The Practice Of Entrepreneurship In Nigeria (A Case Study Of Innoson Group Of Companies)
The ability to generate income by the inhabitant of the rural area is dependent on the entrepreneurial abilities and skills possessed by these people with no formal paid employment. Entrepreneurs are the life wire of economic development all over the world and play important role for employment, income and societal changes, particularly in transition economies like Nigeria. This research is concerned with the nature and the extent to which entrepreneurship in Nigeria has been developed so far, and outlines the initiative by government and also the main current and future challenges and perspectives for the development of entrepreneurship. The research is of the opinion that entrepreneurship miracle in other country is an engine for job creation; innovation and diversity and Nigeria’s entrepreneurs have a long way to go before they can effectively drive changes in the economy.
1.1 Background of the Study
The industrialization of any nation is dependent on the activities of the entrepreneur. This is because a nation may be endow with natural resources, but without an entrepreneur to think innovatively to harness these resources it will still remain on its natural state as a piece of furniture. Good Entrepreneur can create a strong economy. They are an important facet of industrial growth and development of a nation. According to Harper (2003) entrepreneurship is the main mechanism that creates wealth, explanations of economic growth and development often ignore (or fail to acknowledge explicitly) the entrepreneurial forces of change and adaptation that underlie economic performance. Surprisingly, the role of entrepreneurship in economic development has attracted less professional interest than the role of other factors, such as the accumulation of physical capital, expansion of the labour force, R&D, technological progress and education. Entrepreneurship is something we ignore at our peril. Entrepreneurship is pertinent to the analysis of how new ideas or ‘recipes’ for reconfiguring objects in the material and social world can be harnessed to enhance a nation’s wealth. In the longer term, a country’s economic progress depends on its ability to increase the value of what it produces with its resource base (people, land and capital). The point cannot be emphasized too strongly, however, that neither the ends to which these resources are put nor the means for achieving these ends (i.e. the set of resources and how they are used) are given or fixed. They are the result of entrepreneurial choices and are open to entrepreneurial initiative. Individual entrepreneurs and entrepreneurial teams bring to light the resources, technologies and trading opportunities that make economic development possible. Indeed, whenever entrepreneurs are the first to discover the availability and potential economic value of new resources, they are in effect bringing those resources into existence in economic terms (Kirzner 1989).
Nigeria as a country has numerous business and investment potentials due to the abundant, vibrant and dynamic human and natural resources it possesses. The performance and effectiveness of entrepreneurs in the country as an instrument of economic growth and development has long been under scrutiny. This intense scrutiny has been against the backdrop of the low performance and inefficiency that characterized small business particularly in assessing its role on economic growth and development. Tapping the country’s resources require the ability to identify potentially useful and economically viable fields of endeavours. Nigerians have equally made their marks in diverse fields such as science, technology, academics, business and entertainment. Entrepreneurship activities and innovative ingenuity in Nigeria have developed enterprises in areas such as agriculture/agro-allied, solid minerals, transportation, information and telecom, hospitality and tourism business, building and construction etc. According to Anyadike, Emeh and Ukah (2012) these human and natural resources notwithstanding, Nigeria is still one of the poorest countries in the world and has one of the highest rates of youth unemployment in sub-Sahara Africa, and despite its alleged strong economic growth. In respect of the above sad and deplorable situation, the government has done little to reduce the misery and frustrations of the citizenry. This has foisted a state of hopelessness on majority of young and old people who have resorted to any means including crime to succeed in life. They resort to vices because they are not gainfully engaged. In other words, they are unemployed; unemployed, not because they lack the qualification but because the system has been crippled politically, economically, socio-culturally and even religiously Anyadike, Emeh and Ukah (2012). The need for entrepreneurship development in the country today is necessitated by the fact that entrepreneurship development is a major factor in economic growth and development and also the permanent cure for extreme hunger and poverty necessitated by unemployment. It is in this respect this paper seeks to highlight the major challenges and prospects of entrepreneurship in the country and thus proposing some plausible strategies that can promote effective entrepreneurship that will help develop the economy.
1.2 Statement of the Problem
Entrepreneurial practice in Nigeria has witness many ups and down over the years as many indigenous company has sprang up over the years, the numbers of small and medium scale enterprises has been on the increase, and yet the unemployment rate in the country has witness a geometric increase rate while employment rate cannot be said to also progressed geometrically as statistics shows that over 60% of the population who are willing and able to work are not employed and 20% of the once employed are said to be underemployed. It is on this backdrop that the researcher intends to investigate the impact of entrepreneurial practice in Nigeria.
1.3 Objective of the Study
It is pertinent to say that the objective of the study is to look into the practice of entrepreneurship in Nigeria. But for the successful completion of the study, the researcher put forward the following sub-objectives:
- To ascertain the impact of practice of entrepreneurship in Nigeria.
- To ascertain the role of entrepreneurial practice in job creation
- To ascertain the relationship between entrepreneurship and economic development
- To evaluate the importance of entrepreneurship in the economy.
1.4 Research Hypotheses
For the successful completion of the study, the following hypotheses were formulated:
- H0: entrepreneurship practice has no significant impact in Nigeria economic growth.
H1: entrepreneurship practice has a significant impact in Nigeria economic growth.
- H02: entrepreneurial practice does don play any significant role in job creation in Nigeria.
H2: entrepreneurial practice does play a significant role in job creation in Nigeria.
1.5 Significance of the Study
It is believed that at the completion of the study, the findings will be of great importance to entrepreneurs and intending entrepreneur, as the study will educate them on the vital role that entrepreneurs plays in the economic growth and development. The study will also be of great importance to the government as the findings will serve as a guide to the government to create an enabling environment which will allow the entrepreneur to prevail. The study will also be of great importance to researcher who wants to embark on research on similar topic as the findings will serve as a reference point to them. Finally the study will be of great importance to the academia and the general public as the study will add to the pool of knowledge.
1.6 Scope and Limitation of the Study
The scope of the study covers the practice of entrepreneurship in Nigeria with emphasis on Innoson group of companies. However in the course of the study, the researcher encounters some constrain which limited the scope of the study. Some of these limitations are:
a) Availability of Research Material:
The research material available to the researcher is insufficient, thereby limiting the study
The time frame allocated to the study does not enhance wider coverage as the researcher have 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
Entrepreneurship has traditionally been defined as the process of designing, launching and running a new business, which typically begins as a small business, such as a startup company, offering a product, process or service for sale or hire, and the people who do so are called ‘entrepreneurs’. It has been defined 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.” While definitions of entrepreneurship typically focus on the launching and running of businesses, due to the high risks involved in launching a start-up, a significant proportion of businesses have to close, due to a “.lack of funding, bad business decisions, an economic crisis — or a combination of all of these” or due to lack of market demand. In the 2000s, the definition of “entrepreneurship” has been expanded to explain how and why some individuals (or teams) identify opportunities, evaluate them as viable, and then decide to exploit them, whereas others do not, and, in turn, how entrepreneurs use these opportunities to develop new products or services, launch new firms or even new industries and create wealth. Recent advances stress the fundamentally uncertain nature of the entrepreneurial process, because although opportunities exist their existence cannot be discovered or identified prior to their actualization into profits.
An entrepreneur has been defined as “a person who starts, organizes and manages any enterprise, especially a business, usually with considerable initiative and risk”. “Rather than working as an employee, an entrepreneur runs a small business and assumes all the risk and reward of a given business venture, idea, or good or service offered for sale. The entrepreneur is commonly seen as a business leader and innovator of new ideas and business processes.”Entrepreneurs tend to be good at perceiving new business opportunities and they often exhibit positive biases in their perception (i.e., a bias towards finding new possibilities and seeing unmet market needs) and a pro-risk-taking attitude that makes them more likely to exploit the opportunity
Economic growth is the increase in the inflation-adjusted market value of the goods and services produced by an economy over time. It is conventionally measured as the percent rate of increase in real gross domestic product, or real GDP, usually in per capita terms.
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), statement of problem, objectives of the study, research question, significance or the study, research methodology, definition of terms and historical background of the study.
- Chapter two highlight the theoretical framework on which the study its 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.
1.9 Brief History of Innoson Group of Company
We are an indigenous privately owned Nigerian group of companies committed to driving the Nigerian economy forward through industrialization. Through the leadership of our visionary founder, Dr. Innocent Chukwuma [OFR] our reputation as one of the leading proponents of made-in-Nigeria brands started from a humble beginning 38 years ago!
What merely began as motorcycle spare parts retailing/trading has over the years grown into one of Nigeria’s biggest industrial success story. Dissatisfied with the ever increasing cost of imported foreign-used tokunbo motorcycles as well as the brand new ones, our founder took a major leap of faith that permanently altered the history and course of the Innoson Group
Summary Conclusion and Recommendation
It is important to ascertain that the objective of this study was to investigate the practice of entrepreneurship in Nigeria. A case study of Innoson group of company
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 practice of entrepreneurship in Nigeria.
In summary, this research has been able to reveal the various issues that cluster and affect the development entrepreneurship in Nigeria. Attempts have also been made on the challenges of sustaining and creating conducive environment for Entrepreneurs to grow and prosper. So far, explicated evidence and arguments that highlight that Nigeria’s Entrepreneurs have a long way to go before they can effectively drive changes in the economy. The entrepreneurship miracle in other country is an engine for job creation; innovation and diversity. The role of entrepreneurship in global business of developing countries like India is also significant. The wide range of significant contributions that entrepreneurship makes include promotion of capital formation, creation of immediate large-scale employment, promotion of balanced regional development, and effective mobilization of capital and skills. Nigerians are probably one of the most entrepreneurial people on earth. But this is not enough. For the entrepreneurs to be fully developed in the country, they need to significantly create wealth and employment opportunities thereby reducing poverty
Efforts made by various governments in Nigeria over the years to develop entrepreneurship have not yielded the desired results. One major reason is the treatment of all small businesses as entrepreneurial firms and implementation of policies and programs across the board. The second set of problems relate to economic, social and political factors that create hostile environment inimical to the development of entrepreneurial firms and other small businesses. To address these challenges and facilitate the development of entrepreneurship in Nigeria, it is pertinent that the government should provide enabling environment to these entrepreneur and some relief should be given unto new business inform of tax relief and financial facilities.
Haven successful completed the study, the following recommendations were made. Entrepreneurial firms should be separated from other non entrepreneurial small businesses, to allow for distinct policies and programmes required by each category of small businesses. To achieve this categorization, all small businesses should be encouraged to submit their business plans to a development agency such as the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN). From the business plans, potential and nascent entrepreneurs are identified and separately registered. The Agency should develop a strategy for monitoring, on yearly basis, firms that are classified as entrepreneurial for at least a period of three years. Firms that fail to realize projections in their business plans should be declassified. Entrepreneurial firms should be given higher level of support including outright government grants and soft loans for research and development and easy access to venture capitalists and business angels. The development of other small businesses will continue to be pursued to promote self employment, reduce crime rate and improve the people’s living condition. To this end, the implementation of the Microfinance Policy should be reviewed for greater impact on the generality of the rural populace.
Finally, government should strive to reduce the cost of doing business in Nigeria, to the benefit of both entrepreneurial firms and other small businesses, by providing conducive environment. To achieve this objective, infrastructural facilities, including good road network, stable power and water supply should be provided as a matter of priority. Security should be beefed up in both urban and rural communities and the problem of corruption should be realistically addressed.
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