Impact of entrepreneurship development on creating employment A a study of selected business Enterprise in Lagos State
Background Of The Study
SMEs are important drivers of innovation and competition. The SME sector has remained very innovative and adaptable in order to survive the recent economic downturn and recession. Empirical studies show that new firms play a significant role in employment generation (e.g. Garikai 2011, Baptista et al, 2005; Stel & Suddle, 2005), innovation (e.g. Fritsch & Mueller, 2005), economic growth and reduction of unemployment (Garikai, 2011).
There is a high correlation between the degree of poverty hunger, unemployment, economic well being /standard of living of the citizens of countries and the degree of vibrancy of the respective country’s SMEs. In most economies, SMEs occupy the greatest proportion of enterprises. The SMEs constitute over 90% of total enterprises in most of the economies and are credited with generating the highest rates of employment growth and account for a major share of industrial production and exports. For the past decades, small business enterprises in Nigeria were characterized as essentially backward and cog in the wheel of the overall development of the Nigeria economy. As a result of this, there has been a prevalent feeling that such businesses could be assisted only for social reasons, not as a promising opportunity for national development. Obviously, too little attention has been paid to the benefits to be derived from helping small enterprises of modernize and grow. This attitude arose partly amongst both the citizens and government and mainly from the very nature of the small business which made it difficult for its impact to be felt in the economy.
The latent contributions which small business can make are now attracting recognition. This awareness is manifest in the ever- increasing number of Nigerians who daily strive to put up their personal ideas and abilities to effective use [by starting small business] ventures. Evidence around the world indicate that small scale enterprise provide an effective means of stimulating indigenous entrepreneurship, enhancing greater employment opportunities per unit of capital invested and aiding the development of technology. Through their wide dispersal, they provide an effective means of mitigating rural-urban migration and resource utilization. Furthermore, by producing intermediate products for use I n large scale enterprises, small businesses contribute to the strengthening of industrial linkages.
Accordingly, due to the recognition of the roles of small business, the Nigerian government has since 1970 initiated programmes for the assistance of small businesses, especially, in the areas of finance, extension and advisory services including, training and provision of infrastructures. All these are designed to enhance the development of small businesses. Successive governments in Nigeria have for the past three decades shown great interest in the financing of small businesses by establishing specialized banks and other credit agencies/schemes to provide customized funding.
In spite of all the contributions and the attention given to it by the government, the small business enterprise is still confronted with problems peculiar to what many may refer to as the ‘Nigerian factor’.
One of such problems is the lack of funds, “It takes money to do business”. From the time a business idea is conceived of [the promotional state] until after it has ceased to operate, there are financial implications in every activity at every point in time associated with the businesses.