Full Project – ENTREPRENEURIAL DEVELOPMENT AND EMPLOYMENT CREATION IN OYO STATE OF NIGERIA (1987 – 2012)
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ABSTRACT
Unemployment has been a major issue in the Nigerian economy since the mid-1980s. Consequently, the Federal government adopted several strategies and policies towards entrepreneurial development in Nigeria to combat the unemployment problem. All over the world, entrepreneurship has been adjudged to have the capacity to generate employment. Indeed, extant literature discloses that entrepreneurship has been linked with the creation of self-employment. This notwithstanding, literature reveal that only limited studies have been conducted on entrepreneurship in developing economies, especially Nigeria, hence the need for further research. Hence, this study investigated entrepreneurial development and employment creation in Oyo State, Nigeria. The study sought specifically to assess the capacity of small and medium scale enterprises (SMEs) to generate employment in Oyo State.
The study adopted a survey research design. The population of the study was all the 4,000 registered SMEs in Oyo State, provided by the National Association of Small and Medium Scale Enterprises. Stratified random sampling technique was utilised to select sixteen out of thirty-three local government areas in Oyo State as well as the sample size of 400 SMEs. The choice of the study area was based on size and concentration of SMEs. The research instrument was a self-developed and validated questionnaire. The reliability test of the major variables in the questionnaire yielded the following Cronbach’s alpha coefficients: Self Employment=0.86, Business Partnership=0.68, Business Inheritance=0.74, Government Employment Training Programme=0.67 and Entrepreneurship Development=0.93. A total of 455 copies of the questionnaire were administered with a response rate of 87.9%. Data were analysed using descriptive and inferential (multiple regression) statistics.
Findings revealed that there was a significant relationship between self-employment and acquisition of vocational skills (R2 =0.763; p=0.000). There was also a significant relationship between business partnership formation and acquisition of managerial skills (R2=0.754; p=0.001).Similarly, there was a significant relationship between family business formation and acquisition of technical skills through inheriting enterprises (R2=0.713; p=0.002). Moreover, there was a significant relationship between government employment training programme and self-employment (R2=0.693; p=0.000). In addition, among the SMEs in Oyo State, bakery (125) business center (76), petty trading (63) and barbing (61) generated more employment opportunities than others.
The study concluded that vocational skills and government training created employment opportunities through the SMEs in Oyo State, Nigeria. Also, formation of business organizations enhanced the acquisition of managerial and technical skills. The study recommended that government and SMEs should focus on the establishment of enterprises that generate employment most. In addition, government should provide adequate training for entrepreneurs while entrepreneurs in turn should provide adequate and continuous training for employees to enhance their technical skills.
Keywords: Vocational skills, Business partnership formation, Technical skills, Business inheritance, Managerial skills
TABLE OF CONTENTS
Title Page
Abstract
Table of Contents
List of Tables
List of Figures
Abbreviations
Appendices
CHAPTER ONE: INTRODUCTION
1.1 Background to the Study
1.2 Statement of the Problem
1.3 Objective of the Study
1.4 Research Questions
1.5 Hypotheses
1.5.1 Rationales for the Hypotheses
1.6 Significance of the Study
1.7 Justification for the Study
1.8 Scope of the Study
1.9 Operationalization of Variables
1.10 Operational Definitions of Terms
CHAPTER TWO: REVIEW OF LITERATURE
2.0 Introduction
2.1 Entrepreneurial Development
2.1.1 Characteristics of Entrepreneurial Development
2.1.2 Origin of Entrepreneurial Development
2.1.3 Measurement of Entrepreneurial Development
2.1.4 Importance of Entrepreneurial Development
2.2 Self – Employment
2.3 Vocational Skills
2.4. Government Employment Training Programme
2.5 Business Organization Formation
2.5.1. Types of Business Partnerships
2.5.2 Formation of Business Partnership
2.5.3. Dissolution of Business Partnership
2.5.4. Origin of Business Partnership
2.5.5. Importance of Partnership
2.6 Conceptual Review of Family Business Inheritance
2.6.1 Processes Leading to Family Business Inheritance
2.6.2 Training for Successors
2.6.3 Advantages of Family Business Inheritance
2.6.4 Disadvantages of Family Business Inheritance
2.7 Theoretical Review
2.7.1 Theories of Entrepreneurial Development
2.8 Theories of Self-Employment
2.8.1 Economic Theories
2.8.2 Occupational Theory
2.8.3 The Portfolio Choice Theory
2.8.4 The theory of Utility Maximization
2.8.5 The Theory of Jack of – All – Trades
2.8.6 The “Push” School Theory
2.8.7 The “Pull” School Theory
2.8.8 Sociological – Psychological Theories of Self – Employment
2.8.9 Disadvantage Theory
2.8.10 Cultural Theory
2.8.11 Middleman Minority Theory
2.8.12 Maslow Theory
2.8.13 Job Satisfaction Theory
2.9 Theories of Vocational Skills
2.9.1 Theory of Work Adjustment (TWA)
2.9.2 Self-concept Theory of Career Development
2.9.3 Social Cognitive Career Theory
2.10. Theories of Government Employment Training Programmes
2.10.1 The Systems Theory
2.11. Theories of Business Partnership
2.12. Theories of Family Business Inheritance
2.13. Empirical Review
2.13.1 Self – employment
2.14. Vocational Skills
2.15.1. Small and Medium Scale Enterprises (SMES) in Nigeria
2.15.2. Small and Medium Scale Enterprises (SMES) in Oyo State
2.16 Government Employment Training Programmes
2.17 Business Partnership
2.18. Family Business Inheritance
2.19. Gaps in Literature
2.20. Summary of Relevant Empirical Review
CHAPTER THREE: METHODOLOGY
3.1 Research Design
3.2 Population
3.3 Sample size and sampling Technique
3.4 Method of Data Collection
3.5 Research Instrument
3.6 Pilot Study for the Research Instrument
3.6.1 Validity of the Research Instrument
3.6.2 Reliability of the Research Instrument
3.7 Method of Data Analysis
3.8 Conceptual Model
3.9 A Prior Expectation
3.10 Limitations of Methodologies
CHAPTER FOUR: DATA ANALYSIS, RESULTS AND DISCUSSION ON FINDINGS
4.0 Introduction
4.1 Descriptive Analysis
CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.1 Summary
5.2 Conclusion
5.3 Recommendations
5.3.1 Implications of Management
5.3.2 Implications of Findings for Policy Decision Makers
5.3.3 Implications of Findings for Entrepreneurship Development in Nigeria
5.4 Contribution to Knowledge
5.5 Suggestion for Further Studies
References
Appendices
CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
The need for employment creation in Nigeria did not arise until the mid-1980s, when the economy of Nigeria collapsed and youth and graduate unemployment became a major issue of the economy of the country, particularly the latter (Arogundade, 2011). Prior to this period, the focus was in occupying positions created by the colonial masters for the smooth running of their colonial administration as well as filling the positions that the colonial masters were vacating which was occasioned by the political independence gained by the country. In this way, both graduates and non-graduates were occupying vacancies so created (Aladekomo 2004; Alarape, 2008).
However, by the mid – 1980s unemployment had reared its devastating effect on the Nigerian economy. This was occasioned by various factors such as economic recession, production of jobless educational institutions’ graduates, low labour absorbing capacity by companies, mass lay off of civil servants, embargo on employment in the civil service, unemployability of our educational institutions’ graduates for lack of relevant skills, irrelevance of curricula offered in educational institutions, closure and relocation of some business enterprises and infrastructural deficits (Idowu, 1987; Aladekomo, 2004; Adebisi & Oni, 2008; Olufemi & Adebola, 2008; Oviawe, 2010; Idogho & Aniabor, 2011; Joseph, 2011; Shadare & Tunde, 2012).
The general household survey conducted by the National Bureau of Statistics (NBS) in 2011 put the unemployment rate in Nigeria as 23.9 percent. This is a very worrisome development to all stakeholders: the society, the unemployed and the government. Particularly worrisome is the rising rate of graduate unemployment among the unemployed labour force in the country over the years (Akintoye, 2008). For instance, the graduate unemployment rate rose from about 1 percent in 1974 to 4 percent in 1984; and between 1992 and 1997, it rose to 32 percent (Akintoye, 2008). In 2008, Yoloye reported that graduate unemployment rate had risen to 71.4 percent (Egunsola, Dazala & Daniel, 2012).
Equally worrisome is also the alarming rate of unemployment among non-graduates. Oye, Ibrahim and Ahmad (2011) putthe largest proportions (31-50%) of the unemployed in the country as being secondary school graduates with 40% of them representing urban youth ranging between 20 and 24 years. Another 31% of them fall within the age rangeof15 – 19 years.
The resultant effect of this high rate of unemployment in Nigeria is youth restiveness of all kinds such as blowing off of crude oil pipes, kidnapping (Onwubiko, 2011) as well as these youth organizing themselves into militant groups in the form of Egbesu Boys, Oodua People’s Congress, Bakassi Boys, Almajiris, “area boys” and Boko Haram to target the very society that alienated them (Awogbenle & Iwuamadi, 2010; Liolio, 2013).
In view of the above, the Federal government adopted several strategies and policies towards entrepreneurial development in Nigeria by establishing institutions and agencies, which provide variety of support services to entrepreneurs. The implication of these policies is the emergence of entrepreneurial development programmes (EDP) in different parts of Nigeria with the aim of combating unemployment problem in the country (Aladekomo, 2004; Alarape, 2008; Arogundade, 2011; Ekpoh & Edet, 2011).
Entrepreneurial development in itself is conceived as a programme of activities to enhance the knowledge, skills, behaviour and attitudes of individuals and groups to assume the role of entrepreneurs. Entrepreneurial development programmes, therefore, are targeted at owner managers of small business firms as well as those identified to possess potentials for self – employment (Owualah, 1999). The aim is to allow individuals and groups to acquire these skills, knowledge and attitudes to enable them take the role of entrepreneurs thereby creating jobs for themselves, since creation of employment also requires the establishment of new ventures (Aladekomo, 2004; Alarape, 2008; Ekpoh & Edet, 2011).
Some of the entrepreneurial development programmes aimed at combating unemployment problem in the country are run by various government agencies which include national economic empowerment and development strategy (NEEDS), small and medium scale development agency (SMEDAN), student industrial work experience scheme (SIWES), national directorate of employment (NDE) which provides vocational training for participants to acquire vocational skills in different trades, among other things;, youth enterprises with innovation in Nigeria (YouWin) and subsidy reinvestment and empowerment programme (SURE-P).
In order to inculcate entrepreneurial behaviour in the minds of students while in school and by extension, reduce the rate of unemployment further in the economy, the federal government of Nigeria through National UniversityCommission (NUC) directed the introduction of entrepreneurship education in tertiary education institutions during the 2007/2008 academic session(Nzelibe, Yusuf, Ozigbo, Mohammed& Ayuba, 2010).
Entrepreneurship is adjudged as being capable of generating employment, among other things, as it is considered to be labour intensive and therefore capable of providing employment for our teeming youths and graduates (Aladekomo, 2004; Ahmad, Baharun &Rahman, 2004; Onugu, 2009; Deakins and Feel, 2009; Oviawe 2010; Idogho & Ainabor, 2011; Arogundale, 2011; Akhunemomkhan, Raimi & Sofoluwe 2013; Aziz, Friedman& Boprieva, 2013; Ohachosin, Onwuchewa & Ifeanyi, 2013). However, in spite of the various numbers of these programmes established in different parts of the country, the rate of unemployment keeps on increasing unabated.
The importance of entrepreneurship cannot be overemphasized. Deakins and Feel (2009) making reference to the statement credited to Jean – Philippe Cotis, the Chief Economist of Organization for Economic Conglomeration and Development (OECD), confirms the importance of entrepreneurship among policy makers and academic researchers by saying that it has scientifically been proved that entrepreneurship activities create employment, productivity and ultimately economic growth.
Furthermore, OECD entrepreneurship and small and medium enterprises (SMEs) outlooks asserts that SMEs and entrepreneurship are more recognized worldwide to be the very source of dynamism, innovative and flexibility in advanced industrialized countries as well as emerging and developing economies. Accordingly, they are seen as being responsible for most of job creation in OECD countries and make important contributions to innovation, productivity and economic growth. Indeed, Akinlua and Akintunde (2008) furtherbuttress this statement by asserting that these small scale businesses employ more workers than their large scale counterparts.
Before this time, however, and inspite of the importance of entrepreneurship, its development has been neglected for a long time in Nigeria (Aladekomo, 2004). Aladekomo(2004) pointed out that the industrial policy which came on board only after the Nigerian independence in 1960 initially concentrated on the establishment of big industries with utter neglect for small scale businesses and by so doing, entrepreneurship which is the bedrock of small scale businesses was unwittingly de – emphasized.
Corroborating this view, Olaniyan (2005) says that Nigerian government in the past formulated policies focused on the large scale enterprises that are deemed to be the hall mark of development in the private sector and this encouraged the establishment of public enterprises to the detriment of private enterprises. He goes further to say that small – scale businesses most of which operate in the informal sector, were viewed by government as only incidental to development. Yet, as observed by Akinlua and Akintunde (2008), it is these small scale businesses that employ more workers than their large scale counterparts.
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