Entrepreneurship and National Development in the State
The concept of Entrepreneurship
Entrepreneurship is more than simply “starting a business”. It is a process through which an individual identify opportunities, allocate resources, and create value. This creation of value is often through the identification of unmet needs or through the identification of opportunities for change. It is the act of being an entrepreneur which is seen as “one who undertakes innovation with finance and business acumen in an effort of transform innovation in to economic goods hence Entrepreneurs see “problems” as “opportunities”, and then take action to identify the solution to those problems and the customers who will pay to have the problems solved. Entrepreneurial success is simply and functions of the ability of an Entrepreneur to see opportunities in the marketplace, initiate change (or take advantage of change) and creates attitude of a person or group of persons to undertake ventures with the probability of success or failures. It demands that the individuals should be prepaid to assume a reasonable degree of risks, be a good leader in addition to being highly innovative.
In business management, entrepreneurship is regard as the “prime mover” of a success enterprise just as a leader in any organization must be the environmental change agents. Entrepreneurship is ‘an unrehearsed combination instigated by the uncertain prospect of temporary monopoly profit’.
Entrepreneur is defined as the instigator of entrepreneurial events for as long as they occur.
Entrepreneurship development has also led to employment generation, growth of the economy and sustainable development. The current number of Colleges and Universities offering small business management and entrepreneurship development programs has grown from one University in 1947-over 1600 in the 1990s.
Historically, the study of Entrepreneurship reaches back to the work of Richard Cantillon and Adam Smith in the late 17th and early 18th centuries, but was largely ignored theoretically until the late 19th and early 20thcenturies and empirically until a profound resurgence in business and economics in the last 40 years. In the 20th century, the understanding of the entrepreneurship owes much to the work of economist – Joseph Schumpeter in the 1930s and other Austrian economist such as Carl Menger, Ludwig Von Mises and Friedech Von Hayek.
Types of Entrepreneurship
However, there are two (2) types of entrepreneurship, these are;
a) Opportunity – Based Entrepreneurship: This occurs when an entrepreneur perceives a business opportunity and chooses to pursue it. Ernest and Young, 2009 in a survey found that majority of entrepreneurs said they saw economic slowdown as the perfect time to pursue new market opportunities. In addition, economist, academics and industry leaders agree that recession tends to favor the naturally innovative temperament of entrepreneurs.
b) Necessity – Based Entrepreneurship: This occur when an entrepreneur is left with no other viable option to earn a living. It is borne not as a choice compulsion which makes him/her choose entrepreneurship as a career. An example is the Nigerian Civil War of 1957-1970 when the economic embargo introduced by Federal Government forced the secessionist Biafra to develop fuel pump from coconut and palm oil.
In order to understand the roles played by entrepreneurs in developing an economy, it is first important to understand the concept of entrepreneurship. Petrin, 1992 while choosing a definition for entrepreneurship most appropriates to the rural area context, it is important to bear in mind the skills that will be needed to improve the quality of life for individuals, and to sustain a healthy economy and environment.
Taking this into consideration, one can find that each of the traditional definitions has its own weakness. Hence, the most appropriate definition is a combination of three wherein, entrepreneurship can be defined as a force that mobilizes other resources to meet unmet demand; that ability to create and build something from practically nothing; the process of creating value by pulling together unique packages of resources to exploits an opportunity.
There has been a wealth of knowledge of the determinant of entrepreneurship over the last few decades. Although studies bringing forth this knowledge have rather been based on theoretical grounds, others have been drawn from empirical evidence. Scholars have also been keen in investigating the impact of entrepreneurship in relation to economic growth which has further led to explosion of extensive literature in this field.
It is important to note that a significant amount of existing literature has been based on the observation of firms, establishments and regions in terms of their economic performance, growth and survival. The facts that can be derived from this studies links economic growth with the size and age of the firms or an establishment. Newly established firms and very small firms experience systematically faster growth compared to the already established larger firms. These findings have been found to hold in the modern industrialized economics as well as across time period.
The connection between entrepreneurship and economic growth measured in terms of performance of the firms has been extended even beyond observing the establishment to accommodate geographic regions. This paper discourses how entrepreneurship can be related directly economic growth and how entrepreneurship at the heart of economic growth of any nation.
The Concept of Development
The concept of development has many definitions. Rodney, 1969 defines ‘development’ as “many sided process”. At the level of the individuals it implies increase in skills and capacity, greater freedom, creativity, self – discipline, responsibility and materials well-being. From this definition we find out that development goes beyond economic indicators.
Development can also be defined as “a multi-dimensional process involving the re-organization and re-orientation of the entire economic and social system. This involves, in addition improvement of income and out-put, radical changes in institutional, social and administrative structures as well as in popular attitudes, customs and belief”. The main contention of Todaro is that development is both a physical process and a state of mind. The transformation of institution is one aspect. The other aspect is that the thinking of the people must change.
Seers argue that development should answer such questions as: “what has been happening to Poverty” what has been happening to in equality? If all three of these have declined from high levels, then beyond doubt this has been a period of development for the country concerned. If one or two of this central problems have been growing worse, especially if all three have it would be strange to call the result development, even if per income doubled.
Seer’ definition is important for understanding of development because it is centers on the improvement in the living condition of the individuals. By correctly observed by Todaro, there were, high rate s of growth per capital income during the 18960s and 1970s but which simultaneously showed little or no improvement or witnessed an actual decline in employment, equality and real income of the bottom 40% of their populations. By the earlier growth definition, these countries were developing. By the more recent poverty, equality and employment criteria, however, they were not.
Based on the forgoing we could conclude by agreeing with Todaro that the objectives of development are concerned with the following things.
a) Life Sustainance: we are concerned with basic human needs without which life would be impossible. These things include food, shelter, health and protection. When these things are not available in the society we may conclude that there is no development and vice-versa.
b) Self-Esteem: It is the wish of every society to be respected. To this end, most societies purse those things that would give them necessary respect. These things include wealth and technological development. Most of the highly developed nations of the world like Japan and the USA have these essential features.
c) Freedom: freedom means Emancipation form alienating, material conditions of Life and freedom from the social servitude of men and nature, ignorance, or misery institution and dogmatic beliefs. When a society is free from superstitious beliefs it would have more choices available to it.
Determinants of Entrepreneurship
The need to understand the determinant of entrepreneurship is as important as understanding its concept. The origins and determinant of entrepreneurship span a wide spectrum of theories and explanations. However, it is generally acceptable that policy measure can influence the level of entrepreneurship.
Research analyzing the determinant of the decision to start a new business and has so far stress the role of individual characteristics, access to capital institutions. Social factors may also play a role in the decision to become an entrepreneur because, as shown by a growing literature, social interactions affect the payoffs from a variety of economic decision. A widely accepted view is the following: while personal characteristics as well as social aspects clearly play some role, entrepreneurship and entrepreneurs can also be developed through conscious actions. Development of entrepreneur and entrepreneurship can be stimulated through a set of supporting institution and through deliberate innovative action which stimulate changes and fully support capable individuals or groups. Therefore, policies and programs designed specifically for entrepreneurship promotion can greatly affect the supply of entrepreneurs and thus represent an important source of entrepreneurship.
This view has important implications for entrepreneurship development in rural areas. If currently entrepreneurial activities in a given rural area are not thriving it does not mean that entrepreneurship is something inherently alien to rural areas. While this feeling could have some legacy due to the slower pace of changes occurring in rural areas compared to urban ones, proper action can make a lot of difference with respect to entrepreneurial behavior of people living in rural areas.
