CHAPTER ONE
INTRODUCTION
- BACKGROUND OF THE STUDY
There is no doubt that small and medium scale enterprises constitute the real fabric of a nation‘s economy. Ever since the country‘s (Political) independence, this has been so, and even today the entire economic system is largely together by small and medium scale enterprises, Owualah (1998:8). However, the environment in which this sector operates is both challenging and rewarding. The fact that SMEs forms the engine for industrial growth and development in the economy recommends efforts that could make them strive.
By definition, Small and Medium Scale enterprises are businesses with investments in fixed assets (excluding land) of not more than #10 m (Ten Million Naira). There are several other criteria by different authors and scholars to describing Small Medium Scale enterprises. A significant aspect of small and medium scale enterprises is in the following developing areas, creation of employment, stimulation of indigenous entrepreneurship, transformation of traditional industry, linkage effort, contribution to regional activities or cooperation, utilization and multinationalisation of indigenous enterprises. To Adewolu (2005:43) small and medium enterprises are activities undertaken by a person or group of persons for the provision of goods and services to meet the present and future needs of third parties at a price and for a profit through the management of available resources. To him, small and medium scale enterprises could be found in the following areas; marketing of goods, provision of services, manufacturing of goods/products, cultivation of land and dissemination of information/knowledge. On the strength that small and medium enterprises are formed on the basis of partnership between owner(s) and the providers of conducive environment (i.e. the government), suggests that encouragements and assistance (i.e. empowerment) are usually expected from the government and her agents.
To Balogun (2004:22) some of the empowering factors from government to SMEs include; electricity, transportation, communication, water supply, financial infrastructure and educational facilities among others. Thus, government, agencies, corporate organizations, international sponsors, etc are expected to adequately provide or empower SMEs for sustainable economic (activities that guarantees) development and growth. Trade policies and barriers are other critical areas to which government empowerment are needed for small and medium scale enterprises to effectively and efficiently accelerate or sustain the economy. To Daniju (2007:54) finance and skills acquisition which cut across all ages forms the key to empowerment of small and medium enterprises. A typical empowerment banks initiative to small and medium scale enterprise is the small and medium scale industry equity investment scheme (SMIEIS) and bank of industry (BOI). Similarly the National Economic empowerment and development strategy (NEEDS) by the federal government addes as path of sustainable economic growth and development for small and medium enterprise in Nigeria.
The NEEDS initiatives were borrowed from the programmes of the new partnership for African Development (NEPAD) in African Union. The government through NEEDS is a facilitator, providing the enabling environment for a free-maker system. Other areas of special empowerment of small and medium scale enterprises are; research institutions provision of industrial estate, protective benefit laws (i.e patents, copy right, trademarks and farm close), etc. In fact from forgoing analysis it could be understood that empowering small and medium scale enterprises as given by government and institutions is favourable as it reflects all sector of the economy, hence even or sustainable economic growth. A more result oriented step about developing small and medium scale enterprises in Nigeria is the focus on initiating and practicing courses on small and medium scale enterprises in the educational systems (at all levels) in Nigeria. This step is capable of expanding the entrepreneurship and the production of goods and services in the economy. It is strongly believe that if business owner(s) could respond according to the various empowerments, small and medium scale enterprise will continue to occupy their pride of their place as ―bedrock‖ for national development and growth. Moreso, it need be emphasize here that empowerment of small medium scale enterprises and their operations are limited to market forces, information and knowledge available to operators, technological innovations, international standards and financial resources
1.2 STATEMENT OF THE PROBLEM
Empowering small and medium enterprises for sustainable economic development could have been very much appreciated and practiced if not for certain deficiencies, hence the need to tackle the following problem areas:
Businesses owners often times fall short of the required information and knowledge, as to when, where and to whom to refer to in time of empowerment in their businesses. Small and medium scale enterprises report show that failure usually result from their inability at identifying accurate and reliable marketing, financial and information technology facilities available in their operating environment(s).
Other reasons for small and medium scale enterprises not developing and growing in empowerment includes;
Difficulties of access to fund set aside for their use by financial institutions or the direct loans occasionally extended to them by the government,
There are also the perennial problems of inadequate managerial capacity and poor quality services and products. To this regard, facilities could be absent or inadequate for training and developing the human resources (managers) needed in translating government empowerment into their business in the right quantum, Thus a business dominated by inexperienced and unskilled manpower has limits to application of government‘s empowerment to their businesses,
The enabling environment by government to small and medium scale enterprises are not always complete in any particular empowerment. In other words, transport and electricity may he available while water, communication, educational infrastructure, etc may not be available or inadequate. Thus, no environments are comprehensive or complete in any small and medium scale industry.
- OBJECTIVES OF THE STUDY
The broader objectives of this study is to appraise the relationship between small and medium Enterprises and sustainable Economic Development
The Specific Objectives are to
- Determine how training facilities provides empower SME operators.
- Ascertain how the adoption and use of technological infrastructure to determine the profit making ability of SMES.
- Assess how frequent policy changes affect the performance of SMEs.
- RESEARCH QUESTIONS
- How do training facilities empower SME operators for sustainable economic development.
- To what extent do the adoption and use of technological infrastructure determine the profit making ability of SMEs for sustainable economic development.
- How do frequent policy changes affect the performance of SMEs for sustainable economic development
1.5 RESEARCH HYPOTHESES
Based on statement of the problem and objectives of the study, the following hypotheses are formulated;
Hypotheses I
Hi: Science and technological facilities do not significantly empower operators of SME for sustainable development and growth.
Hypotheses 11
Hi: Training facilities do not significantly provide empowerment for SME for sustainable economic development.
Hypotheses III
Hi: The frequent changes in government policies does not significantly affect the performance of SMEs for sustainable economic development.
- SIGNIFICANCE OF THE STUDY
To determine those who will benefit from the study and how they will benefit from it.
The outcome of this research will be beneficial to the government, small and medium scale enterprises (in terms of meeting with environmental challenges adoption and application if reliable) management practitioners (because it will expose them to recent development in SME) and academia (it will serve as secondary source of data for structure).
To the government, this study will immensely assist her to plan and develop the sectors of an economy through empowerment and regulatory controls given to the small and medium scale enterprises. In other words, Government could be adequately positioned to optimally expend her resources and gain revenue through policies and programmes initiated and executed in small and medium scale enterprises. Occasionally, government benefits in a way of revenue generating through imports and exports by small and medium scale enterprises.
To small and medium scale industries, they are empowered through this research to learn new skill/capabilities by adjusting to the trends towards the development and growth of their businesses and the economy. In other words, the small and medium scale enterprises could develop and grow in marketing, production of goods and services, agriculture, science and technology, finance and information. Through this study, small and medium scale enterprises could begin to do things, which ordinarily they could not do. Training and development of work force of SMEs arc enhanced. This study also is capable of correcting certain anomalies likely to come up following efforts of small and medium scale enterprises for development and growth. Thus, strength and weaknesses, opportunities and threats are discovered and used for the advantage of developing and improving small and medium scale enterprises.
To management practitioners, this study will make them keep abreast o[ new developments and techniques in the practice of empowering the development and growth of small and medium scale enterprises for sustainable economy. In this process, they could serve their clients better and efficiently.
To the academics, this study will form basis for further studies and sustains an existing knowledge on the subject matter.
1.7 LIMITATIONS OF THE STUDY
The research may encounter lots of problems in the course of collecting data and other relevant records. Getting the respondents to agree to interview may be difficult. Infact, their claims may be that releasing certain facts and figure could mean organizational ―sale out‖ .In other words; their releasing some information could be against the customer, ethics and norms of their organizations and government. Similarly, inadequate financial provisions for the study may hinder the rate of progress for the research. Yet another constraint may be the short period of time within which to complete this project. These shortcomings not withstanding, sufficient data may be collected and use for generalization.
1.8 SCOPE OF THE STUDY
This study will be focused on the appraisal of the empowering of small and medium scale enterprises for sustainable economic development specially selected SMEs in Lagos It will involves a discussion on all aspects of the economy or businesses conducted by the small and medium scale enterprises. The study will cover selected government agencies charged with carrying on empowerment of SMEs, in Lagos and selected institutions of higher learning around Lagos