The Development of Entrepreneurship in a Depressed Economy

1.1 Introduction

The Entrepreneurship refers to many things to variation of people as applicable to their values and observations of what it means to them. Nwabuama (2004) sees Entrepreneurship as the identification of the general characteristics of entrepreneurs and how potential entrepreneurs can be trained in management techniques needed for effective performance of persons for long time service of an organization after the acquisition of occupational skills. For Ebele (2008), Entrepreneurship is the teaching of knowledge and a skill that enables the students to plan, start and run their own business.

As a prelude to other parts of this study, this chapter will discuss the background upon which this study was initiated, the statement of problems that led to this study, the Aim and Objectives of the study. Others are Significance of the study, Scope of work, Research hypothesis and questions, Limitations of the Study and Definition of technical terms.

1.2 Background of Study

In a depressed country like ours, global development is entering a phase where entrepreneurship will increasingly play a more important role. There is a need for the Nigerian economy to sustain growth through sustainable access to resources, knowledge, markets, and industrialization putting a premium on innovative entrepreneurship.

There is no doubt that Nigeria is naturally blessed with entrepreneurship opportunities; yet the realization of the full potential of these opportunities has been dampened by the adoption of inappropriate industrialization policies at different times. Several policy interventions that were aimed at stimulating entrepreneurship development via small and medium scale enterprises promotion, based on technology transfer strategy, have failed to achieve the desired goals as it led to the most indigenous entrepreneurs becoming distribution agents of imported products as opposed to building in-country entrepreneurial capacity for manufacturing, mechanized agriculture and expert services (Thaddeus, 2012).

Entrepreneurship is the cornerstone and at the heart of the free enterprise economy (Popoola, 2014). Entrepreneurship is an activity that involves the discovery, evaluation and exploitation of opportunities to introduce new goods and services, ways of organizing, markets, processes, and raw materialthrough organizing efforts that previously had not existed (Shane and Venkataraman, 2000; Venkataraman, 1997).

Economic development here refers to a qualitative process that describes changes in the overall economy aiming to enhance the economic well-being of a community regardless of its size. In economic literature, economic development is frequently described as being a three-legged stool where each leg represents one economic development strategy. The first leg usually refers to business attraction; the second one to business retention and the third one to entrepreneurship development. However, because this analogy assumes the existence of equality and separation among economic development strategies, more useful analogy is that of a pyramid as Dabson (2005) pointed out.

The 2012 Global Entrepreneurship Monitor (GEM) has empirically identified Nigeria as one of the most entrepreneurial countries in the world. The study showed that 35 out of every 100 Nigerians (over a third) are engaged in some kind of entrepreneurial activity or the other. It is therefore imperative at this point in time to critically evaluate not just the principles of entrepreneurship but the practice and its crucial role in fostering economic growth and development in a developing economy like Nigeria. Entrepreneurship is not synonymous with small business. Certainly, small firms are an outstanding vehicle for individuals to channel their entrepreneurial ambitions. The small firm is an extension of the individual in charge (Lumpkin and Dess 1996).

However, entrepreneurship is not restricted to persons starting or operating an (innovative) small firm. Enterprising individuals in large firms, the so-called ‘entrepreneurs’ or ‘corporate entrepreneurs’, undertake entrepreneurial actions as well. Nigeria’s GDP growth rate of between 6 − 8 percent in the last ten years shows the country is one of the fastest growing economies in the world. The implication is that any good business established is capable of generating unusual and above average returns. It is one of the few countries with the highest returns on investment anywhere in the world- money, market, capital market, mutual funds, real estate and property, entrepreneurship, etc (Popoola, 2014). Furthermore, for entrepreneurs to play an appropriate role, the role of the state remains important; if not more so than before. Strong states, as regulators and gatekeepers, play a particularly vital role. In the absence of appropriate ‘rules of the game’, entrepreneurship may result in undesirable social outcomes, including corruption, crime, speculation and financial crises, and may worsen the vulnerabilities of people during natural disasters (UN Report, 2011).

Therefore, in Nigeria where the research was carried out, the activities that was conducted is to know the Development of Entrepreneurship in a Depressed Economy.

1.3 Statement of Problems

The present state of inflation in Nigeria affects, income earners especially those with fixed income and very poor ones in the society find it difficult to match with the increasing prices of goods and services. This continues as long as price rises and there is fall in the purchasing power. Standard of living must be emphasized. More values of money is being required by individuals for the purpose of desired products during an inflation period as opposed to normal economic situations. This brings about decline in the purchasing power. This result in a problem as the ability of individuals to purchase “products” in the light of continued rising prices become reduced.

Also of importance is the issues of inflation giving rising to the different society wish income as the distinction factor. There is a large gap between income of fixed income earners and profit earner. This is because the income profit earners rise with the rising prices of products as opposed to those of fixed income earners.

Promoter of small and medium enterprises are people with ideas, dreams and imaginations but majority of the entrepreneurs lack the needed financial means to translate their dreams and aspirations into concrete that will earn them the desire wealth. In spite of the roles play by SMEs in the Nigeria economy, the sub-sector has continued to suffer from the other numerous of problems. The main problem of this study is to identify the issues and problems that militate against entrepreneurship development in Nigerian and the prospects

1.4 Aim and Objectives of Study

The aim of the study is to examine the Development of Entrepreneurship in a Depressed Economy. In achieving this aim, the following specific objectives were laid out as follows to:

1. Identify the problems that militate against sustainable entrepreneurship development in Nigeria.
2. Examine critically the sources of these challenges.
3. Examine the prospects of entrepreneurship development in the nation’s economy.
4. Proffer solutions to these issues and problems that militate against entrepreneurship development in Nigerians

1.5 Research Questions

The study came up with research questions so as to be able to ascertain the above stated objectives. The specific research questions for the study are stated below as follows:

• What are the problems that militate against sustainable entrepreneurship development in Nigeria?
• What are the sources on the challenges inhibiting the sustainability of entrepreneurship development?
• What are the prospects of entrepreneurship development in the nation’s economy?

1.6 Research Hypothesis

In order to pursue the objective of this study, the following generalized statements have been designed to guide and aids in obtaining the result for the experiment to be conducted. For this work, the null hypothesis will be represented with H0 while the alternative hypothesis will be represented with hypothesis H1.

Hypothesis One

• H0: There is no existing relationship between adequate provisions of capital to the entrepreneurs and the success of entrepreneurship development in Nigeria
• H1: There is an existing relationship between adequate provisions of capital to the entrepreneurs and the success of entrepreneurship development in Nigeria

Hypothesis Two

• H0: There is no existing relationship between socio-economic, political and environmental factors and the development of entrepreneurship in Nigeria
• H1: There is an existing relationship between socio-economic, political and environmental factors and the development of entrepreneurship in Nigeria

1.7 Significance of Study

This study would be of immense benefit to both the financial institution and small and medium sale industries in Nigeria, as well as the counties policy makers who have desire to place Nigerian on a sound economic and industrial footing. When this research is concluded, it would have contributed to the study of knowledge already pilling on the issue of constraints on growth and support of entrepreneur development, which cannot be over looked in a depressed nation like Nigeria.

Since it is also the aspiration of our national policy on education to train our youths to be self-reliant or self-employed after school, this study will therefore stimulates their zeal to involve in the establishment of SMEs. Finally, the findings of this study will serve as a reference material to scholars who intend to embark on a project of this nature.

1.8 Scope of the Study

This study centers on the development of entrepreneurship in a depressed economy, using Nigerian Association of Small-Scale Industrialists (NASSI) Enugu State Chapter as it case study. In the course of the study, the researcher encounters some constrain which limited the scope of the study;

1.9 Limitations of the Study

During the course of this study, many things militated against its completion, some of which are:

1. Time Constraint: The time frame given to accomplish this project was very short due to school academic calendar and it was carried out under pressure which made the researcher not to implement some necessary features.
2. Research material: availability of research material is a major setback to the scope of the study.
3. Frequent power failure: This made the researcher append more money on fuel to ensure sustainable power.
4. Financial Constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

1.10 Definitions of Terms

The following terms were used in the course of this study:

• Economy Growth: This is when the real per capital income of a country increases over time.
• Entrepreneur: This is a person who starts or organizes a business that has a financial risk.
• Impact: Impact is defined as the action of one object coming forcibly into contact with another or a marked effect or influence.
• Organization: An organization or organization is an entity comprising multiple people, such as an institution or an association, which has a collective goal and is linked to an external environment
• Creativity: Creativity is a phenomenon whereby something new and somehow valuable is formed. The created item may be intangible or a physical object.
• Innovation: Innovation is often also viewed as the application of better solutions that meet new requirements, unarticulated needs, or existing market needs.
• Entrepreneurial: entrepreneurial is a person who organizes and manages any enterprise, especially a business, usually with considerable initiative and risk.
• Development: Development is defined as the process in which someone or something grows or changes and becomes more advanced.
• Entrepreneurship: Entrepreneurship is the process of designing, launching and running a new business, which is more often than not, initially a small business, offering a product, process or service for sale or hire. The people who create these businesses are called entrepreneurs. Entrepreneurship has been described as the “capacity and willingness to develop, organize and manage a business venture along with any of its risks in order to make a profit.
• Depressed: A mental health disorder characterized by persistently depressed mood or loss of interest in activities, causing significant impairment in daily life.
• Economy: An economy is an area of the production, distribution, or trade, and consumption of goods and services by different agents. Understood in its broadest sense, ‘The economy is defined as a social domain that emphasizes the practices, discourses, and material expressions associated with the production, use, and management of resources’.
• Constraints: A hindrance of business not forwarding or not prospering. Enterprises: It means any establishment engaged in production, repairs or services to satisfy human wants and make room for profits.