The need for the development of entrepreneurship in selected sports in a depressed economy

Introduction

Entrepreneurship is a self-employed business practices which is influenced by business activities. It is one of the major driving forces of economic growth (Paul,1996). He further said that entrepreneurship gives people the freedom to start their business and use the factors of production in a way that will enable them make profit.       

Melanne (2012) stated that entrepreneurs are leaders that are willing to take risk and exercise initiatives. They take advantage of market opportunities by planning, organising and employing resources by innovating new products. They are people that are willing to put their careers and financial security on the line, all in the name of making new ideas.

Umale (2012) asserted that entrepreneurship teaches possible ways of raising finds, organizing your financial structure, how to manage growth and valuation of companies.  He further said an entrepreneur is a multi-tasking capitalist, successful entrepreneurs have the ability to lead a business in a positive direction by proper planning to adapt to changing environment and understanding their own strength and weakness. Entrepreneurship comes in so many forms, from acting more pro-actively on the job and creating more value for your employers to actually setting up a totally new venture.

According to Ratten (2011), sports entrepreneurship is a rapidly emerging area of entrepreneurship and sport management research. The process of sports entrepreneurship involves social entrepreneurial and social innovative activities that are carried out in the sports context. Sport as an industry is amongst the world’s largest and affects other industries including education and tourism, which have a integral focus on social innovation and social entrepreneurship. Sport has been ingrained into the social fabric of most countries worldwide and provides a unique perspective of entrepreneurship. The sport entrepreneurial process is usually initiated by organizations, people or governments who are embedded in both economic and social areas.

Sports entrepreneurship occurs to a large extent in professional sport, which influences social entrepreneurial ventures. Madichie (2009) states that professional sports provide a service to four main groups: “the fan-base marked by attendance levels, viewership and purchase of team merchandise; television and other media; conglomerates acquiring exclusive broadcasting rights; government and other private investments in construction of sports facilities; to sponsorships or outright team purchases by corporations and even governments”. As professional sport leagues are private businesses charging consumers for the entertainment provided, the way these organizations can be innovative provide an avenue to increase overall profits and market share. Both professional and amateur sports leagues are entrepreneurial. Indeed, the nature of sport means that it is implicitly woven into a society (Smith and Westerbeek, 2007). In addition to profit motives for sport entrepreneurship, corporate managers of sport-related companies can enhance their economic performance by harnessing the power of sport to deliver on community and social objectives (Smith and Westerbeek, 2007).

Conceptual framework

Bob (2002) “entrepreneurship is the recognition and pursuit of opportunity without regard to the resources you currently control, with confidence that you can succeed with the flexibility to change course as necessary and with the will to rebound setbacks.

Chinelo (1997) entrepreneurship the process of creating something new with value by devoting the necessary time and effort, assuming the accompany financial, psychic and social risks and receiving the resulting rewards of monetary and personal satisfaction and independence. It is the willingness and ability of an individual to seek out investment opportunities in an environment and able to establish and run an enterprise successfully, based on identifiable opportunities.

Grace (2001) entrepreneurship is essential for rapid and sustained economic growth and development, that it creates the required manpower and skill necessary for accelerated growth. It reduces unemployment and poverty, for entrepreneurs to be effective in creating wealth and employment opportunities, the government needs to create an investor friendly environment encompassing stable macro-economic policies, and government needs to address urgently the dilapidated infrastructural facilities in the town. There is need to ensure to those with innovative ideas are provided with the financial support to crusade such ideas into reality. Grace went further that, entrepreneurship is all about self-employment and small scale enterprise, ownership or organisation.

Entrepreneurship describes the set of activities related to the introduction of products and services into the market. Entrepreneurship can also involve the creation of new organizations that are dependent on the social-economic environment (Aldrich, 2005). Sport entrepreneurship promotes the creation and sustenance of business ventures by focusing on the significance of business activities. Sport entrepreneurship encourages new business ventures by taking advantage of globalization and an entrepreneurial way of life. Sport entrepreneurship may go beyond existing resources to expand their business ventures. The overall objective of this paper is to draw on the entrepreneurial process of discovery, enactment, evaluation and exploitation of market opportunities (Baker, Gedajlovic and Lubatkin, 2005) to focus on sport entrepreneurship in the social sector. Sport entrepreneurship behaviour such as the adoption of risk taking behaviour stems from the complexity of the global market, which has a number of different sports contexts. These contexts include both for-profit professional sport teams but also community sports played for a non-profit motive in local communities.

Sport entrepreneurship is associated with the application of entrepreneurial strategies to business ventures. The practice of sport entrepreneurship entails the use of social skills and market knowledge. Entrepreneurship in sports involves people in the sports context developing a mindset that encourages innovation. An entrepreneurial mindset is defined as “the way of thinking about business which focuses on the creation of opportunities under uncertainty and goes along with a growth-oriented perspective, flexibility, creativity, innovation and renewal” (Harms, Schulz and Kraus, 2009).

Sports entrepreneurs encourage continuous change and innovation by looking for future trends and opportunities. Sports entrepreneurs can therefore be defined as people who are innovative, proactive and risk taking in the sports field by developing an entrepreneurial venture. These entrepreneurs can be experienced in a specific industry or in a niche area such as sport(Klepper, 2001).

The history of entrepreneurship

According to Amazing World (2011) the term “entrepreneurship” was derived from the 17^th century. A French world “entreprendre”, the term refers to individuals who were undertakers that is, who under took the risk of new enterprise in fact entrepreneurs in the ancient times were soldier of fortune, adventures, builders and merchants.

The term “entrepreneur” was first introduced by the French economist Richard Cantillon in 1755 but the concept gained prominence from 1800, used the word or term to describe someone who shifts economic resources of an area of lower productivity into one of higher productivity and greater yield.

Adam Smith viewed the entrepreneur as a person who undertook the formation of an organisation for commercial purposes. He therefore, ascribed to the entrepreneur the role of industrialist. In his view, entrepreneurs reacted to economic agents who transform demand into supply. In the 19th century entrepreneurs were given new-name which is captain of industry. They were risk takers, the decision makers and the individuals who aspire wealth were subject to losses. They were the ones who gathered managed resources to create new ventures. Over time the meaning of entrepreneur change from captain of industry to an individual who made profit at the expense of other members of the society.

Government policies on entrepreneurship in sports development

To enable private sector participation in sport development, the government which has a fundamental responsibility of promoting their growth has come up with policies to engender adequate private sector participation in sports development. Udeh (1999) stated that the policy of government in sport entrepreneurship development contains incentives, guidelines and institutional framework for the regulation of the growth and development of sports entrepreneurship in Nigeria. Its aims are, include increased private sector participation in sports development, providing greater employment opportunities, improving the technological skills and capacity available in sports development in the country.  The incentives contained in the policy are financial and technical/ institutional assistance, etc.

According to Nwabuzor (1990), some of the Incentives given by the government are:

• Financial incentives
• Fiscal incentives
• Technical/institutional assistance

1. Financial incentives: Finance is the livewire of any business and an essential ingredient for the survival and growth of any business enterprise. Government’s role as a financier of business comes mainly through government agencies, financial institutions and establishments that provide various types of funding for both the public and private enterprises.
2. Fiscal incentives: Besides financial incentives, the Nigerian government provides other forms of assistance to entrepreneurs to give them some considerable measure of relief and advantages in carrying out their activities. Some of these are tax and tariff related incentives. Tax holidays are granted to entrepreneurs for the first six months of operation.
3. Technical/institutional assistance: Entrepreneurs in Nigeria have equally over the past decade enjoyed technical assistance and implementation support from the government’s numerous institutes and agencies.

Theories of entrepreneurship

Kayode (2006) as cited by Umale (2012) pointed out that the theories of entrepreneurship are the guiding principles that direct entrepreneurs to ensure that success is achieved. These theories include:

1. Shackle theory: According to shackle the entrepreneur is someone who is creative, imaginative and original. Shackles entrepreneur creates and imagines the opportunities. Shackle further said every person has the potential of creating opportunities which is exercise making choice. Uncertainty gives rise to opportunities.
2. Kizners theory: According to Kizner, an entrepreneur is someone who is alert to perceive profitable opportunities for exchange and trade. It’sable to identify supplies, customers and act as an intermediary. He has no necessity to own resource and his reward arise out of the intermediary function. The Kiznerian entrepreneur is someone who is creative. He is not really a risk taker. He just wants to be independent. According to Kirz everybody has the potential of being an entrepreneur.
3. Knight theory: This theory described an entrepreneur as a specialized group of persons, who bear uncertainty as a risk which cannot be insured against and is incalculable. A risk can be reduced through the insurance principal, where the outcome is known while uncertainty is the risk which cannot be calculated. According to knight, an entrepreneur is a risk taker. These could be financial or personal.
4. Joseph schumpeter: The Schumpeter’s entrepreneur is an innovator who brings about ideas from the introduction of new technological process and products. Schumpeter considered economic development as a direct dynamic change brought by an entrepreneur, by instituting new combinations of production that is innovations. The introduction of new combinations of factors of production, according to Schumpeter entrepreneur may occur in anyone of the following five forms
5. Introduction of new products in the markets
6. The institution of a new production technology
7. The opening of new market for products/services
8. The discovery of new market for supply of raw materials
9. The carrying out of the new form of organization of any industry by creating a monopoly position or the breaking up of it.

Schumpeter also differentiates between an inventor and an innovator. An inventor is one who discovers new methods of new materials while an innovator utilizes inventions and discoveries in order to make new combinations.

1. Casson theory: Here the entrepreneur is someone with different skills from others. He needs skills to co-ordinate scarce resources and make fundamental decisions. The entrepreneur requires command over resources to back their judgement. He is expected to have personal wealth because lack of capital will be a barrier to successful entrepreneurship.
2. Everett Hagen theory:Hagen agrees with Schumpeter’s technology and Shackle’s creativeness. The entrepreneur as a creative problem solver who is interested in things of the technological and practical realms with a motivation of duty to achieve. He solves practical problems in most cases with creative technologies, which brings about economy development.
3. David McClelland theory: McClelland argued that it is the drive for achievement,(not just competence) that makes people venture into entrepreneurship. What motivates entrepreneurial activities is the need for achievement. He concluded that there are some special entrepreneurial characteristic that support achievement which are a strong desire for responsibility and independence, high degree of self confidence and so on.
4. Frank Young theory: Young is a sociologist theorist is theory talks about charge. He believes that entrepreneurs are not super normal individual. This indicates that inter-group relationship affect entrepreneurial activities. According to young a group will react and tend towards entrepreneurial activities when two conditions.

These conditions are:

1. Group that is experiencing low status recognition and denial of access to important social network.
2. A group that posses a gear range of institutional resources than others.

According to young, the group will work harder and strives to be autonomous, in these conditions. They are being denied; they will become much more successful as entrepreneurs.

1. Thomas Cochran: Cochran is a sociological theorist. The argued that the environment where the individual is being brought up determines the entrepreneurial urge in an individual. He argued that entrepreneur’s performance can be influence by the following factors.
   • His own attitude towards his occupation
   • The role expectations held by sanctioning group
   • The operation requirement of the job
2. John Kunkel theory: John Kunkel is a behaviouralistic theorist. He argues that the entrepreneurial behaviour is a function of the surroundings social structures. That the type social values that exist in the society determine the type of entrepreneurial skill. He also believes that entrepreneurship entails risk breaking as such should be rewarded.

Types of entrepreneurs

Clarence (1996) classified entrepreneurs into four types: viz

• Innovating entrepreneurs
• Imitative entrepreneurs
• Fabian entrepreneurs
• Drone entrepreneurs

1. Innovating entrepreneur: The innovating entrepreneurs is one who introduces new goods, inaugurates new method of production, discovers new market and reorganises the enterprises
2. Imitative entrepreneurs: They are characterised by readiness to adopt successful innovation inaugurated by innovating entrepreneurs. They do not innovate themselves, they only imitate techniques and technology innovated by others.
3. Fabian entrepreneurs: They are sceptical in experimenting any change in their enterprises. They only initiate business when they realized that, if they don’t start the business. It would result to a loss.
4. Drone entrepreneurs: They are characterized by a refusal to adopt opportunities to make changes in production formula such entrepreneur may even suffer from losses but they are ready to make change in their existing production method.

Other behavioural scientists have the following as types of entrepreneurs and they include the buyer, active partner, inventors, life-timers, challengers and solo operators.

Buyer: These entrepreneurs are risk averse. They do not like to bear much risk. So in order to avoid or reduce the risk involved, they will prefer to buy an existing business/an enterprise.

Active partner: These entrepreneurs caring or start enterprise as a joint venture. In this respect they all participate actively in the day to day operation of the business.

Inventors: Entrepreneurs here, has competence and inventive capacity. They are interested mostly on research and innovative activities. They always invent new products and technology.

Life-timers: They take business as an integral part of their life. Business is a focal point in their day to day activities including bring business to their domestic affairs.

Challengers: Entrepreneurs in this group gets motives into the industry to be earners of the challenges in the industry. Presently, in this regard when such entrepreneurs have successful in a particular challenge they begin to look for new challenges.

Solo operators: These entrepreneurs always want to work alone. Though when the need arise, they will employ a few employees most of the entrepreneurs started as solo-operators. After which they expand due to the size and complexity of operational activities.

Roles of entrepreneurship in sports in economic development

The roles of entrepreneurship in sports are crucial to the economic development of any nation. These roles include:

1. Promotion of capital formation: Entrepreneurs in sports employ their own as well as borrowed resources for setting up their enterprises. This will lead to value addition and creation of wealth (Ann, 2012)
2. Creation of large scale employment opportunities: Entrepreneurship in sports helps in the creation of large scale employment opportunities setting up of more units by entrepreneurs on numerous sports job opportunities are created for others and as time passes enterprises in sports grow (Umale, 2012).
3. Promotion of regional development: Entrepreneurship in sports promotes balance regional development, entrepreneurs in sports help to remove regional disparities through setting up of sports outfits in less developed and backward area, the growth of the sporting activities in these area lead to a large number of public benefit like road transport, health, education and entertainment (Chidiebere, 2012). She further said that it produces wealth creation and distribution. It stimulates equitable redistribution of wealth and income in the interest of the counting to more people and geographic areas, thus giving benefit to larger sections of the societies.
4. Improves the standard of living: Entrepreneurs in sports play a key role in the standard of living by adopting latest innovations in the sports and other sport promotional services in large scale that at a lower cost for the purpose of earning large amount of foreign exchange from export in order to combat the import due requirement (Agu, 1996).
5. Induces backward and forward linkages: Entrepreneurs in sports like to work in an environment of change and try to maximise profits by innovation when a sports enterprise established backward and forward linkages (Geoffrey & Meredith, 1996).
6. Creation of new technologies and ideas: Entrepreneurshipin sports development encourages creativity and innovation among individuals (Nwachukwu, 1990).

Factors for key competencies and success in entrepreneurship in sports

Morris and Kiratkpo (2002) stated that the most critical and most important factors that can make an entrepreneur to become a successful entrepreneur in sports are:

1. Willingness to take an action: This is the first and most important factor for would be and current entrepreneurs in sports. All other factors presented below, are not important if you are person who afraid to take a real action. Actions are something that leads entrepreneurs to success. Without them, they can’t expect to be successful business owners.
2. Knowledge: Knowledge is a necessary requirement for success in sport entrepreneurship. Entrepreneurs in any field of endeavours are persons who must have superior knowledge about specific business issues for business that they start. The knowledge will increase their business potential energy and in large part will contribute in the success of the company.
3. Creativity: This is the ability to improve on an existing idea. Creativity increases business potential energy that opens the door for business opportunities.
4. Skills: Different businesses require different skills to be successful. If an entrepreneur has knowledge, but you do not have necessary skills, the entrepreneur will find it difficult to succeed.
5. Intelligence: An entrepreneur must be intelligent to manage all possible situations and solve the hardest problems that will be a constant in the business. The intelligence of the entrepreneur will additionally bring uniqueness to the business because it is something that cannot be copied from others.
6. Patience: Entrepreneurs must be patient and ready to continue even if they are running at a loss.
7. Persistence: Persistence is simply a refusal to give up from something, or ability to keep your actions against your personal feelings. Feelings and motivation do not produce results, but the action is something that will produce it.

Problems militating against sports entrepreneurship development

According to Hisrich and Peters (2011), the following are some of the problems militating against sports entrepreneurship development:

• Lack of capital
• Ignorance
• Poor marketing structure
• Lack of managerial expertise
• Poor infrastructure

1. Lack of capital: Sports entrepreneurship is hindered by lack of capital especially among small scale entrepreneurs. This is due to the fact that for a successful entrepreneurship in sport and sporting activities huge funds are required in terms of facilities and equipment required.
2. Ignorance: Entrepreneurship in sports is also greatly affected by high level of ignorance in sporting activities, technical knowhow and available business opportunities in sports.
3. Poor marketing structure: Many enthusiastic and potential business men have become frustrated out of sports business because of failure to get full recognition. Entrepreneurs in sports should adopt the marketing concepts as a philosophy of business in order to attain and sustain production at desired capacity level and protect the long run interest of profit making.
4. Lack of managerial expertise: Lack of managerial expertise is a major problem among sports business men and women because they do not have adequate sports management education. They manage sports business on the basis of trial and error.
5. Poor infrastructure: Infrastructural facilities are important for the carrying on and the operation of any sports business enterprise. Inadequate and lack of these sports facilities is a big problem to be contended with by sports businessmen.

Strategies of economic development in sports

Okenwa (1990) highlight the following strategies for economic development in sports:

1. Government should make provisions for economic development in sports through the provision of adequate paying, productive employment opportunities for people especially for the very poor.
2. Sports men and women should be given a chance to develop and use their capacities so that they can benefit more through their own effort from the resources of the economy
3. There should be functional sports entrepreneurship education that would make people to be job creators rather than job seekers.
4. Government should review fiscal policy to reduce taxes and inflation. This will increase disposable income and consequently increases the investment capacity of people in sports.

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