Implications Of Entrepreneurship On Employment Generation

Implications Of Entrepreneurship On Employment Generation: Evidence From Enugu State


The topic of this study, implication of entrepreneurship on employment generation: evidence from Enugu State, seeks to find out the employment potentials of entrepreneurship in Enugu State, to identify the core problems militating against the establishment of small business and to determine the contributions of employment to economic growth. Data was collected from CBN




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After payment, text the name of the project, email address and your names to 08064502337 statistical bulletin and other statistical sources, regression was used to analyse the date collected.  The study revealed that entrepreneurship have the capacity to generate employment; and this in turn has a positive impact on economic growth. Small scale businesses depend so much on loan, power and education for their survival. It is recommended that government should increase the annual allocation to NDE in order to increase the number of graduates and undergraduates it will empower. Government should also subsidize the loan giving to the entrepreneurs, make education cheap and invest more on power sector to boost employment.



            Almost without exception academic studies on entrepreneurship are motivated by the economic benefits of entrepreneurship. Most studies refer to one or two academic studies suggesting that entrepreneurship indeed leads to substantial  benefits in terms of, for instance employment generation. However, whether the cited  reference was one of the two out of many studies that “happened” to find supportive evidence is not yet clear. This work examines to what extent recent empirical evidence can collectively and systematically substantiate this claim. Entrepreneurs and their counterparts are defined and compared in terms of their contribution to the creation of economic value. Hence, the aim id to review recent empirical literature that provides an answer to the question: what are the implications of entrepreneurship on employment generation?

1.1        Background Of The Study

            In many developed countries of the world entrepreneurship have proved to be the gateway towards economic greatness. Western nations attained the peak of their industrial development especially in manufacturing sector through the activities of entrepreneurs which resulted to the establishment of many small-scale enterprises. The activities of entrepreneurs plays a crucial role in the socio-economic development of a country not only by providing the training ground for the development of indigenous business venture but also through the business ventures but also through the production of goods and services for both intermediate and end users as  well as utilizing low capital for creating jobs especially in a fast growing service sector of an economy.


Entrepreneurship serves as a vehicle through which ideas for new products and services find their way to the consuming public. According to Nwankwo (1992) it is estimated that up to 90% of all registered businesses in Nigeria are in the category of small-scale businesses pioneered by entrepreneurs. Since entrepreneurship contributes immensely in employment generation, all levels of government in Nigeria are designing series of programmes to increase the level of awareness of its citizens on the importance of entrepreneurship as regards its employment possibilities.

The high rate of unemployment in Nigeria is being reduced drastically because Nigeria youths decided to shift from the traditional practice of waiting endlessly for white collar jobs to ideas generation and implication which transforms to the development of small-scale businesses. This new development makes Nigerian government to pay more attention to programmes and policies that contributes to entrepreneurship development.

It is in realization of the role of entrepreneurship that motivated   this research on “Implications of entrepreneurship on employment generation” and taking cognizance of the fact that our economic recovery and eventual industrialization would be faster and better attained in our rural and urban areas through entrepreneurship.

1.2        Statement Of Problems

It is no longer news that fresh graduates in the National Youth Service programme employ all forms of corrupt practices to remain in service for up three years or more because of the very low chance of getting employed after the exercise unlike employers go to different higher institutions to offer jobs to the graduating students before they graduate.

Taking cognizance of the time and age we are in now, coupled with the volatile nature of the Nigeria economy, being a paid employee is so risky. In view of the problem, the government at all levels as well as private individuals have recently realized the importance of entrepreneurship as a path to economic development, hence they have resolved to focus their efforts and interest on the development of their own business. This development would no doubt help to solve the unemployment problem for owners and create some employment opportunities for others. However, this enthusiasm not withstanding only few individuals succeeded in the final analysis in setting up their own small-scale business (Osha Gbana, 1996). This delays our desire to attain great   economic heights. The reasons attributable to this situation include lack finance, difficulty in accessing credit facilities, inadequate infrastructure among others. It is a well-known fact that in this country, many small scale businesses are only existing in name. The major reason responsible for this state of affair is the low capitalization structure. For instance, in small-scale businesses, both owned and loanable funds are found to be insufficient coupled with lack of managerial skills to manage the businesses. The unfavourable financial constraint not only leads to poor performance by small-scale businesses (entrepreneurships) but also affects their employment potentials adversely. Therefore, unless these problems are tackled, the problem of unemployment will be very difficult to handle.


Thus, the dynamic role entrepreneurship is expected to play in our march to economic greatness and the motivation of entrepreneurs are not being realized at all. This is a great threat to our national economy.

1.3        Objectives Of The Study

  1. To ascertain whether entrepreneurship have the capacity to generate employment.
  2. To identify the core problems militating against the establishment of small businesses.
  3. To determine the contributions of employment to economic growth.

1.4        Research Questions

  1. Do entrepreneurship have the capacity to generate employment?
  2. What are the core problems militating against the establishment of small businesses?
  3. What are the contributions of employment to economic growth?


H0:     Entrepreneurship   with other factors has no capacity to generate employment.

H1:     Entrepreneurship with other factors has the capacity to generate employment.


H0:     Loan, power and education have no significant effect on small business establishment.

H1:     Loan, power and education have significant effect on small business establishment.


H0:     Employment export and savings have no significant impact on economic growth.

H1:     Employment, export and savings have significant impact on economic growth.


Emp = f (ent, GDP, exp) …et (i)

Emp = ao L emt + a1 L GDP +a2 L exp)….(ii)

Ent = f (ln, pwr, edu)………… (i)

Ent = ao L ln + a1 L pwr +a2 L edu) …..(ii)

GDP = f (emp, exp, sav) ………et (i)

GDP = ao L emp + a1 L exp + a2 L sav)…..(ii)


Emp = Employment

Ent = Entrepreneurship

GDP = Economic growth

Exp = Export

In = Loan

Pwr = Power (electricity)

Edu = Education

Sav = Savings

Et = Error term

1.7        Scope And Limitation Of The Study

The research centers on some major business areas in Enugu State. It took so much time and energy to convince the owners of the businesses to cooperate and give out some vital information needed for the study. After elaborate explanation and assurances, they still believe that the study will in one way or other reveal their business secrets and therefore withheld vital information relevant to the study.

1.8        Significant Of The Study 

Entrepreneurship is the route to ownership of capital and participation in efforts towards the economic and industrial growth of the nation. They serve as a breeding ground for the emergence of large industries.

The research is of immense importance to the growth of people as it provides:

  1. Persons venturing into small scale business the opportunity to appreciate what is needed and the expected problems that might arise.
  2. Assistance to the government in matters of policymaking as it gives the government an opportunity to appreciate the problems facing entrepreneurs.
  3. Information on the threats and opportunities inherent in the establishment and operations of small scale businesses.
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Business: Unamka (1989) defines business as “all profit oriented economic and commercial activities that provide goods and services necessary for a nation’s standard of living.

Umeabali (1997) sustained that business is concerned with the production and marketing of goods and services for the aim of making profit.

            Small Scale Business: Baumback (1992) sustained that the term small-scale business has been used generally without specific and careful definition of what “small-scale” is. It can be defined based on:

  • Employment
  • Assets value
  • Naira sales volume.

According to small business act of 1953, a small business is one which is independently owned and operated and not dominant in its field of operation.

            Employment: Oxford Advanced Dictionary defined employment as the act of giving  somebody a work to do in return for payment. It is work, especially when it is done to earn money.

Entrepreneurs: These are men and women of action. In the real sense, an entrepreneur is someone who assume the risk of business ownership  and manages it for profitable purposes (Onwuchekwa 2002: P241). They are individualist and opportunists that possess the will-power to take risk by initiating and starting a business and the vision helps them to influence their environment, realize their potentials and rationalize their behaviour. In the cooperative business. They are called co-operators, in the partnership  business they are called partners, in one –man businesses, they are known as sole proprietors, while in a limited liability company, they go by the name shareholders.

Implications Of Entrepreneurship On Employment Generation: Evidence From Enugu State


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