IMPACT OF ENTREPRENEURSHIP IN THE ECONOMIC DEVELOPMENT OF THE NIGERIA ECONOMY
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IMPACT OF ENTREPRENEURSHIP IN THE ECONOMIC DEVELOPMENT OF THE NIGERIA ECONOMY
Chapter one
1.1 Background of the Study
Scholars and academics appear to hold quite different perspectives on African entrepreneurship. At one extreme, some argue that Africa lacks technical entrepreneurial aptitude for establishing and managing manufacturing enterprises for productive activities in the real sector of the economy.
According to a World Bank research conducted by Nil-Henrik March in 1995, the poor growth record of most sub-Saharan nations, particularly the slow rate of industrialization, might be used to justify such a pessimistic view.
Supporters of this position may point out that the type of economic policies that have been implemented In many African countries, the two to three decades after political independence were not always favourable to private entrepreneurship.
This position is compatible with the third. Adjebeng-Asem (1989) believes that the African entrepreneur is still alive and well, but that instead of operating manufacturing firms, he or she has been diverted to non-productive, rent-seeking activities known as commercial entrepreneurship.
Despite this important gap in Africa’s development process, experts and intellectuals from all over the world have long recognised the importance of entrepreneurs and entrepreneurship in national economic development.
For example, Dozie (2005) contends that this crucial element of production served as the foundation for Joseph Schumpeter’s (1934) classical thesis, which said that no nation could overcome development constraints without a critical mass of entrepreneurs.
This argument, which served as the foundation for the Schumpeterian model of economic growth, has assisted many developed and even developing countries in accelerating their development by focusing on proper incentives to stimulate entrepreneurial activity (Dozie 2005).
Entrepreneurs create the necessary energy for economic progress by forging new ground. Human endeavour as a result of the key features or attributes they possess.
Unfortunately, despite more than four decades of import substitution strategy, structural adjustment programme commercialization, and privatisation of ailing state-owned enterprises, Nigeria’s manufacturing sector continues to contribute very little to the country’s GDP. It is plagued by high productivity and low-quality output. This is aggravated by the increased competition from imports, which has resulted in the downsizing or complete closure of numerous manufacturing industries.
As a result, the success of the private sector reorganisation as an economic growth engine is contingent on the promotion and development of technological entrepreneurship among the indigenous population.
Furthermore, theoretical and empirical research have highlighted the critical role that technology innovation and technical entrepreneurship play in promoting economic growth. These investigations are now regarded as critical and vital components of technical policy and economic planning.
1.2 Statement of the Problem
The current emphasis by the government and stakeholders on indigenous technical innovation and entrepreneurship stems from the failure of previous attempts to stimulate development through the import substitution strategy, which involved borrowing or transferring advanced, sometimes inappropriate, and sustainable technologies from developed countries.
This position was reinforced by Adjebeng-Asem (1989), who argued that governments in most developing economies, including Nigeria, were criticised for paying insufficient attention to the need for accelerated economic growth and for failing to leverage their own citizens’ abilities for technological innovations and entrepreneurship.
Critics also infer that these emerging countries rely on technologies that are not appropriate for their environment (ibid., 1989). This has contributed to Nigeria’s exports, which have primarily been based on raw materials and semi-manufactured items
with the petroleum sector being the most important. On average, less than 5% of these exports are associated with knowledge-intensive items and services (Adjebeng-Asem, 1989; Akeredolu-Ale, 1975).
The challenges became significant in the 1980s and early 1990s, when Nigeria’s industrial output stagnated and crude oil prices fell, and industrialization through indigenous technological development became a prominent theme in industrial policy debates.
As a result, the United Nations Development Programme (UNDP) and the United Nations Industrial Development Organisation (UNIDO) argued that if Nigeria is to join the ranks of industrialised economies, industrial activities must converge and focus more on knowledge-based production, particularly in small-scale manufacturing and processing industries.
This viewpoint was largely articulated in the numerous development national budgets, rolling plans, and current reform programmes elaborated in the National Economic Empowerment and Development (NEEDS) Federal Government of Nigeria (2004).
The basic idea of the programme has been that small-scale industries should lead the nation’s economic recovery efforts. Studies have demonstrated that small companies in many nations provide the mechanism for boosting indigenous entrepreneurship, increasing opportunities per unit of capital spent, and assisting the development of local technology. Sule (1986); Nils-Henrik & March (1995).
In Nigeria, small-scale businesses account for over 90% of the industrial sector’s total number of enterprises (Ajayi 2002). Similarly, they have made major contributions to economic development through employment, job creation, and sustainable livelihood.
Nigeria Investment Promotion Commission (2003). Despite their importance and contribution to the national economy, small industries continue to face numerous challenges and limits in terms of development and expansion.
Another impediment to the modernization of small industries is the continuation of low levels of technology, the scarcity and insufficient entrepreneurial skills of operators, and the lack of effective management approaches.
Their low product quality makes it difficult for them to compete in a technologically advanced, knowledge-based, export-oriented global economy.
There is hence a need to capitalise on the significant R&D activities that take place at universities, polytechnics, monotechnics, and other public and private sector research institutes through increasing commercialization or technology transfer of research outputs.
However, this can only be achieved through a planned intervention strategy that focuses on building a core set of qualities among small industry operators in order to improve production efficiency, quality, and output.
The failure of previous efforts by small industry operators, as well as the government’s lack of intervention, necessitate an examination of why indigenous technical innovations, management practices, and other key success factors in business are frequently not translated into viable business ventures, despite the country’s technological needs.
According to academics Akeredolu-Ale (1975), Afonja (1986), and Adjebeng-Asem (1989), there is a link between technical innovation, fledgling entrepreneurship, and a much broader level of technological progress.
The current study focuses primarily on a particular component of the relationship between emerging entrepreneurial qualities and their impact on the establishment and evolution of small-scale manufacturing industries.
Against this backdrop, the search study examined the impact of technical entrepreneurial traits on the performance of Nigeria’s small-scale manufacturing firms.
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