ABSTRACT

 

Developing nations have been characterised with low standard of living, undeveloped industrial base, high rate of unemployment and low HDI (Human development Index- life expectancy, education and income). With these problems, foreign direct investment have been a great source of economic rescue; however, if these countries could develop their entrepreneurial capacity, they would do more for themselves. (Global Entrepreneurship Monitor –GEM 2011) On this note, this thesis investigated the barriers which affect entrepreneurial development in developing nation. Nigerian priting Small and Medium-size Enterprises (SMEs) were used as case study. The main goals of thesis were to provide practical information on these barriers as well as to propose possible solutions to the problems.

 

In order to achieve the above goals, qualitative research method was used. Interview was also used as research instrument. Twenty SMEs owners were interviewed. Findings shown that harsh government policy and bad leadership, poor educational system, poor infrastructures (electricity), financial incapacitation, near absent research and development (R&D), inadequate technical skill and aid misinformation, low entrepreneurial, administrative and bookkeeping skills, ineffective functional paper mill and high import tax duty were the industrial barriers facing Nigerian printing SMEs. The findings also revealed that individual´s interest, personality, training, skills and working experience are essential in the entrepreneurial evolvement in the Nigerian printing SMEs. The findings further revealed that the Nigerian government, Chartered Institute of Professional Printers of Nigeria (CIPPON), various printing/printers associations and individual printing SME owners are the key players in the entrepreneurial developmental activities for the Nigerian printing SMEs.

 

Furthermore, it was suggested that the aforementioned problems could be solved by sincere leadership and governance in Nigeria through implementing positive policy made, provision of business enabling infrastructures, revitalization of the paper mill, creation of special government agencies for the printing SMEs, education reform, skills development and training, collaboration with foreign investors to produce printing materials locally as well as tax reduction on the importation of printing equipment.

 

Therefore, this thesis contributes to the improvement of the entrepreneurial activities in the Nigerian printing SMEs. More importantly, it provides details of how the gathered knowledge could be applied in the real world.

 

1          INTRODUCTION

 

1.1     Background

 

Although foreign direct investment contributes to the economic development of developing nations, entrepreneurial development and operations have been identified across the globe as viable mechanism and means of efficient economic progression. This argument has however been supported by the Global Entrepreneurship Monitor (GEM) analysis of its 54 members’ economies alongside many scholarly literatures. Hence, considering the economic situation of developing nations with their characteristics -low standard of living, undeveloped industrial base, high rate of unemployment, low Human Development Index (HDI) and economic instability- it is quite empirical that self-development especially in terms of entrepreneurial development of Small and Medium Enterprises (SMEs), would be a viable and alternative rescue for such nations (GEM 2011).

 

An example and evidence of this is a report of the European Commission Responsible for Enterprise and Industry which states that SMEs are the engine of its economy representing 99% of all the available enterprises and employing 75 million people within the EU; thus, increasing the viability of the economy and the living standard of its people. More so, Ogbo and Agu (2012) add that the roles of SMEs in national development cannot be underestimated because they occupy an important position in every nation. Due to the imperative roles of the SMEs in the economy, they are globally often described as “the engine of growth” and “catalysts for socio-economic transformation of any country”, hence I call them the power house for national growth and socio-economic development.

 

Therefore, the claims of scholars, such as Bruyant and Julien (2001), Hindle and Yenchen (2004), and Hisrich et al (2005) seem to be right by stating that entrepreneurship is an important source of wealth for any countries. This is also supported by Adejumo and Olaoye (2012) who explain that the roles of SMEs in the national industrialization are eminent; they state further that small firms contribute significantly to the Gross Domestic Product (GDP). The authors add that the various government arms in Nigeria have made efforts to develop several policies and programs towards improving SMEs’ activities in the country.

 

Unfortunately, developing nations and their industrial sectors encounter many barriers like inadequate resources and infrastructural amenities, political influences (instability and interferences) and poor readiness of entrepreneurs among others which make the achievement of their SMEs insignificant and insufficient to foster desirable economic and national development (Adejumo and Olaoye, 2012). Similarly, Agboli and Ukaegbu (2006) state that in the developing nations, the business environments are full of several challenges thereby make these situations frustrate entrepreneurs and render industrial development quite slow. These authors state further that lack of infrastructure, unnecessarily cumbersome bureaucracy, inefficient access to credit facilities, corrupt practices by officials, and difficult regulation for new businesses and business expansion are among the problems facing SMEs in the developing nations. On this note, these authors concluded that these problems will not encourage positive attitude to entrepreneurial activities and also not allow for industrial development in these nations.

 

Nonetheless, Nigeria has now reached middle income status according to the World Bank analysis, with its abundant supply of natural resources, well-developed financial, legal, communications, transport sectors and stock exchange, and it is the second largest economy in Africa. It was ranked number 31st in the world in terms of GDP as of 2011 (the Nigerian Stock Exchange, 2012). Furthermore, Nigeria is also mentioned as one of the emerging economies known as ‘MINT -Mexico, Indonesia, Nigeria and Turkey’ (Business Insider, 2013). The famous economist, Jim O’Neill who proposed ‘BRIC (Brazil, Russia, India and China)’ explained that:

 

“I spent last week in Indonesia, working on a series for BBC Radio about four of the world’s most populous non-BRIC emerging economies. The BRIC countries — Brazil, Russia, India and China — are already closely watched. The group I’m studying for this project — let’s call them the MINT economies — deserve no less attention. Mexico, Indonesia, Nigeria and Turkey all have very favourable demographics for at least the next 20 years, and their economic prospects are interesting.”

 

This is supported by the speech of the Nigerian Representative and Regional Director of the United Nations Industrial Development Organization (UNIDO) – Dr. Kormawa – who stated that Nigeria has high industrial potential following the number of companies emerging on annual basis yet there is still room to unlock several potentials as this country still has evident traces of low living standard and high level of unemployment among others. Thus, it is worthwhile to research how entrepreneurial development in such country (Nigeria) with consideration of the several opportunities therein has been deterred from fostering considerable economic development with respect to evident barriers.

 

Based on the above statements, this thesis emphasizes on entrepreneurial development at the SME level in Nigeria as a developing nation with a case study of the Nigerian printing SMEs, how these companies have been able to achieve in spite of barriers, and it presents possible opportunities as well as means to overcome the barriers for the SMEs. Nevertheless, the next subsection presents how the thesis is structured.

 

 

1.2      Structure of the Thesis

 

There are two parts in this thesis – theoretical and empirical parts. The theoretical part consists of introduction, literature and goals of the thesis and research question while the empirical part comprises of methodology, data analysis and results, discussions, and contribution; altogether, there are seven chapters in the thesis.