Dec'19

Articles

Entrepreneurship Development and Poverty Reduction in Nigeria: A Study of Industrial Layout, Emene, Enugu State, Nigeria

Onyi Akachukwu Joseph
Lecturer II, Department of Industrial Relations and Personnel Management, College of Management Sciences, Michael Okpara University of Agriculture, Umudike, Abia State, Nigeria; and is the corresponding author. E-mail: johaka4me@yahoo.co.uk

Ikechukwu Dialoke
Senior Lecturer, Department of Industrial Relations and Personnel Management, College of Management Sciences, Michael Okpara University of Agriculture, Umudike, Abia State, Nigeria. E-mail: drikechukwudialoke@yahoo.com

Edeh Friday Ogbu
Lecturer II, Department of Business Management, Faculty of Management and Social Sciences, Alex Ekwueme Federal University, Ndufu-Alike, Ebonyi State, Nigeria. E-mail: edeh.ogbu@gmail.com

This study evaluates the effect of entrepreneurship development on poverty reduction in Nigeria using data from the industrial layout, Emene in Enugu State. Survey research method was adopted for making qualitative and quantitative evaluation by collecting relevant and substantive data. Primary and secondary data were used. A questionnaire was designed to collect necessary and relevant data from 396 respondents. The hypotheses were tested using regression analysis. The results showed that all the independent variables (skill acquisition, youth requisite training and creativity and innovations) had positive significant effect on the dependent variable (poverty reduction). The study recommends that all the levels of government, academic institutions, donor agencies and private organizations should urgently support entrepreneurship development as it is a good strategy for reducing poverty in Nigeria and other countries of the world.

Introduction
One of the major challenges faced by developing countries like Nigeria is the provision of adequate employment for its citizen. Entrepreneurship is considered as the bedrock for sustainable economic development and poverty alleviation in developing countries, like Nigeria. An entrepreneur is a person, who embarks on the path of innovation as well as finances the business in an effort to obtain economic value for innovations. In other words, it is the ability to perceive and undertake business opportunities, utilizing scarce resources. Hisrich and Peters (2002) described entrepreneur as a person who takes the necessary steps to develop something new that has value and back it up with the necessary financial initiative, and takes the risks involved that usually results in financial reward and personal satisfaction.

Poverty arises when people lack, i.e., cannot afford the three essential requirements of living-food, clothing and shelter. According to World Bank (2018), poverty is the economic condition in which people lack sufficient earnings to obtain certain minimal levels of health services, food, housing, clothing and education which are necessities for living. Poverty is now the world's greatest challenge, and the major developmental objectives are achievement of equality in the distribution of income and reduction of poverty. There are two types of poverty: (1) people living on less than US$1.90 per day as extreme poverty; and (2) people living on less than US$3.10 per day as moderate poverty. Poverty reduction is the top priority of the United Nations (United Nations, 2018).

Entrepreneurship seems to be the backbone of every vibrant and resilient economy. The importance of entrepreneurship in enhancing Human Capital Development (HCD) in terms of poverty alleviation, employment generation, wealth creation and economic synergy has given entrepreneurship global prominence. Thus, the need for the pursuit of poverty reduction through entrepreneurship is highly essential for growth and structural alteration of an economy and realization of economic development.

During the fourth quarter of 2015, out of an economically active population (15-65 years) of 104.3 million, the labor force was 75.9 million, youth population was 36.38 million (48% of the total work force) and about 20.7 million (49.6% of work force) were either unemployed or underemployed. These records highlighted the need for proficient entrepreneurial development in Nigeria which is vital for socioeconomic growth, poverty reduction and sustainable development (NBS, 2016).

Deficient capacity building normally results in prevalent poverty, corruption, insufficient resources and ineffective human capital supplies (Roy, 2010). Nigeria was experiencing increasing rate of poverty both at the state and national level, accompanied by high unemployment rate, high income disparity, low quality human capital, and high percentage of population migrating out of the country NBS (2014). World Bank (2018) posits that many developing countries in Africa have now realized that entrepreneurship development is the only way of attaining industrialization and consequently are making conscious efforts for developing native entrepreneurs as an alternative measure for poverty reduction and wealth creation.

Despite the fact that entrepreneurial development has brought far-reaching transformations in the economy, it is still neglected and therefore restricted from developing to its full potential. A small body of literature is available on the effect of entrepreneurship development on poverty reduction. Hence, the present study is an attempt to fill this gap. This study focuses on entrepreneurship and poverty reduction in Nigeria. It considers the entrepreneurship activities conducted in the industrial layout, Emene, Enugu State in Nigeria.

Literature Review
Concept of Entrepreneurship and Entrepreneurial Development
CBN (2015) defined entrepreneur in various ways: the originator of a profit-making or economic venture which is instituted for the purpose of providing goods and services that satisfy the needs of the people. It entails an individual who undertakes innovations, uses his/ her acumen in an effort to transform innovations into economic goods that results in profit making. Entrepreneur can be viewed generally as a person who wields some personality or traits to start up a business venture with the purpose of making profit. It involves the ability of an individual to identify profitable opportunities and have the understanding, expertise and attitude to act on them. Entrepreneurs control the manufacturing industries in Nigeria and account for about 70% of manufacturing employees and 10-15% of industrial production (CBN, 2015).

In his contribution, Paul (2014) sees entrepreneurship as the effective manipulation of human intelligence as demonstrated in creative performance. It is the enthusiasm and the capability of an individual to search for latest business opportunity, set up the business based on feasibility study and manage it successfully either for income making or societal benefit. It also includes creating innovation and promoting new sets of attitudes and culture for the attainment of upcoming challenges (Dialoke et al., 2017).

Entrepreneurship is an important element in the dynamics of all economies and it is regarded as the driving force in economic growth and job creation (Sunter, 2005; and Ogbodo, 2009). It is actually concerned with the recognition of gaps and commercial opportunities in individual's direct surroundings and bringing together the necessary resources in an innovative way to fill these gaps and in the process gaining personal rewards (which may or may not be for profit motive). Entrepreneurship can be viewed as the process of gathering human and non-human resources to create and build an independent enterprise. This process entails skill acquisition, creativity, risk-taking and innovation, among others (Dialoke et al., 2017).

Human Capital Development
Entrepreneurship is one of the ways by which HCD can be enhanced in a country. Human capital is the term economists often use for education, health and other human capacities that can increase productivity, when improved. It entails human beings who have acquired skills, knowledge and attitudes which are needed to achieve organizational productivity. This can be achieved through education and training. In other words, it refers to the abilities and skills of human resources of a country, while HCD refers to the process of acquiring and increasing the number of persons who have the skills, education and experience that are critical for the economic growth and development of an economy (Okojie, 2005). HCD, therefore, focuses on all activities directed towards producing people with appropriate skills, knowledge, attitude, motivation and job-related experience which is required for organizational productivity and improvement.

An early advocate of HCD, Adam Smith, viewed it as an acquired and useful capability of every individual of the populace or members of the society. Todaro and Smith (2009) viewed human capital as the productive investment embodied in individuals. These include skills, abilities and ideas resulting from expenditure on education, on-the-job training programs and healthcare.

Entrepreneurship and Creativity and Innovation
Entrepreneurship development is a process embarked on by the government to reduce the level of poverty in the economy. It entails creating innovation and promoting new sets of attitudes and culture for the attainment of future challenges (Ibitoye et al., 2015). Creativity is simply a matter of being aware that things can be done in many different ways. While necessity is said to be the mother of invention, creativity is the father of invention. Some people are aware or at least confident enough to have fewer inhabitants and can easily put their creativity into work.

Innovation, on the other hand, is the ability to apply new ideas that enable one to approach activities differently in order to achieve better results. It is all about improving on the existing way of doing things through personal inventiveness and thoughts. An innovative person is able to change things around or formulate new ways of doing things in order to contain whatever new situation that may arise. Information on different issues and fields therefore serve as inputs. Thus, successful entrepreneurs place great value on information and constantly engage themselves in research. Innovation in the business context is generally regarded as the product or application of creativity. It can thus be seen as the specific instrument of entrepreneurship (Okafor, 2014).

The importance of entrepreneurship in enhancing HCD in terms of poverty alleviation, employment generation, wealth creation and economic strength has given entrepreneurship global acknowledgment. The fundamental drive of this investment in human capital goes on to cause improvement in productivity and performance, which leads to more output of goods and services in an economy. Many scholars have concluded that the disparity in the echelon of socioeconomic development between countries is not only due to their natural resources and physical capital but the quality of human capital (Dauda, 2010).

Entrepreneurship and Skill Acquisition
Skill acquisition is equivalent to entrepreneurship training and education or HCD. McClure (2005) depicts that skill acquisition is the ability to execute a job either mentally or physically, which engage building up a series of process and actions into a consolidated progression. He advocated a model of skill acquisition for students through formal instruction and practicing.

According to Fakomogbon and Adegbija (2011), skill is the ability developed in the process of training and experience. Skill acquisition is a process where the youth, through learning of necessary skills that enable them to be self-reliant, become useful to the society by embarking on profitable entrepreneurship venture. Of all factors of production, only human beings are capable of learning, adapting or changing, being innovative and creative. The human factor affects production immensely. Entrepreneurship equips the youths to embrace entrepreneurial culture and supports the government entrepreneurship programs necessary for their empowerment. It inculcates six empowerment elements-psychological, community, organizational, economic, social and cultural-in the youth.

Concept of Poverty
Poverty has been defined in various ways and contexts. Poverty implies lack of basic things, such as food, clothing, shelter and access to potable water, all of which decide the value of life. It may also include access to opportunities such as education and employment which aid the escape from poverty and/or allow one to enjoy the respect of fellow citizens. Poverty, in general, entails a state in which an individual or household is unable to meet the basic needs of life considered as the minimum requirements to sustain livelihood in the given society. It is a deplorable dispossession of individual of basic requirements of life. It can be physiological or social deprivation. Physiological deprivation entails the non-fulfilment of basic material or biological needs, including inadequate nutrition, health, education, and shelter. Social deprivation widens the concepts of deprivation to include risk vulnerability, lack of autonomy, powerlessness and lack of self-respect (CBN, 2015).

Absolute poverty is a situation where an individual is constrained with limited financial resources and he is unable to meet his/her basic needs of life such as food, clothes, shelter and health. A World Bank (2018) report indicated that individuals, families or groups are considered to be absolute poverty-oriented when they lack the resources, particularly real income, to obtain the fixed minimum standard of living by a given society.

About 2.8 billion persons of the world's population live on less than $2 a day, and 1.4 billion on less than $1 a day (World Bank, 2009). Poverty is a major limitation of economic development and the absence of economic opportunity is seen to increase the poverty level of an individual or household. This lack of opportunities is reinforced by inequality. Analysts have argued that problems of poverty and inequality need appropriate policies that aim at bridging gaps and ensuring that the poor in a given population can benefit from it.

Poverty Reduction
According to World Bank's report on the level of poverty in Nigeria in 1999, the Human Resource Index of Nigeria was 0.47 and almost 70% of the population was living below poverty line (World Bank, 2013). According to World Bank (2014), two-thirds of 170 million Nigerians struggle in poverty in Africa's biggest oil producer. Despite per capita income of more than $2,700 and annual GDP growth of 7%, 70% of the people live on less than $1.25 a day. In the north, 72% live in poverty as compared to 27% in the south and 35% in the Niger-Delta. According to the NBS (2014), Nigeria's unemployment rate increased to 23.9% in 2011 as compared to 21.1% in 2010 and 19.7% in 2009.

Human Development Index in 2011 puts Nigeria at 156th position among 177 countries as compared to the 151st position in 2002 (World Bank, 2015). Nigeria's Human Poverty Index for 2009 was only 36.2%, placing Nigeria at the 114th position and among the seven poorest nations in the world, while the ratio of the richest 10% to the poorest 10% was 16.3 with Gini index from 42.9 in 2004 to 44.7 in 2010 (UNDP, 2013; and NBS, 2014). Yet the country ranks at 6th and 7th positions among oil producing and exporting countries and ranks 10th as the most populous country in the world with a real GDP growth rate of 7 in 2009 which increased to 8 in 2010, which however dropped to 6.3 in 2013. Reducing poverty is important for sustainable development because in most developing countries, the likelihood of being poor and the sternness of poverty is high (World Bank, 2015).

Youth Empowerment
Youth empowerment refers to all genuine efforts and strategies aimed at providing the youth with suitable skills, developmental know-how and all positive atmosphere towards enhancing their survival and achieving sustainable livelihood that will affect the present and future growth and development of the nation (Obizue, 2016). UNESCO (2015) identifies four major thrusts to begin the work of youth empowerment as a tool for sustainable development. They are: improving youth's access to quality entrepreneurship education, reorienting existing education, developing public awareness and motivation for entrepreneurship ventures and ensuring efficient training by adequate planning and funding of entrepreneurship education. The Nigeria Youth Policy is the document that stipulates broad guidelines for the implementation of empowerment initiatives and projects of youth. The overall goal of the policy is to provide rights and protect the health, social, economic and political wellbeing of all young men and women in order to enhance their participation in the overall development process and improve their quality of life. Youth empowerment organizations and scheme in Nigeria include:

  • Youth with innovation in Nigeria..
  • Subsidy reinvestment and empowerment program (SURE-P)..
  • Youth Initiative for Sustainable Agriculture in Nigeria (YISA)..
  • Graduate Internship Scheme (GIS) (Journal of Education of Practice, Online, 2017).

Causes of Poverty in Developing Countries (Nigeria)
Poverty in developing countries like Nigeria has impeded their economic growth and development. Some of the causes of poverty in developing countries include:

  • The impact of Boko Haram insurgency in North East.
  • Inadequate access to employment opportunities of majority of the populace.
  • Inadequate access to the means of fostering rural development in poor regions.
  • Inadequate access to markets for the goods and services produced in rural areas.
  • Inadequate access to assets such as land and capital by the populace.
  • Inadequate access to education, health, sanitation and water services.
  • Inadequate access to assistance for victims of Boko Haram drought, flood, pests and war.
  • Inadequate involvement of the poor in the design of development programs (Dialoke et al., 2017).

Theoretical Framework
The Schumpeter Effect
Schumpeter (1934) views entrepreneurship training as responsible for creative destruction. Education acts as a thrust for creating new ideas, improved techniques, new technologies and new products. This theory provides logical explanation that entrepreneurship and unemployment are negatively or inversely related, i.e., increase in entrepreneurship activities in the economy quenches and sustainably reduces unemployment situation. The process of entrepreneurship leading to gainful employment is termed 'Schumpeter effect'.

The implication of the above theory is that when people are provided qualitative entrepreneurship education with hands-on training, they tend to establish their own business later. The theory argues that entrepreneurship training enhances the cognitive state of an entrepreneur and in turn improves entrepreneurship. In other words, entrepreneurship activities lead to increase in setting up of more businesses and hence reduction in unemployment and poverty, thus leading to increase in productivity and wealth, economy growth and development. The long-term effect is increase in efficiency of human capital by increasing the level of their cognitive skills, and therefore any investment in entrepreneurship venture will increase the stock of human capabilities.

Capitalist Entrepreneurial Theory
The first theory that links entrepreneurship and poverty reduction is the theory of capitalist entrepreneurial. This theory focuses on basic exploitation of the poor by means of low wages and poor condition of services which allow for possible rise in savings among the entrepreneurial class. This theory was extracted from Max Weber's Sociological Theory. The entrepreneur becomes a role performer in conformity with the role of expectations based on religious beliefs, taboos and customs. Capitalism thrives under the protestant work ethic that harps on these values. This is the class struggle between the owners of the means of production and the workers (bourgeois and proletariate). The ensuing inequality could lead to vast poverty among the lower income earner, who are the majority in the society.

Empirical Review
Emerole et al. (2016), in their study using a sample size of 260, concluded that requisite training and knowledge, youth skill acquisition and entrepreneurship drive are the variables that have positive correlation with HCD and recommended that all levels of government, academic institutions, donor agencies and private organizations should urgently support entrepreneurship education as it is strategic for HCD in Nigeria.

Kareem (2015) found that there is a positive significant relationship between entrepreneurship and poverty alleviation. Dialoke et al. (2017), in their study, with a sample size of 248, concluded that there is a positive correlation between entrepreneurship and poverty reduction. They recommended that entrepreneurship training and development should be instituted by local government among others. Ibitoye et al. (2015) in their study, found that there exists a positive and significant relationship between entrepreneurship and poverty.

Objective
The objective of this paper is to examine the effects of effective entrepreneurship development on poverty reduction in Nigeria. The specific objectives are to:

  • Evaluate the impact of skill acquisition on youth empowerment in industrial layout, Emene, Enugu, Nigeria.
  • Ascertain the effect of requisite training on job creation in industrial layout, Emene, Enugu, Nigeria.
  • Determine the influence of creativity and innovations on wealth creation in industrial layout, Emene, Enugu, Nigeria.
  • Based on the objectives, three research questions were formulated:
  1. How does skill acquisition affect youth empowerment in industrial layout, Emene, Enugu, Nigeria?
  2. What is the impact of requisite training on job creation in industrial layout, Emene, Enugu, Nigeria?
  3. How does creativity and innovation affect wealth creation in industrial layout, Emene, Enugu, Nigeria?
  4. Based on the research questions, the following hypotheses were formulated.

    H01: Skill acquisition has no significant effect on youth empowerment in industrial layout, Emene, Enugu, Nigeria.

    H02: Youth requisite training has no significant influence on job creation in industrial layout, Emene, Enugu State.

    H03: Creativity and innovation has no significant influence on wealth creation in industrial layout, Emene, Enugu State.

Data and Methodology
Research Design
The study adopted survey research design. This allowed for representative sampling and correlation analysis in predicting behavior (Borden and Abbott, 2002). The descriptive technique was adopted in the analysis.

The study uses both sources of data-primary and secondary. Primary source of data was a selfdesigned, closed-ended, pretested questionnaire consisting of 20 items (see Appendix). Secondary data was gotten from published books and reviewed journals including electronic works. The study was conducted in the industrial layout, Emene, Enugu, one of the southeastern states of Nigeria. The choice of the area was based on a long history of entrepreneurial activities. The actual population of this study is the registered and non-registered enterprises in the industrial layout. The population of study is 2,892, obtained from the Enugu State Ministry of Commerce and Industry (SMEs Unit) (ENSG, 2019).

Sample Size
Using the modified Taro Yamane formula for calculating sample size.

Method of Data Analysis
The research instrument used for eliciting information is a Likert-type questionnaire titled "Entrepreneurship and Poverty Reduction in Nigeria Questionnaire" (EAPRNQ). 5-point rating scale instruments were used with the following response options: Strongly Agree (SA) - 5, Agree (A) - 4, Undecided (UD) - 3, Disagree (D) - 2; and Strongly Disagree (SD) - 1. The questionnaires were subjected to face validation by three experts from Department of Entrepreneurial Studies, Michael Okpara University of Agriculture, Umudike. The corrected version of the instrument guided the structuring of the questionnaire.

The instrument was subjected to reliability test to ascertain the internal consistency of the instrument. To ascertain the reliability of the instrument, a pilot study was carried out on a sample of 20 entrepreneurs in the industrial layout. After a period of 10 days, the same instruments were re-administered to the same respondents. The results were collated and analyzed using Cronbach's alpha (?) method. The reliability coefficient of 0.775 was obtained indicating that the instrument was reliable for the study. Descriptive statistics was employed in the analysis of the questionnaire, while simple regression analysis was employed in testing the hypotheses.

Decision Rule: Reject H0 = If F-calculated is greater than F-critical and if p-value is less than 0.05 level of significance. The relationship between the variables is positive if the correlation coefficient is positive, while it is negative if the correlation coefficient is negative. The relationship is significant if the probability value (p-value) is less than 0.05 and not significant if the p-value is more than 0.05.

Independent Variables:
Entrepreneurship Development
Decision Rule: Reject H0 = If F-calculated is greater than F-critical and if p-value is less than 0.05 level of significance. The relationship between the variables is positive if the correlation coefficient is positive, while it is negative if the correlation coefficient is negative. The relationship is significant if the probability value (p-value) is less than 0.05 and not significant if the p-value is more than 0.05.

Independent Variables:
Entrepreneurship Development

  • Skill acquisition
  • Youth Requisite Training
  • Creativity and Innovations
  • Dependent Variable:
    Poverty Development
  • Youth empowerment
  • Job creation
  • Wealth creation

Results and Discussion
Demographic Characteristics of the Respondents It is observed from Table 2 that 297 (70%) of respondents were male, while 99 (30%) were female. 99 (25%) respondents were aged between 16-20 years, 99 (25%) were aged between 21-29 years, 198 (50%) respondents were aged 30 years and above. Hence, most of the respondents mainly belonged to productive age. Further, 198 (50%) respondents were single and 198 (50%) were married. 99 (25%) of respondents had enjoyed entrepreneurship for 1-5 years, 99 (25%) of the respondents had enjoyed entrepreneurship for 6-10 years, while 198 (50%) had enjoyed it for 10 years and above.

The ANOVA results presented in Table 6 show that H02 is rejected because computed F-value (21.601) is greater than critical-F (18.51). The significance (0.001) for F-Cal. = 21.601 is less than the significant level (0.05). The p-value is less than alpha, therefore, it is statistically significant. Thus, we reject the null hypothesis and conclude that there is a positive significant effect between youth requisite training and poverty reduction.

Conclusion
This study examined the impact of entrepreneurship on poverty reduction in Nigeria using the industrial layout, Emene, Enugu State in Nigeria. Data was collected through self-designed questionnaire having 20 items from a sample of 396 respondents. Correlation and regression analysis with 5% significance level was used to analyze data and test the hypotheses respectively. All the three variables tested-skill acquisition, youth requisite training, and creativity and innovations-were shown to have significant positive effect on poverty reduction (youth empowerment, job creation and wealth creation).

Based on the objectives and the findings of the research, the study concludes that there is a positive significant influence between entrepreneurship development (skill acquisition, youth training, and creativity and innovations) and poverty reduction (youth empowerment, job creation and wealth creation) in industrial layout, Emene, Enugu State, Nigeria. This suggests that without effective entrepreneurship many people could be put at risk of being unemployed, hence poverty will reign. However, there are problems facing the effective implementation of entrepreneurship programs in Nigeria such as corruption, inadequate funding of entrepreneurship, etc.

Recommendations: In line with the findings of the study, the following recommendations are made:

  • All the levels of the government should establish entrepreneurship training centers in the vicinity. This approach would help to instill entrepreneurship culture and promote human empowerment and development through entrepreneurial skill acquisition and training, thus reducing poverty in the society.
  • Government and private individuals should encourage entrepreneurial programs by massive awareness and sensitizing the populace, especially the youth, about the need to instill entrepreneurship culture as a way to overcome poverty in the society. This, no doubt, will encourage skill acquisition among youth and imbibe entrepreneurial traits in them.
  • The government should provide more infrastructure for entrepreneurial development and provide credit schemes, especially to the young artisans and youth in the society to encourage entrepreneurial development. This will encourage more creativity and innovation among the youth and thus lead to wealth creation in the society.
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Reference # 26J-2019-12-03-01