THE IMPACT OF ENTREPRENEURSHIP IN THE ECONOMIC DEVELOPMENT OF THE NIGERIA 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

The role of entrepreneurship in the growth and development of our dear nation cannot be overlooked and as a result of the consistent rise in the level of unemployment and the upward increase in the level of poverty in Nigeria, it has become crucial for Nigerians to quit searching for white collar jobs that are not available and start creating employment for themselves. The forces of entrepreneur are strong in Nigeria because most people see entrepreneurial activities as what is primarily based on essential due to the poor economic situation. We do not seem to realise the fact that entrepreneurship development is the base of all economic evolution of any nation. The current Nigerian economy is largely dominated by the oil industry. The labour force is radically growing, as is the unemployment rate currently at 20%, with millions of workers underemployed. Nigeria is endowed with the largest domestic market in Africa a wide range of natural resources coupled with a diversely skilled labour pool. Given these economic realities, the country must constantly create new jobs, and diversify the industrial and commercial sector to take advantage of human and natural resources.

The activities of entrepreneurs have been found to be capable of making impact on the economy of a nation and quality of life of the people through economic growth; employment generation and empowerment of the disadvantaged segment of the population, which include women and the poor. Small and Medium Enterprises (SMEs) is perceived as a pride of basically every country or state. Because of SMEs’ significant roles in the development and growth of various economies, they have appropriately been termed as the engine of growth and catalysts for socio-economic transformation of any country. SMEs are perceived as a real instrument for the achievement of national economic objectives of employment generation and poverty reduction at low investment cost. Other central benefits of vibrant SMEs are the access to the infrastructural facilities the stimulation of economic activities such as providers of various items and distributive trades for items produced and needed by the SMEs, stemming from rural urban migration, enhancement of standard of living of the employees of the SMEs and their dependents as well as those who are directly or indirectly associated with them.

Various government of the nation have begun to find solutions on how to involve the private sector in the developmental process of their country’s economy which is one of the responses to the challenges of development of entrepreneurial in developing countries. Nigeria had even taken a bold step by including entrepreneurial studies in the academic curriculum of her education system and with the introduction of National Directorate of Employment (NDE) scheme. The belief of such policy makers is that such decision will inculcate entrepreneurial spirit in the mind of people so as to prepare them for wealth creation through entrepreneurship (Fasua, 2006). Entrepreneurship is very crucial to the development of a country’s economy, especially countries like Nigeria. Entrepreneurship is sine qua non to national development poverty eradication and employment generation it is the bed rock of any nation’s industrialization.

The essential of entrepreneurship for productivity was originally credited to Alfred Marshall in 1990. In his famous book; Practice Principle of Economics, Marshall ascertained that there are four factors of production; Land, Labour Capital and organization. These factors are properly utilized by an entrepreneur. Thus entrepreneur creates new commodities or improves the plan of producing an old commodity (Marshall, 1994). Therefore, early entrepreneurs were characterized with production and manufacturing. In a situation like this, the producers often started with small capital. Early entrepreneurship began with trade by barter even before the advent of money. Therefore most of the modern entrepreneurs were engaged in retail trade and also sole proprietorship.

---

1.3 Statement of Problems

With current challenges in the global economy, new and innovative strategies are emerging in the bid to stimulate and sustain growth in national economies. Entrepreneurship is one model that is deemed critical to the formulation and implementation of these strategies. According to a research by The Global Entrepreneurship and Development Institute, it was found that USA is a world leader when it comes to supporting its entrepreneurs in respect to business formation, expansion, and growth. They also finance new businesses through venture capital. This type of financial capital is provided to early-stage, high-potential and riskier start-up companies. Countries like Australia and Sweden came second and third respectively according to the 2014 statistics. Some of these countries’ economies are ranking very high because they understand the effects entrepreneurs play in the growth of their economy. Their GDP are always on the increase thereby increase in their economy.

In spite of this, little is known about the profile of the Nigerian entrepreneur and how they engage with the constantly evolving policy context. This study therefore aimed at better understanding their characteristics the impact and role of entrepreneurship on the Nigeria economic growth.

---

1.4 Aim and Objectives of Study

The aim of the study is to scrutinize the Impact of Entrepreneurship in the Economic Development of the Nigeria Economy. In achieving this aim, the following specific objectives were laid out as follows:

1. To investigate the prevalence of entrepreneurship on the Nigeria economic growth
2. To assess out the contributions of entrepreneurs to the economic development in Nigeria
3. To investigate the factors that influence entrepreneurs to economic development the Nigerian economic development

---

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 is the prevalence of entrepreneurship on the Nigeria economic growth?
• What are the contributions of entrepreneurs to the economic development in Nigeria?
• What are the factors that influence entrepreneurs to economic development the Nigerian economic development?

---

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: Low entrepreneurial activities does not have any significant correlation with economic growth in Nigeria
• H1: Low entrepreneurial activities have a significant correlation with economic growth in Nigeria

Hypothesis Two

• H0: There is no significant relationship between entrepreneurship and economic growth of Nigeria
• H1: There is a significant relationship between entrepreneurship and economic growth of Nigeria

---

1.7 Significance of Study

Findings from the study will be of immeasurable importance to the Nigerian government all and aspiring entrepreneurs in Nigeria. It will serve as a manual that will guide them on how to about using entrepreneurship to economically develop the country and raise their standard of living. It will as well help to bridge the gap that might have existed in the entrepreneurial activities.

This study will be of immense benefit to other researchers who intend to know more on this study and can also be used by non-researchers to build more on their research work. This study contributes to knowledge and could serve as a guide for other study.

---

1.8 Scope of the Study

This study investigated the roles and impacts entrepreneurship has on the economic growth and how economic growth will be improved through entrepreneurship. Evaluating entrepreneurship as a tool in the growth and development of Nigerian economy seems too broad for the time frame of this research work therefore, the scope of this work was confined towards the contribution of small and medium scale enterprise to the development of Nigerian economy.

---

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.
• D.E.: National Directorate of Employment
• 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.