Chapter One: Discovering Areas of Entrepreneurship PDF

# Chapter One: Discovering Areas of Entrepreneurship ## 1.0 Introduction Entrepreneurship is a multi-disciplinary field that benefited significantly from economics and social psychology. Each of these disciplines offers insights into the decisions and processes leading to the pursuit of an entrep...

# Chapter One: Discovering Areas of Entrepreneurship ## 1.0 Introduction Entrepreneurship is a multi-disciplinary field that benefited significantly from economics and social psychology. Each of these disciplines offers insights into the decisions and processes leading to the pursuit of an entrepreneurial endeavor. Entrepreneurship is a dynamic process of vision, change and creation. It requires an application of energy and passion towards the creation and implementation of new ideas and creative solutions (Mainama and Aruwa, 2008). The act of entrepreneurship essential ingredients include the willingness to take calculated risks in terms of time, equity, or career; the ability to formulate an effective venture team; the creative skill to marshal needed resources and fundamental skill of building solid business plans and finally the vision to recognize opportunity where others see chaos, contradiction and confusion. Entrepreneurship is a multi-disciplinary field that benefited significantly from economics and social psychology. Each of these disciplines offers insights into the decisions and processes leading to the pursuit of an entrepreneurial endeavor. Entrepreneurship is a dynamic process of vision, change, and creation. It requires an application of energy and passion towards the creation and implementation of new ideas and creative solutions (Mainama and Aruwa, 2008). Entrepreneurship can be defined as self-employment of any sort. Entrepreneurs buy at certain prices in the present and sell at uncertain prices in the future. Also of note is that the entrepreneur is a bearer of uncertainty. According to Say (1816), the entrepreneur is the agent "who unites all means of production and who finds the value of the products, the re-establishment of the entire capital he employs and the value of the wages, the interest and rent which he pays, as well as profits belonging to himself. It shows invariably that entrepreneurs attempt to predict and act upon change within markets (Knight, 1988). On his part, he emphasizes the entrepreneur's role in bearing the uncertainty of market dynamics and to perform such fundamental managerial functions as direction and control of the entrepreneur. Another author, (Schumpeter, 1934) defines the entrepreneur as an innovator who implements change within markets through the carrying out of new combinations that are fundamental. They are as follows: (i) The introduction of a new good or quality products (ii) The introduction of a new method of production (iii) The opening of a new market (iv) The conquest of a new source of supply of new materials or parts (v) The carrying out of the new organization of any industry. At the center of the entrepreneurship center of Miami University of Ohio, it was stated that entrepreneurship is the process of identifying, developing and bringing a vision to life. The vision may be an innovative idea, an opportunity, or simply a better way to do something. Entrepreneurship is considered as the process of emergency, behavior, and performance of entrepreneur (Ogundele, 2004). The formal processes of equipping the entrepreneur with necessary insight and skill are through formal education, entrepreneurial training and development. Extant literature concedes entrepreneurship as the driving force that propels economic growth and development and also creates job opportunities. Entrepreneurial activities are described as catalysts that speed up economic growth and development of an economy (Antoncic and Hisrich, 2004; Kuratko, 2009). Similarly, entrepreneurial behaviors or activities are important to individuals as well as organizations for wealth creation and expansion. For many developing countries, entrepreneurship has been a powerful engine of economic growth and wealth creation, and is crucial for improving the quality, number, and variety of employment opportunities for the poor (Oteh, 2009). Therefore, the benefits of entrepreneurship in a developing country like Nigeria cannot be overemphasized. The diversification of economy is an area that is of interest. Entrepreneurs create new enterprises, new commercial activities and new economic sectors. They generate jobs for others; they produce goods and services for society; they introduce new technologies and improve or lower cost outputs and/or they earn foreign exchange through export expansion or the substitution of imports' (Oteh, 2009). ## 2.0 Youth Role in Entrepreneurship People below the age of 40 are regarded as young entrepreneurs who created a business in which they have the majority share holding and take active interest in decision-making, risk-taking, and day-to-day management. Researchers observed that the typical age of setting up and running a business is over 30 and in many cases over 40 years. As a way out of unemployment among some groups of young people it is being suggested that entrepreneurship might provide an outlet for the talents of many highly educated young people such as university graduates. The choices of different entrepreneurs are usually influenced by a lot of factors. This can be realized by tactically using different strategy of investigating the process of continuously seeking and implementing expert opinions before committing funds to develop the venture (Odia, 2017). For any aspiring business a good business plan is essential. According to (Odia, 2017), business plan must contain a detailed description of the business venture, marketing, research and development, production critical risk factors, financing, evaluation, result and all other factors necessary for the effective and efficacious management of every stage of the business. A young entrepreneur should understand that a business is a legitimate economic institution and not a criminal enterprise as misconstrue by many people. In order to get out of unemployment saga in the country more job opportunity needed to be created. Nigeria, as the most populous country in Africa, needs about 45 million Small and Medium Enterprises to effectively boost the labour market and the national economy. ## 2.1 Youth Entrepreneur Perception Entrepreneurship and vocational programmes provide a variety of opportunities for youth. Without doubt, if these programmes are well organized, they can work to positively benefit youth. The programmes provide an environment for youth to interact with caring adults in actual work settings. It is focuses on the present employment needs in young people's lives, as well as long-term career and life goals. In all, youth entrepreneurship programmes can also encourage career exploration, decrease overall youth unemployment and improve self-confidence. Also of note is the role of small firm in Bolton (London) had the report that 820,000 firms were small scale firms. They employ 4.4 million workers and contribute more than 20% in industrial output. Entrepreneurship can be influenced in three ways: * Through self-perception as a potential entrepreneur; * Educational preparation; and * Socialization. Self-perception as potential entrepreneurs is a process where entrepreneurship is encouraged among youth through positive perceptions of entrepreneurship. Educational preparation especially early entrepreneurship education is desirable especially at the pre-college ages in order to achieve impacts on potential entrepreneurs. The scheme provides business management oriented curricula and "heads-on" experience which is needed at initial stage. The skill can be achieved through (i) Entrepreneurship education (ii) Enterprise development (iii) Experimental programs. On Socialization, theories on career supported and highlighted entrepreneurial career options may not be usually realistically considered. ## 2.2 Challenges of Youth Entrepreneurship Identified constraint against youth entrepreneurship are organization skill, access to finance, enabling law and regulation, marketing strategies, access to business support and technology. Apart from availability of finance, there may be a lack of organizational skills of bringing together those resources that may be needed to run an organization. As a starter of an entrepreneur, you may suffer discrimination from finance providers. Other areas where finance assistance is lacking include raising external finance and accessing finance for business growth. The issue of start-up finance and raising of collateral to secure a start-up loan and financial constraints in business development varies between different sector of the economy. Complying with laws and regulations governing the running of SME administratively especially at inception poses difficulty to young entrepreneurs. This is next in importance after finance. Ability to market new products requires special skill and knowledge in business and management skills which are often lacking in new businesses. Therefore, management training is of importance. Application of current computer-oriented business is minimal with the young SME in Nigeria and other developing economy. It appears that IT and technology related knowledge will benefit SMEs, whether this output, will be translated to real performance is another issue altogether. Poor management skill is a problem facing small firms, there are potential advantages of integrating basic business and management training into comprehensive packages to support upcoming entrepreneurs in the country. ## 3.0 Innovation in Entrepreneurship Innovation involves deliberate application of information, imagination, and initiative in deriving greater values from resources and it includes all processes by which new ideas are generated and converted into useful products. (Osagie, 2013). It should be noted that the process starts from the generation of business idea, through implementation to the realization of output and profit. Innovation is dynamic, and creates new things out of existing ones. Innovativeness has been noted as the only consistent theme in literature on entrepreneurship. It is central in an entrepreneurial strategy. (Schumpeter, 1949) was credited to be amongst the first to emphasize the role of innovation in the entrepreneurial process when considering youth entrepreneurship there is need to emphasize that innovation is an important means of pursuing opportunities, and so it is an important component of an entrepreneurial orientation (Lumpkin and Dess, 1996). Drucker (2007) introduced the concept of knowledge-based innovation as the "super star" of entrepreneurship. Such innovations could be scientific, technical, or social in nature. Knowledge-based innovation requires careful analysis of all the necessary factors and clear focus on the strategic position which entails developing systems, market focus, and occupying the strategic position for effective business performance. The focus of entrepreneurship is to create job opportunity. This is the reason why the Act is being introduced early in institutions. The expanding trend of globalization has created a competitive business environment, which has affected the way entrepreneurs create and sustain their business operations and strategy. The Asian Tigers shape their entrepreneurial education, training and development which is their only sure path to national economic development. Nigeria can take advantage of this trend through the collaborative and interactive efforts of the educational institutions, the government, business organizations and their relevant social institutions. (Omale and Chima, 2016). | Program Name | Focus | Duration | | ------------ | ------ | -------- | | Youths Entrepreneurship Support (YES) Programme | Focus on young aspiring entrepreneurs within the age bracket of 18-35 years that have viable business ideas by developing a product program | On-going | _Source: Adapted from Omale, S.A. and Chima, K.O. 2016_ Table 1 showed series of programmes introduced in the country to enhance the economic development. Lacks of continuity have stalled the good intention of the scheme. There is need for an appraisal of the programs in order to promote youth empowerment. The change in the institutions curriculum to reflect the new development and address the challenging trend within the society was embraced in early 2000s. Entrepreneurship studies were introduced into the Nigerian educational system especially higher institutions as a mandatory course. The _Centre for Entrepreneurship Development (CED)_, which has the objective of teaching and gingering students of higher institutions especially in science, engineering, and technology (SET) which is also to acquire entrepreneurial, innovative, and management skills was established. The essence is to make the graduates self-employed, create job opportunities for others and generate wealth. Innovation also facilitated technological breakthrough that are useful for economic development; the first industrial revolution and all subsequent industrial development was made possible by technological innovations. This gives rise to mass production of goods to meet the yeaning demand. In the early 19th century, it was the steam engine and power looms in the United Kingdom that led to drastic changes in the economy, whereas today it is information and communications Technology (ICT) such as the internet and robotics. ## 4.0 Industrial Sub Sector A new industrial revolution is being envisaged as authors such as Peter Marsh and Chris Anderson have argued that the world is at the start of a "new industrial revolution" wherein the interaction of the internet, social media, and new production technologies such as 3-D printing is making scale economics less important for production. In the Netherlands, architects are printing a designer house using a 3-D printer that can manufacture 6 by 9 metre panels. (Naude and Nagler, 2016). It was further observed that the new industrial revolution will make human skills even more important in manufacturing as noted by Janoo, 2016. It then means that appropriate human skills, including entrepreneurial skills, manufacturing opportunities will expand to the best of their ability. The driving force behind any successful industrial revolution is functional industrial policy that is inclusive. The last time industrial policy had its heyday development was viewed as a singular pathway that transforms poor countries into rich nations through the power of emulation. It is a belief that GDP growth was the magic elixir that would bring the masses out of poverty and deliver development and property to all. This is the method employed by the government to stimulate development and achieve an "Industrialized" economic structure The policy on industrialization can be divided into two. The functional one where government's active intervention in the economy is to achieve their objectives, and value judgement which assumed that the main purpose of industrial policy was to promote growth through more productive activities that will meet the need and desire of the people. The typical case studies that can form the bases of our action is Brazil using industrial policy to promote broad-based poverty reduction. India using the same scheme to ensure a more stable domestic food supply while China encourages the expansion of green industries. Janoo, 2016 emphasized that industrial policy has the potential to help countries regain some of their rapid deteriorating economic sovereignty and pioneer alternative development trajectories that are appropriate for their context and objectives in line with international practices. Promoting made in Nigeria good is a slogan that must be encouraged. It will serve as a catalyst to boost different type of entrepreneurship. The priority areas of industrial investment which are favored in the administration of government industrial incentives are those that are focused on diversifying the economy. There are industries which can either immediately or in a few years' time source their raw materials locally, for example on the agro and agro-allied sub sectors for which there are abundant natural resources in Nigeria, including food preparations for example fruit drinks, cereal milling, feed mills, and vegetable oil processing (Nigerian Investment Promotion Commission, 2012). Youths have a lot of opportunities in industries that support food production programmes through local manufacture of chemicals, equipment and light commercial vehicles in particular, and chemical as well as petrochemical-based manufacturing industries. Also of note is the multiplier effect of this sector such as flat sheet mills and machine tools industry including foundries and engineering industries for spare parts production. Foreign experts can train young Nigerians in basic industries and petrochemical and liquified natural gas projects in which the government welcomes foreign partners. This can be linked to privatization and privatization policy of public enterprises aimed at economic reforms which took effect from 1998. The public enterprises Promotion and Commercialization Act, authorizes the partial privatization of government enterprises in areas of telecommunications, electricity (generation and distribution), petroleum refining, coal, and bitumen production (mining processing and export); tourism generation (tour and travels and hospitality). Industrial revolution in this sector will increase Nigeria employment potentials. It is also possible to process local agricultural produce and minerals into industrial raw materials as manufactured intermediate goods required by existing industries in Nigeria especially the small and medium entrepreneurs. Adequate investment in research institutes particularly in the area of adaptive research and commercialization of local invention into the main stream of various segment of industries is very important. Taking advantage of nine priority sub-systems that can stimulate the laying of a favorable industrial base, provide a catalyst to industrialization, and expand entrepreneur in Nigeria and assist in job creation. These areas of focus are foundry and forges; metal fabrication; pharmaceutical; food processing; leather and leather products; textiles and wearing apparels; non-metallic building materials -bricks, ceramics, and glass. ## 4.1 Communication Technology Entrepreneurs The technological revolution that have taken place in telecommunication industry is witnessed in all strata of the society. The liberalization of Nigeria's mobile telecoms since 2001 has improved dramatically with the sum of $32bn direct investments made by the nations for leading mobile operators. This has helped turn the 184 million person's country into the largest mobile telecoms market in Africa leading to over 150 million active subscribers in July 2016. This data is from the Nigerian Communications Commission (NCC), the Federal Telecoms regulator. There are avenues for job creation and sustainability in this sector which can be either public or private in its development. The responsibility of the Federal Ministry of Communications is to oversee five parastatal with these potentials: The Nigerian Communications Commission (NCC); Nigerian Communications Satellite (NIGCOMSAT); Galaxy Backbone, The Nigerian Postal Service (NIPOST) and the National Information Technology Development Agency. It should be noted that NCC is mandated with licensing GSM operators and ensuring that enabling environment is created for business to thrive. There are plans to create more technology hubs and centres where young tech-savvy entrepreneurs and small and medium-sized enterprises can develop their concepts (OBG, 2016). The grass root participation is very crucial in encouraging Nigerians to develop more local contents which can be rewarding. This is government and the private sectors' key priorities, noting that internet should be an integral part of our everyday lives. A no profit ICT incubation centre in Lagos was launched in 2011 to support a number of Nigerian entrepreneurs that developed job in Nigeria. It comprises a jobs-listing website and mobile platform that was downloaded more than 100,000 times in its initial stage. This phenomenon can be long lasting for youths in Nigeria. ## 5.0 Agriculture Sub Sector Agriculture and industrial investment can be integrated into entrepreneurship to boost economic development. Increased agricultural productivity is a vital pre-requisite for rapid economic growth and development (Evbuomwan, 2014). Sustainability in agricultural development could be defined as the ability of the agricultural system to maintain a well-defined level of performance over time, and if required to enhance that output without damaging the essential ecological integrity of the system (CBN, 2003). There are roles to be played by the agricultural sector in a growing economy which include: (i) Providing adequate food for an increasing population; (ii) Supplying raw materials to the industrial sector; (iii) Constituting the major source of employment; (iv) Earning foreign exchange through commodity export; and (v) Providing market for the products of the industrial sector. Traditionally agriculture has been described in Nigeria as the mainstay of the economy. The main policy thrust of agriculture which is sufficiency in food production and surplus for use as industrial raw material for export encourages venture into entrepreneurship. The area of concern are (i) All aspects of direct agricultural production, but in particular, rehabilitation of groundnut, cotton, cocoa and oil palm production, fish production, and forestry; (ii) Investment in processing of agricultural produce and storage facilities (iii) Investment in processing of agricultural input supply and distribution; (iv) Agricultural mechanization e.g. adoption and use of farm equipment (such as bulldozers, tractors, etc.) including the provision of land clearing and land preparation services; (v) Agricultural support activities including research and funding of research activities (Nigerian Investment Promotion Commission, 2012). Funding consists of the financial resources required to transform the ideas of an entrepreneur into a viable project. It can take the form of loans, equity capital, venture capital, working capital or any other form (Raji, 2000). Other agricultural policy that is already planned that can aid entrepreneurship are (vi) Water resources development, especially for irrigation and flood control infrastructures along river basins; (vii) Development of earth dams and construction of wash bores and tube wells; (viii) Development and fabrication of appropriate small-scale and mechanized technologies for both on-farm processing (e.g. threshing) and secondary processing of agricultural produce for consumption or storage (Nigerian Investment Promotion Commission, 2012). In the realization of the agricultural intervention, there are specific objectives that were formulated according to (Omale and Chima, 2016). They are: (i) Ensuring self-sufficiency in basic food items, particularly commodities which consume considerable shares of Nigeria's foreign exchange e.g. Rice importation. (ii) Increased production of agricultural raw materials to meet the growing needs of an expanding industrial sector; (iii) Increased export earnings, enhanced by further processing of agricultural produce and adding value; (iv) Modernization of agricultural production, processing, storage and distribution, through the infusion of improved technology and management so that the sector can be more responsive to demands of a developing economy. (v) Creation of more rural employment opportunities by engaging in further improvement and maintenance of rural infrastructural facilities; (vi) Improvement in the quality of life of rural dwellers through the provision of social amenities such as portable water and improved health and educational facilities and (vii) Continuous protection of agricultural land resources from drought, desert encroachment, soil erosion, and flood. There are many diverse area of agriculture. The sub-sectors include crop, livestock, fishery and forestry. According to National Bureau of Statistics (NBS) in 2016 crop sub-sector is the largest which accounted for 89.5 percent of agricultural sector contribution to the (GDP) Gross Domestic Product. Staple food crops which are classified into these categories are maize, millet, sorghum, rice, wheat, acha, cowpea, cassava, potatoes, yam, cocoyam, plantain and vegetables. The other crops are: melon, peanut, sesame, soyabeans, cotton, oil palm, cocoa, rubber, sugarcane, kolanut, ginger, cashew, pineapple, and palm produce. Data from CBN 2013 and 2014 Annual Reports indicated that cassava is the highest contributor to staples output with 57,189.10 thousand tonnes, followed by yam which contributed 40,151.86 thousand tones. Other significant contributors are peanut, sugarcane, soyabean, cotton, rubber, oil palm, and cocoa. ## 6.0 The Role of Small and Medium-Sized Enterprises The significance of small and medium-sized enterprises (SMEs) in the market economies is universal. SMEs are important to Nigeria, they are made up of about 90 percent of firms in the Nigerian Industrial sector on numerical basis. Only 1% contributed to GDP in contrast to countries like Indonesia, Thailand, and India, where about 40% was contributed to GDP. It should be noted that the stimulation of national industrial development can be achieved only by supporting the development of SMEs. It is through attractive financing programme that the sector can be sustained. SMEs are made up of medium scale (MSE), small scale (SSE), and Micro Enterprises (ME). According to Federal Ministry of Industries, a medium scale enterprise with a company operating assets of less than N200 million and employing less than 300 persons. On the other hand, a small scale enterprise has total assets less than N50 million, with less than 100 employees. To revive the economy and up lift the standard of living of Nigerians, Nigerian government adopted the development of SMEs are known to encourage sustainable economy, people-centered development, small and medium scale enterprises (SME), which help in alleviating poverty, creating wealth and employment, and stemming rural-urban drift. The agency mandated to coordinate and support the development of SME sector in Nigeria in small and Medium Enterprise Development Agency of Nigeria (SMEDAN) with their size and scope of operations, these enterprises require relatively small capital investment to start, thereby offering a relatively high labor-to-capita ratio. In its operation, it requires low technology and managerial skills, which are readily available within the immediate environment. The objectives set up by government for promoting SME are: Enhancement of regional economic balance through industrial dispersal, including rural areas; Moderation of rural-urban migration; Promotion of effective domestic resource utilization; Facilitation of managerial training of unskilled and semi-skilled labour; and Production of intermediate goods for use in large enterprises. ## 7.0 Recommendations Young people should be informed of possibilities of self employment and necessary support services. They should take advantage of various financial instruments available to start business. There was notable government intervention in 2014 where the sum of 222 billion naira loan was approved to states' government by President GoodLuck Jonathan for economic growth of micro (SMEs) Small and Medium Scale industry at single digit not more than 9%. From reliable source, women are expected to be favoured. This is an avenue for young entrepreneurs to take advantage of. Ensuring that youth are involved in formal and informal networks. e.g. website support for exchange experiences Raising level of awareness in mainstream support organization and noting problems facing youth entrepreneurs e.g. exchanges and international mass seminar. Continuous awareness programme from local to national level have to be intensified as it relates to target groups, and support programme among entrepreneurs. Governments on his part have to coordinate the programme to achieve its main objectives. As much as possible specialization in targeted areas have to be encouraged especially with local businesses in mind. Also, equal opportunities have to be made available for target groups and support from general organization that are interested. International best practices that will promote exchange of ideas and experiences among workers and organization need to be supported by private sector and government. Research findings in a way have to be used to improve performance generally. Existing and current farm settlement should be of international standard and industrialization system should be set up to form a synergy between agricultural and industrial sectors. There is need to explore areas of man's general purpose which cut across residential, commercial, industrial, public/institutional, recreational, agricultural, and other purposes to create job opportunities for teeming youths. Research discoveries in various sectors can be taken advantage of to initiate and foster new ground for development. ## 8.0 Conclusion Entrepreneurship offers many opportunities for upcoming young ones. Avenues should be created in such a way that potentials that are embedded in entrepreneurship can be taken advantage of whenever there is need to set up such organization. It has been discovered that business can flourish easily in this sector without much challenges. Government should encourage individual, groups, and organization wishing to set up this type of business and create an enabling environment inspite of constraint that are visible within the business environment. Basic infrastructural facilities that will facilitate business in developing countries should be provided immediately to encourage participation in this sector of the economy.