The consistent rise in unemployment and the poverty level in Nigeria has led to the crucial need for the creation of new jobs through entrepreneurship. The uprise in the entrepreneurship activity has been due to necessity.
Although entrepreneurship hasn’t been easy either with several limitations from unfavourable policies, high taxes and many other hindrances. Many believe that Nigeria’s economic decline since the 1980s has created a hostile environment that has made unfavourable entrepreneurial success in Nigeria. However, despite the huge number of challenges business owners face, the need for entrepreneurship can’t be overemphasized in fostering economic growth in Nigeria.
Only a few entrepreneurs have been able to withstand the harsh reality of doing business in Nigeria because they see a reasonable return to their investment. The common factors include but are not limited to bad electricity, lack of security and most times lack funding for further expansion to accommodate higher demands. Despite these shortcomings, entrepreneurship has proven to be the heart of the country’s economy.
What is Entrepreneurship?
Entrepreneurship is the act of creating a business or businesses while building and scaling it to generate a profit. It is simply the process of owning a business that provides a service or a product in exchange for money. However, it is more likely to be defined as the act of creating value and thinking of new ways of proffering a solution to a problem for a potential customer.
Though there are certain setbacks to being an entrepreneur in Nigeria, entrepreneurship is striving and is evident with the rise of small businesses every day. In fact, it’s fostering a part of the country’s economic growth. Apart from the fact that entrepreneurs generate jobs for others; they also produce goods and services for the society, introduce new technologies and improve or lower cost outputs, and earn foreign exchange through export expansion or the substitution of imports. These are impacting on the economy positively.
How Entrepreneurship is Fostering Economic Growth in Nigeria
A common question about entrepreneurship is how it fuels economic growth. Asides from the fact that entrepreneurship is escapism for average Nigerians to build wealth, and as a route to upward mobility. Its impact can be felt like a fountain of innovation and economic growth.
Creating Job Opportunities
Unemployment no doubt has a negative impact on the economy, especially when the labour market reaches a point where it doesn’t generate enough productivity to cover its cost. Entrepreneurship involves building new businesses, and new businesses need new employees. Not only does it involve job creation, but it also helps to foster a community with a better standard of living. These economic opportunities will improve the quality of life for the people, as the country’s economy will become better when the level of unemployment rate is low.
Global Expansion and Integration
When business owners run their businesses, it is easy for them to run an integrated market and expand globally which is a plus for the country’s economy. Especially if the business involves export of goods and services to nearby regions, these small-medium enterprises can contribute directly to the country’s productivity and earnings. The increase in revenue strengthens the economy and promotes overall welfare of the people. This integration leads by engaging in regional and international trade promotes investment in the home country, and plays a significant role in fostering economic growth in a country. With the role that startups and small-medium enterprises play, their contribution aids productivity and prompts the ability of economic advancement.
Technology Advancement
Entrepreneurship relies on innovation for growth. Innovation is defined as the process of translating an idea or invention into a good or service that creates value. Innovation involves deliberate application of information, imagination and initiative in deriving greater or different values from resources, and includes all processes by which new ideas are generated and converted into useful products. Transforming innovation into a product and service requires new technologies, which prompts technological advancement that is needed as the basis for a country’s economic growth. Creating innovative solutions requires a creative environment, and for such creative solutions to thrive, technology plays a part, and the latter is usually accompanied by strong economic growth.
Advantage Approach Socio-Economic Challenges
Entrepreneurship has its own share of setbacks. Lack of good infrastructural facilities is one of the major problems affecting the development of entrepreneurship in Nigeria. Without power for an extended period of time, commerce grinds to a halt. So, the need to approach socio-economic challenges becomes relevant. For instance, power outage is one of the infrastructural problems small business owners face. Amongst the possible solutions to tackle this issue involves taking advantage of the sunlight to provide a better source of power supply. That is entrepreneurship’s way of playing its part in approaching socio-economic challenges, thereby raising the standard of living and encouraging growth in a country’s economy.
Many businesses may seem to have overcome major challenges associated with entrepreneurship, although some challenges are hard to bypass, especially government policies which directly affect the running of a business. Sustainable entrepreneurship is, however, the key required to unlock the economic growth of the country. There is a demanding need for all activities that border on SME development to be properly coordinated, monitored and measured for impact on the global level, which opens the economy to competition and growth.