The roles of entrepreneurship and entrepreneur in the growth and development of Nigeria include:
- Employment generation/reduction of unemployment
The process of entrepreneurship activity reducing unemployment situation in the economy is termed “Schumpeter effect”. It has been observed that, unemployment is negatively related to new-firm startups, that is, as new businesses are established employment of resources is stimulated and unemployment reduces substantially. In the same vein, it was noted that high unemployment in the society is associated with a low degree of entrepreneurial activities, that is, where propensity to set up enterprises is low; the rate of unemployment would be very high. The implication of the above assertions is that those who are unemployed tend to remain so because they possess lower endowments of human capital and entrepreneurial talents required to start and sustain new firms to keep them going. A low rate of entrepreneurship culture and skills in any society may be a consequence of the low economic growth, which also reflects higher levels of unemployment.
- Wealth creation and poverty reduction
Entrepreneurship enables individuals to use their potentials and energies to create wealth through the creation of goods and services. Poverty is a condition of living that is characterized by lack of the basic necessities of life. One of the major cause of poverty is unemployment and since entrepreneurship is preoccupied with employment generation, then by extension the generation of employment will therefore reduce the level of poverty. Wealth if created will definitely reduce the incidence of poverty by empowering the citizens and increasing their access to basic necessities of life (food, clothing, shelter, security and education)
- Reduction in rural – urban migration
The burgeoning problems of urban unemployment and population congestion owing to the rapid rural urban drift find its ultimate solution in the restoration of a proper balance between urban and rural economic opportunity. Rural entrepreneurial activity in generating employment is the link achieving this balance.
- Reduction of crime rate
It is strongly believed that unemployment is responsible to a large extent for the level of social complication of armed robbery, political thuggery, drugs peddling, prostitution, money laundering, currency counterfeiting, e-mail scam, and other such related crimes. When individuals are unable to satisfy their needs, most often, frustration occurs. These frustrations breed fraudulent practices. Employment generation therefore will reduce the level of frustration and consequently, crime rate.
- Raising the standard of living
Entrepreneurship through job and wealth creation raises the standard of living of people. Owing to higher income earning and availability of disposable income, they can therefore, afford the basic necessities of life such as housing, clothing and food, education, good health care delivery, etc.
- Rural development
Rural enterprises through employment generation stimulate rural development and the achievement of a meaningful level of broad economic development. It decreases inequality in distribution of rural income and reduces urban-rural imbalances in income and economic opportunities.
- Encourages capital formation
One factor responsible for the poor state of an economy is low capital formation. When individuals are employed, they can afford to save out of their disposable income. Entrepreneurs can therefore, facilitate the use of these savings thereby stimulating capital formation, which is the engine of economic growth and development.
- Skills acquisition and increase in the level of productivity
Employment generated by entrepreneurship can be a training ground where individual acquires and develops skills for creativity leading to a general increase in the level of productivity.
Entrepreneurship has been recognized as an important economic activity that is involved in providing unique product and process of doing things, it is the act of being an entrepreneur and have been playing the role of employment generation, wealth creation, poverty alleviation among others, it is therefore considered to be the engine for growth and development especially in developing countries like Nigeria. Based on its central role in economic development, respective governments, non governmental organizations, community based organizations and other stake holders should promote its development in order to reap its full benefits.
The entrepreneur plays a vita role in the process of economic growth and development. Iwu (1986) in a paper presented in on entrepreneurship development in Nigeria said that an entrepreneur is a contractor, an organizer of an enterprise for the public, a resourceful person with a dream. Entrepreneurs are bold men and woman who have initiative and the ability to lead, manage and take the consequences. They are men of action, risk takers, missioners, creative and highly respected of their ability to effectively and efficiently concubine the functions of management to achieve the goals.
