ABSTRACT
This study is basically concerned with the analysis of the Development of entrepreneurship in Enugu State: Problems and Prospects. The attempts made by various personalities and institutions towards explaining the concept was given proper attention. Moving ahead, the researcher in his efforts aimed to carrying out a proper research made use of various methods/instruments of data sourcing and analysis, that comprised of primary and secondary sources of data which included face to face discussions, oral interviews, questionnaires and the use of relevant textbooks, journals, magazines, libraries, internet, e.t.c. The research was conducted with a known total population of two thousand, eight hundred persons, and a determined sample size of three hundred and fifty relevant persons. Equally, some research questions were put forward to direct investigation in conducting the research, while tables together with percentages were employed to provide comprehensive data presentation and analysis. The findings from the study revealed among other things, that the activities of entrepreneurs have a tremendous role of play in revamping the economy of the state.
CHAPTER ONE INTRODUCTION
1.1 BACKGROUND OF THE STUDY
The word entrepreneur drives from the French, Literally meaning “between-taker” or “go-between”. The earliest use of the term reflected this sense of the “Middleman” who directed resources provided by others. In the middle Ages, an entrepreneur was someone who managed large projects on behalf of a landowner or the church, such as the building of a castle or a cathedral. In the 17th century the concept was extended to include some element of risk and profit. Entrepreneurs were those who contracted with the state to perform certain duties, such as the collection of revenues or the operation of banking and trading services. As the price was fixed, the entrepreneur could profit or lose from their performance of the contract.
Richard Cantillon introduced the word into economic literature in 1734 when he described three types of agents in the economy: the “landowner” who as the proprietor of land provided the primary resource, “entrepreneurs”, including farmers and merchants who organized resources and accepted risk by buying
at a certain price and selling at an uncertain price and “hirelings” who rented their services. J. B. Say, a French economist writing in the early 1800’s, distinguished between the profits of those who provided capital and the profits of entrepreneurs who used it. He defined an entrepreneur as “someone who consciously moves economic resources from an area of lower and into an area of higher productivity and greater yield. In other words, the entrepreneur takes existing resources, such as people, materials, buildings, money and redeploys them in such a way as to make them more productive and give them greater value.
This definition implies changing what already exists, it sees the entrepreneur as an instrument of change, someone who does not seek to perfect, or optimize existing ways of doing things, but searches instead for new methods, and new markets or different ways of doing things. In the mid-20th century, Joseph Schumpeter took up this theme of the entrepreneur as a necessary destabilizing force. According to Schumpeter, economic equilibrium, which optimizes what already exists, does not create healthy economies. A dynamic economy takes as its norm the
disequilibrium brought about by the constant change and innovation of entrepreneurship, Schumpeter (1934:24).
In the 1980s, Peter Drucker developed these earlier ideas, seeing the emergence of an entrepreneurial economy in the USA as a “most significant and hopeful event”. He defined an entrepreneur as someone who “always searches for change responds to it, and exploits it as an opportunity” Drucker (1986:18). He thus made innovation a necessary part of entrepreneurship. In doing so, he focused on the management processes involved in what an entrepreneur does. Others have taken up this theme of entrepreneurship as a process, an action- oriented management style which takes innovation and change as the focus of thinking and behaviour. A recent definition by Hisrich summaries this approach:
Entrepreneurship is the process of creating something different with value by devoting the necessary time and effort, assuming the accompanying financial, psychic, and social risks, and receiving the resultant rewards of monetary and personal satisfaction, Hisrich & Peters (1995: 10).
The process of starting a new venture is embodied in the entrepreneurial process, which involves more than just problem solving in a typical management position. An entrepreneur must find, evaluate and develop and opportunity by overcoming the forces that resist the creation of something new. The process has four distinct phases.
1. Identifying and Evaluating the Opportunity
Opportunity identification and evaluation is quite a difficult. Most good business opportunities do not suddenly appear, but rather result from an entrepreneur’s alertness to possibilities or, in some cases, the establishment of mechanisms that identify potential opportunities.
Although most entrepreneurs do not have formal mechanisms for identifying business opportunities, some sources are often fruitful: consumers and business associates, members of the distribution system and technical people. Often consumers, such as business associates purchasing products to fit a certain lifestyle, are the best source of ideas for a new venture. Also,
technical oriented individuals often conceptualize business opportunities when working on other projects.
Whether the opportunity is identified by using input from consumers, business associates, channel members or technical people, each opportunity must be carefully screened and evaluated. This evaluation of the opportunity is perhaps the most critical element of the entrepreneurial process, as it allows the entrepreneur to assess whether the specific product or service has the returns needed for the resources required, Hornaday (1990: 4).
It is important for the entrepreneur to understand the cause of the opportunity. Is it technological change, market shift, government regulation or competition? These factors and the resulting opportunity have a different market size and time dimension.
The market size and the length of the window opportunity form the primary basis for determining risks and rewards. The risks reflect the market, competition, technology, and amount of capital involved. The amount of capital forms the basis for the return and rewards. The methodology for evaluating risks and rewards frequently indicates that an opportunity offers neither a
financial nor a personal reward commensurate with the risks involved. The return and reward of the opportunity need to be viewed in light of any possible subsequent opportunities as well.
Finally, the opportunity must fit the personal skills and goals of the entrepreneur. It is particularly important that the entrepreneur be able to put forth the necessary time and effort required to make the venture succeed. Although many entrepreneurs feel that the desire can be developed along with the venture, typically it does not materialize, therefore dooming the venture to failure. An entrepreneur must believe in the opportunity so much that he or she will make the necessary sacrifices to develop and manage the organization.
Opportunity analysis, or what is frequently called an opportunity assessment plan, is not a business plan. Compared to a business plan, it should be shorter, focus on the opportunity, not the entire venture; and provide the basis for making the decision of whether or not to act on the opportunity.
An opportunity analysis plan includes the following: a description of the product or service, an assessment of the opportunity, an assessment of the entrepreneur and the team,
specifications of all the activities and resources needed to translate the opportunity into a viable business venture, and the source of capital to finance the initial venture as well as its growth –first and second stage financing.
The most difficult and critical aspect of opportunity analysis is the assessment of the opportunity. This requires answering the following questions:
o What market need does it fill?
o What personal observations have you experienced or recorded with regard to that market need?
o What social condition underlies this market need?
o What market research data can be marshaled to describe this market need?
o What patents might be available to fulfill this need?
o What competition exists in this market? How would you describe the behaviour of this competition?
o What does the international market look like?
o What does the international competition look like?
o Where is the money to be made in this activity?
Brockhaus & Horwitz (1986: 22).
2. Developing and Business Plan
A good business plan must be developed in order to exploit the defined opportunity. This is perhaps the most difficult phase of the entrepreneurial process. And entrepreneur usually has not prepared a business plan before and does not have the resources available to do a good job. A good business plan is not only important in developing the opportunity but also essential in determining the resources required, obtaining those resources, and successfully managing the resulting venture.
3. Determining the Resources Required
The resources needed for the opportunity must also be determined. This process starts with an appraisal of the entrepreneur’s present resources. Any resources that are critical must then be distinguished form those that are just helpful. Care must be taken not to under-estimated the amount and variety of resources needed. The down -side risks associated with insufficient or inappropriate resources should also be assessed, Storey (1982: 36).
Acquiring the needed resources in a timely manner while giving up as little control as possible is the next step in the entrepreneurial process. An entrepreneur should strive to maintain as large an ownership position as possible, particularly in the start-up stage. As the business develops, more funds will probably be needed to finance the growth of the venture, requiring more ownership to be relinquished.
Every entrepreneur should give up an ownership position in the venture only after every other alternative has been explored. Alternative suppliers of these resources, along with their needs and desires, must be identified. By understanding resource supplier needs, the entrepreneur can structure a deal that enables the resources to be acquired at the lowest possible cost and the least cost control.
4. Managing the Enterprise
After resources are acquired, the entrepreneur must employ them through the implementation of the business plan. The operational problems of the growing enterprise must also be examined. This involves implementing a management style and
structure, as well as determining the key variables for success. A control system must be identified so that any problem areas can be carefully monitored. Some entrepreneurs have difficulty managing and growing the venture they created. This is one difference between entrepreneurial and managerial decision making.
1.2 STATEMENT OF PROBLEM
Entrepreneurship is commonly linked directly to small business management. Although this presents several problems, the Nigerian economy appears to have been reaping the advantages obtainable form small business enterprises. These include stimulation of indigenous entrepreneurship, transformation of traditional industries, etc. the experience in many parts of the world point to the direction that entrepreneurship development and small business enterprises can make positive impact on the economies of many nations both developed and developing.
This is where the problem of this study lies. It constitutes an inquiry into ascertaining what constitutes the obstacles to entrepreneurship development, as well as the prospects associated with it, using Enugu State as a case study.
1.3 OBJECTIVES OF THE STUDYH
The objectives which this study seeks to achieve include:
i. To provide an analysis of entrepreneurship development with emphasis on its historical development, processes, characteristics, philosophy, e.t.c.
ii. To discover what makes up the hindrances to entrepreneurship development in Enugu State.
iii. To ascertain what constitutes the prospects of entrepreneurship development in Enugu State.
1.4 RESEARCH QUESTIONS
To direct investigation, the following research questions were put forward.
i. How can the concept of entrepreneurship development be analyzed?
ii. What are the factors that constitute obstacles to entrepreneurship development in Enugu State?
iii. What constitutes the prospects of entrepreneurship development in Enugu State?
1.5 SIGNIFICANCE OF THE STUDY
Entrepreneurs are frequently presented as heroic individuals. Asked to picture an entrepreneur and we tend to think of an individual who master the odds stacked against them, single- handedly overcoming traditional barriers until, by sheer force of personality, they manage to change what exists and offer the customer the something different that they really wanted all along. The enterprise culture promoted by the Thatcherite government in the United Kingdom certainly encouraged this portrayal. Economic policy was developed on the premise that individuals needed only the right environment to become entrepreneurs, and that the economy could be led by heroic individuals whose entrepreneurial talent would lead the way to a new era of growth in British industry. The likes of Richard Branson and Lord Hanson were seen as examples in this direction.
This is why a study such as this targeted at unveiling the various factors and characteristics that are contained in the development of entrepreneurship more especially as it relates to one of the South Eastern State of Nigeria should be seen as very significant and timely.
1.6 SCOPE OF THE STUDY
The scope of the study encompasses the analysis concerning the concept of entrepreneurship development, its rise, nature and dimensions, characteristics, problems and prospects e.t.c., with special emphasis on the chosen state of case study, which in this case is Enugu State.
1.7 LIMITATION OF THE STUDY
The limitations of the study exists in such areas as the time period involved for the execution/implementation of the research, difficulties encountered in obtaining most of the necessary data/information needed for the study, as well as transportation and some other logistic problems.
This material content is developed to serve as a GUIDE for students to conduct academic research
DEVELOPMENT OF ENTREPRENEURSHIP IN ENUGU STATE PROBLEMS AND PROSPECTS
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