Entrepreneurship As A Tool For Sustainable Employment

Project and Seminar Material for Entrepreneurship

Abstract

This research work was carried out to show the importance of Entrepreneurship as a tool for sustainable job creation, a key factor needed to grow every country’s economy especially in sub-Saharan Africa or third world countries. This study analyses entrepreneurship and how it has grown over the years in Nigeria. It also helps to examine factors that can affect entrepreneurship in a country. One hundred and seven (107) questionnaires were administered to gather responses to be analyzed, which is used in testing the hypotheses utilized. With almost a 100 percent response rate, simple percentage method was used for the analysis, chi-square statistical tool was employed to test the hypothesis. Both personal and environmental factors were seen to be important to enhance the entrepreneurial activities in an economy.

The study revealed some key issues. The major findings of this research were that; the availability of this factors mention previously; which are personal factors (such as leadership style, educational qualification, self-efficacy, technical factors) and environmental factors such as (legal structure, stable economic growth, technology, political stability) will promote entrepreneurship, and help eradicate poverty as well as unemployment. The realization of entrepreneurship as a tool for sustainable job creation is the prime responsibility of both the government and individual (entrepreneur). It is of utmost importance that the government provides a conducive environment, and that individuals (entrepreneurs) are prepared to face any hurdle to in order to succeed.

Chapter One

Introduction

1.1 Background of the Study

Entrepreneurship has never been more important than it is today in this time of financial crisis. At the same time, society faces massive global challenges that extend well beyond the economy. Innovation and entreneurship provide a way forward for solving the global challenges of the 21st century, building sustainable development, creating jobs, generating renewed economic growth and advancing human welfare. When we speak about entrepreneurship, we are defining it in the broadcast terms and in all forms – entrepreneurial people in large companies, in the public sector, in academia and, of course, those who launch and grow new companies. Now more than ever, we need innovation, new solutions, creative approaches and new ways of operating. We are in uncharted territory and need people in all sectors and at all ages who can “think out of the box” to identify and pursue opportunities in new and paradigm changing ways.

Entrepreneurship can be a societal change agent, a great enabler in all sectors. Not everyone needs to become an entrepreneur to benefit from entrepreneurship but all members of society need to be more entrepreneurial. The public sector, private sector, academia and non-profit sectors all have roles to play in facilitating the development of effective ecosystems that encourage and support the creation of innovative new ventures. We need to create the types of environments that are conducive to encouraging entrepreneurial ways of thinking and behaving.

Much has been written about the impact of entrepreneurship on economic growth. If we are to attain the Millennium Development Goals of reducing poverty, we must develop human capital in all countries and societies, in remote regions as well as major cities, and world. While the contexts around the world vary dramatically, entrepreneurship, in its various forms, can equip people to proactively pursue those opportunities available to them based on their local environments and cultures. We have seen a number of “waves” in entrepreneurship education, starting a century ago, developing in phases and now expanding exponentially. By making entrepreneurship education available to young people and adults alike, we are preparing the next wave of entrepreneurs to enable them to lead and shape our institutions, businesses and local communities and create an enabling environment for sustainable employment.

Entrepreneurship is a sure way to bringing fulfillment to the aspiration of an individual, and a major weapon to curbing unemployment, poverty and underdevelopment problems in any country. Consequently, its importance to the economic wellbeing of an individual and family cannot be over-emphasized. Entrepreneurship is first and foremost a mindset of human beings, focused towards the generation or profitable ideas. Entrepreneurs are visionary, goal-driven, innovative individuals or teams that are oriented to developing a new business and making it a profitable one (Hisrich and Lagan-fox, 2005). Nigerian economy is an emerging one that is characterized by a large influx of entrepreneurs and small and medium enterprises. The emergence of this category of people makes it somewhat important and necessary for researchers to understand and mange them effectively.

Entrepreneurs play an important role in any given economy and are the prime movers of economic development. Entrepreneur is derived from the French verb “entrependre” which means to undertake, to attempt, to try in hand, to contract for, or to adventure (Girad, 1962). Entrepreneurship is the process of wealth creation and individuals referred to as entrepreneurs create this wealth by being innovative. The traditional perspective described entrepreneurship in purely economic terms. For example, Cantillon (1755), describes the entrepreneur as any individual who is self-employed, thereby actively taking the risk of economic uncertainty. The entrepreneur in the context of this paper is the originator or creator of a profit seeking organ of the society or economic organization established for the purpose of providing goods and services for the consumption of the society, in which such organizations located. The entrepreneur is often referred to as the agent of economic, technological and social systems (Ogundele and Olayemi, 2004).

Small businesses are generally regarded as the driving force of economic growth, job creation and poverty reduction in developing countries. They have been the means through which accelerated economic growth and rapid industrialization have been achieved. While the contributions of small businesses to development are generally acknowledged, entrepreneurs face many obstacles that limit their long-term survival and development. Research on small-business development has shown the rate of failure in developing countries is higher than in developed world. (Arinaitwe, 2002). Scholars have been indicated that starting a business is a risky venture and warn that the chances of small-business owners making it past the five-year mark are very slim. Theyshould develop both long-term and short-term strategies to guard against failure (Sauser, 2005; Monk, 2000). In Nigeria, Arowomole, (200) asserted that every successvie government continue to emphasis on entrepreneurship emergence. This is probably to find a better way of nurturing the emergence of entrepreneurship by looking for those determinants that could effectively and positively affect the entrepreneurship emergence as well as the performance.

With reference to above, many past studies have documented the significant impact of entrepreneurial factors such as individual determinants, external factors and firm characteristics on entrepreneurial performance. For instance, Mohd (2005); Blackman (2003); Ogundele (2007); Colin et al., (2005) and Lawal (2005) argued that individual determinant which is also called entrepreneurial characteristics significantly and positively affect both entrepreneurial emergence and entrepreneurial performance. Similarly, Van de ven (1993); Mohd (2005); Arowomole (2000); Kuratko et al., (2004) and (Radiah, Mohd and Ab, 2009) have asserted that external factors predict and significantly affect entrepreneurial performance as well as the emergence of entrepreneurship of any country. With respect of this, Van de van (1993) has further argued that any study within the field of entrepreneurship development without the consideration of external factors which he nicknamed external environment should be considered incomplete and invalid. Accordingly, Johan et al., (2005); Mohd (2005); Lin (2006) and Dean et al., (2000) argued that firm characteristics such as firm size, nature of firm etc affect the performance of the firm. From the above, there is no doubt that past studies have really given attention to the impact of individual determinants, external factors and firm characteristics on firm performance (Rebecca, 2009; William, 2009; Zhang et al., 2008; Okpara et al., 2007; Ogundele, 2007). However, despite this attention extended to these factors, Man, Lau and Chan, (2002) have argued that all these factors reference in this study still deserve further attention in the study of entrepreneurship and small business.

While different factors such as individual determinants, external factors and firm characteristics have been found to influence entrepreneurial performance to different extents, the results are often inconsistent (Man et al., 2002, Yanfeng and Si, 2008, Kisfalvi, 2002; Dean et al., 2000; Pelham, 1999; (Chandler and Hanks, 1994; Cooper, 1993). In order to tackle this problem, past studies have suggested contingency relationships on different conditions and interactions (Fanga, Evans and Zou, 2005; man et al., 2002).

This research attempts to ascertain, empirically, the determinants of entrepreneurial emergence and performance as a tool for sustainable employment, as perceived by indigenous entrepreneurs in Nigeria. The assumptions being tested are that entrepreneurial emergence and performance though affected by several sets of factors if properly tackled can serve as a means or tool for sustainable employment for the Nigerian populace.

1.2 Statement of the Problem

The financial and economic crisis has added to the pre-existing economic, social and political challenges in Nigeria. Thus, there is an urgent challenge to develop policies and strategies to generate decent and productive jobs through the promotion of sustainable micro-, small- and medium-sized enterprises in Nigeria. Recognizing the role of the entrepreneurship for growth, employment creation and poverty reduction, countries in the West African region are encouraged to engage in a process of sound economic reform, particularly tackling the promotion of an enabling business environment and the adequacy of the education system, which the labour market needs.

Nigeria facesmany problems. The challenges faced by entrepreneurs in developing countries are monumental and quite similar.

There is massive unemployment, partly as a result of retrenchment in government and organizations. Due to the economic situation of the country, more “entrepreneurs” are emerging. This is as a result of the unavailability of jobs (i.e. more supply of labor, less demand for it) in the market, and the need or search for survival.

Another challenge is the unstable and highly bureaucratic business environment. The laws governing private enterprise, especially business registration and taxation systems, are believed to be overly and difficult to understand. Contract and private property laws are often poorly designed and/or enforced. As suggested by Kiggundu(2002), Pope (2001), and Stevenson (1998) the unfavorable institutional/regulatory environment is often accompanied by the added expenses of corruption and bribery. Other problems encountered by entrepreneurs in transition economics include poor macroeconomic policies, limited access to short-term and long term financial capital, and a lack of managerial experience. Nigerian entrepreneurs reported that they were frequently harassed by government officials who extorted money from their businesses.

Poor infrastructure including bad roads, water shortage, erratic electric supply, and poor telecommunication system represent additional challenges faced by small business owners (Mambula, 2002).

Difficulty in gaining access to bank credits and other financial institutions proved to be a major obstacle hindering the process of Nigerian entrepreneurship emergence.

The most serious and damaging problem threatening the state of entrepreneurship in Nigeria is a lack of government interest in and support for MSEs (Ariyo, 2005). This poor attitude toward for private sector explains why there explains why there has never been any real attempt on the part of government to develop any programs or lasting policies to support small businesses.

This research project studies the critical importance of sustainable enterprises through entrepreneurship in achieving social development goals, economic diversification, income generation and poverty reduction in Nigeria. It also highlights a number of challenges facing the crucial development of entrepreneurship. Some of the challenges are structural; others are the result of the ongoing financial and economic crisis. A conducive business environment with an efficient legal and regulatory framework is primordial for entrepreneurship as a tool for sustainable job creation.

1.3 Objectives of the Study

The underlying principle of this study is to examine the importance on entrepreneurship as a tool for sustainable employment.

The study is also geared towards achieving the following objectives:

To examine the viability of entrepreneurship as a tool for sustainable employment.
To raise awareness of the importance of entrepreneurship as a tool for sustainable employment.
Consolidate existing knowledge and good practices in entrepreneurship around the world to enable the development of innovative new tools and approaches.
Provide recommendations to governments, academia, the private sector and other actors on the development and delivery of effective entrepreneurship.

1.4 Research Hypotheses

For the successful completion of the study, the following research hypotheses were formulated by the researcher;

H₀: Entrepreneurship is not a tool for sustainable employment.
H₁: Entrepreneurship is a tool for sustainable employment.
H₀²: Environmental and Personal factors do not affect entrepreneurship as a tool for sustainable employment.
H₂: Environmental and Personal factors do affect entrepreneurship as a tool for sustainable employment

1.5 Significance of the Study

The study is expected to make contribution to knowledge in the following areas:

Provide information about entrepreneurship in relation to sustainable employment in the Nigerian economy.
An essential material for scholarly discourse in management science relating to Entrepreneurship.
Assist in providing information on the viability of entrepreneurship as a tool for sustainable employment in the Nigerian economy.
Provide information on the challenges of entrepreneurship in Nigerian.
Provide information for future research works on entrepreneurship/

1.6 Scope and Limitation of the Study

The study focuses on the viability of entrepreneurship as a tool for sustainable employment in the Nigerian economy. It systematically analyses the steps involved in becoming an entrepreneur and creating sustainable employment. The researcher encounters some constrain which limited the scope of the study;

a) Availability of Research Material:

The research material available to the researcher is insufficient, thereby limiting the study

b) Time:

The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.

c) Organizational Privacy:

Limited Access to the selected auditing firm makes it difficult to get all the necessary and required information concerning the activities

1.7 Definition of Terms

Enterpreneurship:

Entrepreneurship is the process of designing, launching and running a new business, which is often initially a small business. The people who create these businesses are called entrepreneurs.

Sustainable:

Able to be maintained at a certain rate or level.

Employment:

Employment is a relationship between two parties, usually based on a contract where work is paid for, where one party, which may be a corporation, for profit, not-for-profit organization, co-operative or other entity is the employer and the other is the employee.

1.8 Organization of the Study

This research work is organized in five chapters, for easy understanding, as follows

Chapter one is concern with the introduction, which consist of the (overview, of the study), historical background, statement of problem, objectives of the study, research hypotheses, significance of the study, scope and limitation of the study, definition of terms and historical background of the study.
Chapter two highlights the theoretical framework on which the study is based, thus the review of related literature.
Chapter three deals on the research design and methodology adopted in the study.
Chapter four concentrate on the data collection and analysis and presentation of finding.
Chapter five gives summary, conclusion, and recommendations made of the study

Chapter Five

Summary, Conclusion and Recommendation

5.1 Introduction

It is important to ascertain that the objective of this study was on the entrepreneurship as a tool for sustainable employment. In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challenges of entrepreneurship as a tool for sustainable employment

5.2 Summary

This study was on entrepreneurship as a tool for sustainable employment. Four objectives were raised which included:To examine the viability of entrepreneurship as a tool for sustainable employment, to raise awareness of the importance of entrepreneurship as a tool for sustainable employment, consolidate existing knowledge and good practices in entrepreneurship around the world to enable the development of innovative new tools and approaches, Provide recommendations to governments, academia, the private sector and other actors on the development and delivery of effective entrepreneurship.In line with these objectives, two research hypotheses were formulated and two null hypotheses were posited. The total population for the study is 200 staff of selected SMEs in Uyo local government of Akwa Ibom state. The researcher used questionnaires as the instrument for the data collection. Descriptive Survey research design was adopted for this study. A total of 133 respondents made up managers,secretaries, content developers and junior staff was used for the study. The data collected were presented in tables and analyzed using simple percentages and frequencies

5.3 Conclusion

Nigeria has a history of economic stagnation that has led to decline in white collar jobs. The inclusion of entrepreneurship course in all disciplines will to a great extent, assist in solving this problems of high unemployment and underemployment. Entrepreneurship education in this paper has been recognized as a key driver in encouraging business start up potentials among graduates (Wilson, Llewellyn and Robertson 2003:9) cited in Mafela (2009:3). Some argue that entrepreneurial capabilities are not inborn and as such entrepreneurship is a behavioural not a personality trait but can be learned. All the same, the attempts at stimulating entrepreneurial activities through formal training and education and therefore assume that they may be enhanced or developed by a guided entrepreneurial education. Others believe that entrepreneurship is inborn, that is, personality trait not behavioural. There are yet others including this author who believe that entrepreneurship is primarily learned by experience and discovery and that entrepreneurial learning should be conceived as a lifelong process, where knowledge is continuously shaped and revised as new experience take place

5.4 Recommendation

All stakeholders must encourage the proposed introduction of Entrepreneurship study across faculties and departments as general courses in the country. The federal government in collaboration with state governments should provide scholarships/bursaries for performing students by way of encouragement.
Universities should start to commercialize their research findings instead of leaving them in the shelves.
The National Universities Commission (NUC) should as usual set the minimum benchmark of the courses in Nigerian universities. This development should not be politicized, rather, the entire policy frameworks needed for its sustainability and improvement should be provided so as to salvage Nigeria from the clutches of poverty

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