scale industries and their
subsequent performance.
In the last
century, many writers have identified entrepreneurship with the function of
uncertainty and risk bearing and, others with the coordination of productive
resources, the introduction of innovation and the provision of technical
know-how Hoselitz (1952) cited in Burnet, (2000). The necessity of
entrepreneurship for production was also recognized by Alfred Marshall in 1890
when he asserted in his treatise of Principles of Economics that there are four
factors of production i.e. land, labour, capital and organization.
Entrepreneurship, both technical and commercial, is the driving element behind
organization. He further argued that the skills associated particularly with
technical entrepreneurship are rare and limited in supply and that the ability
of entrepreneurs are so great and so numerous that very few' people can exhibit
them all in a very high degree. Another research carried out by Penrose (1959)
posit that entrepreneurship, particularly technical en entrepreneurial involves
identifying opportunities within the economic system, filling market
deficiencies through input-completing activities including the process
identifying, developing and bringing a vision to life. This vision may be an
innovative idea, an opportunity or a better way of doing something. The end
result of this process is the creation of a new venture, the expansion of an
existing one carried out under conditions of risks and considerable uncertainty
Meyer (1976).
Therefore,
in recognition of the considerable risks and uncertainty associated with
entrepreneurship, Afonja (1999) made a clear distinction between technical
entrepreneurship and commercial entrepreneurship. The former involves product
manufacture or the provision of technical services while the latter involves
trading, buying and selling or provision of nontechnical services. The
prerequisites for success and risk factors involved significantly for the two
types of entrepreneurship. Therefore, the focus of this study is on the effect
of technical entrepreneurial characteristics on the performance of small industry
manufacturing operators in the food, textiles, and wood processing and
fabricated metal products all of which are generally important in the
industrialization of a developing economy such as Nigeria.
1.6 STATEMENT OF
HYPOTHESIS
For the
purpose of this study, the following hypotheses are formulated to be tested:
Hypothesis
1
Ho: Entrepreneurship
development does not contribute significantly to the development of Nigeria
economy.
Hi: Entrepreneurship development
contributes significantly to the development of Nigeria economy.
Hypothesis 2
Ho: Entrepreneurship
development does not contribute to the performance of small- scale manufacturing
industries in Nigeria.
HI: Entrepreneurship development contributes
significantly to the performance of small-scale manufacturing industries in
Nigeria.
1.7 METHODOLOGY
The method
employed both primary and secondary sources of data collection techniques in
finding the impacts of entrepreneurship development on Nigerian Economy. The
primary source involves simple chi-square. While the secondary source will make
use of questionnaires, tables, charts etc.
1.8
SCOPE OF THE STUDY
The scope
of this study, viewing it from the perspective angle of an entrepreneur
emphasis will be laid on the rule, problems militating against their
performance in the Nigeria Economy
1.9
LIMITATION OF THE STUDY
This
project may suffer some limitations which include financial, time, geographical
and communication problem, as well as inability of some people who are not
ready to respond or entertain any questions. This project will be limited to
impact of entrepreneurship development in the context of Nigerian economy.
1.10 DEFINITION OF
TERMS
i. Entrepreneurship:
This is defines as self-employment of
any sort where the entrepreneur is the bearer of uncertainty and risk.
ii. Financial
Intermediaries: This refers to as the function of channeling funds between those who wish to lend and those who wish to
borrow.
iii. Investment
Planning: This IS the process of evaluating proposed investment in
specific fixed assets and the benefits to be obtained from their acquisition
iv. Entrepreneur:
This is defined as one who organizes,
manages and assumes the risks of a business enterprise.
v. Investment
Decisions: This is refers to as investment
criteria or investment techniques.
1.11 PLAN OF THE STUDY
The
fundamental purpose of this study is to show that within the context of Nigeria
developmental effort, entrepreneurship development has aided investment and
economic development to a greater extent, than generally recognized.
In chapter
one, small scale industries will be made reference point of study. In the
course of the study, the researcher will take a look at the conceptual role of entrepreneurship
development in the economic development of Nigerian Economy. Also characteristics
of an entrepreneur, their developmental roles, prospects and problems, militating
against performance were discussed in detail.
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