Impacts Of Small Business Enterprises On Employment Creations

INTRODUCTION

1.0 BACKGROUND OF THE STUDY 

Small business enterprise plays a key role in expanding and diversifying industrial production and also contributes to such objectives as employment generation, poverty eradication, improved income distribution and fulfilling basic needs of most developing countries.

Small business enterprises was defined by the Central bank of Nigeria in it’s guideline that it is any business organization with an annual turnover of less than five hundred thousand naira. (CBN Guide (2002).

Small business enterprise may be seen as a business which is independently owned and managed and which does not dominate its relevant market segment of interest (Griffin and Ebert, 1999) Unemployment is undoubtedly a big challenge to any government, development planner the private sector and society at large. This is why it is very important to pay particular attention to the creation of employment because according to Tomori (1998), the consequence of unemployment (whether prolonged or short-term), leaves a scar on every individual, family or country that is faced with the problem.

In the first instance, the degree of frustration and poverty experienced by the unemployed person who is willing to work but cannot find a job is considerable. His or her frustration could be transformed into violence or crime, which in-turn whether collective or individual can shake up any political system and cause instability. Second, the loss of income to individuals and households is equally great; the under-utilization of labour resources create poses a difficult problem for society in terms of the wastage in manpower resources which may have probably been expensively trained. Small business enterprises have been favored as institutions that are capable of providing solutions to the high level of unemployment menacing the country. Small business enterprises is an independent business which is managed and which does not dominate its relevant market segment  of interest, managed by its owner or part owner and has a small market share (Bolton Report, 2006).

Today, the unemployment problem has eaten even deeper into fabrics of the Nigeria  society  and threatened her economic growth, much more than was bargained for and has left little to be desired indeed, the situation has deteriorated to the level  that graduates of higher institution spend  up to three to four years at home after graduation without any sign of “white-collar” jobs coming their ways, thus, it has been argued that people who lose their jobs or are prematurely relieved from active civil service, pensioners delinquent youths, unemployed graduates even suffers of HIV/AIDS, all of these groups, and many others, could solve their problems of unemployment by starting a business of their own in the small business enterprises (SBEs).

Small business enterprises believed to be the engine room for the development of any economy because they form the bulk of business activities in a growing economy like that of Lagos State. This is manifested in the following ways.   

1.  Employment generation capacity of about fifty percentage of global working population

2.  Small business enterprises constitute major avenues for income generation and participation in economic activities in the lower income and developing societies.    

3.  National economic development prospects hangs on entrepreneurial energy of vibrant small business as most big business concern grew from small scale to become big icons.

4.  As they grow they protect nations from the geographical cost benefit permutations of a few multinational who are ever prepared to close up their business and relocate at the slightest provocation or appearance of economic downturn.

1.1   STATEMENT OF THE PROBLEM                                       

For any economy to be developed, people must be prepared to place their money or resources on short-term and long term investment and bear business risks.  In Nigeria, there was lack of authentic up to date information on the role played by small Business Enterprises towards economic growth and development and most especially through creation of job opportunities for the people (AJALA E.M 1999)

The irregular government policies, poor financial aid and poor infrastructural problems that ginger the cost of production, make the   small business enterprises to be baffling with survival rather than creation of employment as expected. As a result the researcher intends to find out at what rate has SBEs in Nigeria create employment.