Impact Of Small And Medium Enterprises On Economic Development
(A Case Study Of Some Selected Smes In Owerri)
Small and Medium Enterprises (SMEs) play a crucial role in fostering economic development across diverse sectors. These enterprises, often hailed as the backbone of the economy, contribute significantly to job creation, innovation, and fostering entrepreneurial spirit. Small and Medium Enterprises serve as dynamic engines driving economic growth, particularly in developing nations. By enhancing employment opportunities, Small and Medium Enterprises contribute to poverty alleviation and social stability. Moreover, their agility and adaptability enable them to respond effectively to market demands, fostering competitiveness and resilience. Small and Medium Enterprises also serve as incubators for innovation, injecting new ideas into the economic landscape. As these enterprises flourish, they contribute to the development of a robust business ecosystem, creating synergies that amplify their positive impact on economic growth.
This study, the impact of small and medium scale enterprises on economic development in Nigeria (a study of some selected SMEs in Owerri) as information is the life wire of any business organization, so in human resources planning, the blood of any organization. The study used survey design method, the population of study consists of 200 staff of the selected organization (a study of some selected SMEs in Owerri) and Yaro Yamen formula was used to determine the sample size both primary and secondary sources of data were used which resulted to fourteen (14) questionnaires and the research questions were analyzed with simple percentage and frequency table. The major finding was that proper human resources planning play, a vital role in the growth of every organization. It was concluded that every organization must meet up with their manpower planning in other to efficiently and effectively achieve its goals and objectives it was recommended that organization, should attach great motivations to their employees to enable them achieve corporate objectives.
Title Page
Approval Page
Dedication
Acknowledgment
Abstract
Table of Contents
CHAPTER ONE
1.0 Introduction
1.1 Background of the study
1.2 Statement of the problem
1.3 Objectives of the study
1.4 Research questions
1.5 Significance of the study
1.6 Scope of the study
1.7 Limitations of the study
1.8 Definition of terms
CHAPTER TWO
2.0 Literature Review
2.1 Introduction
2.2 Structure of small scale industries
2.3 Sources of fund available to small scale industries
2.4 Problems affecting small scale industries finance
2.5 Technical know-how
2.6 Inadequate infrastructure facilities
2.7 Lack of raw material
2.8 Poor accounting system
2.9 Impact / contribution of small scale industries in Nigeria
2.10 Government policies
2.11 Summary of related literature reviewed
CHAPTER THREE
3.0 Research methodology
3.1 Introduction
3.2 Research design and method use
3.3 Sources / Method of data collection
3.4 Population and sample size
3.5 Sampling techniques
3.6 Validity and reliability of measuring instrument
3.7 Method of data analysis
CHAPTER FOUR
4.0 Presentation and analysis of data
4.1 Introduction
4.2 Presentation of data
4.3 Analysis of data
4.4 Interpretation of data
CHAPTER FIVE
5.0 Summary of findings, Conclusion and
Recommendations
5.1 Summary of findings
5.2 Conclusion
5.3 Recommendations
Bibliography
Appendices
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
After about a decade and a half, the adopting an industrialization strategy based on large scale industries mostly of the assembly type, Nigeria has achieved only a fragile industrial development. A little after independence, some small scale industries could not really continue to exist let along flourish due to the fact that they were either swallowed up by the larger one or by foreign firm. The large scale industries which were set up tended it be capital intensive which were set up traded to the capital intensive and inappropriate given the country’s resource endowment their capital equipment and technical manpower has continued to be largely imported. As a result, the triple objective of salting up the plant achieved up it 20 percent in local raw material sourcing, instead they are more or less systematic foreign exchange puzzlers with neither the will nor the capacity. A transfer any meaningful technology beyond the primitive type. What is small scale industry?
There are so many definitions of small scale enterprise as these are on the subject.
1. The Nigerian industrial policy describes small scale firms as those with total investment of between N100,000 and N2million, with other exclusion of land and capital.
2. It also defines micro-coverage industries as those whose total investment cost does not succeed N100,000 including working capital but excluding land.
3. For the purpose of this project, a small scale industry is defined as a sole proprietorship business whose size would not allow for elaborate administrative structure. The span of such firms is usually short and concentrated in the hands of one or a few persons.
4. Small scale industries constitute over 70 percent of all registered companies. Thus, it encourage could provide opportunity for employment on a larger scale and make the possibility of adequate distribution of national income more realistic Abilola the intention of the research work was therefore to examine the contribution of impact of small and medium enterprise on the economics development of Nigeria.
1.2 STATEMENT OF THE PROBLEMS
It was not until the Hawthorn experiment that the importance of impact of small scale industries was discover yet small scale industries has it continued to occupy much of the resources in order to create opportunities in the country for the betterment of the youth and also attention and time that is why most organization are yet to back-up their frequency espoused belief that small scale industries are most important assets. it is recognized that the reason why most of our organization cannot compete effectively in the market as due to ineffective management of small and medium enterprises in Nigeria. It is surprising nowadays now the management of some of organization have started handling with superb efficiency issues of non-human resources who as raw materials technology, its modernization with little or no attention to the issues of human resources and their former cannot function effectively without the later. Uncle Joe Bakery Industry Limited etc are nothing without than producing or employing people or go on strike the society will then know their importance of the small scale industries or their importance become clearer.
1.3 OBJECTIVE OF THE STUDY
The goals and objective of any organization cannot be attained without adequate management of small and medium enterprises very well and who will mobilize other factors to yield the desired goal. The effective services and it cannot attain these goals without managing its small scale industry effectively. The purpose of the research is to unveil the need for small scale industry in the achievement of organization industry in the achievement of organization goals and objectives with particular reference to Uncle Joe Bakery Industry Limited.
However, the specific objectives of the research are:
1. To look into the acquisition of the small and medium enterprises in Nigeria.
2. The study intends to analyze the impacts contribution of small scale industries in the economic development of Nigeria.
3. To make policy statement that will assist small scale industries in their growth and development.
4. The general objective of the study is to get an insight into the nature and scope of small scale industries in Nigeria.
1.4 RESEARCH QUESTIONS
In the course of the study, the researcher will investigate on the following research questions:
1. How small and medium enterprise planning are carried out?
2. What is the nature and scope of small scale industries sin Nigeria?
3. What are the sources of fund available to small scale industries in Nigeria?
4. Are there problems militating against the growth and development of small scale industries in Nigeria?
5. Do small scale industries make any contribution on Nigeria quest for economic development?
6. Are there things to be done to assist in the sustenance of small scale industries in Nigeria?
1.5 SIGNIFICANCE OF THE STUDY
This has to do with importance and usefulness of the study as well as its impact on the different segment of the Nigeria society. This is the researcher believes that the study will be useful in the following ways:
1. Both government and student in the field of business administration and management as this will go a long way in enabling management of these small scale businesses.
2. Researchers on small scale industries, it will act as a stepping stone for their work in the field.
3. Operators of small scale industries especially those in the banking industry will find the work very useful in their bid to achieve a sustainable growth and extension in the life of their enterprises.
4. This study is importance for the fact the small scale industries are growing at an alarming rate and the need to perfect it through marketing research which is important for both product and services industries.
5. The study will do a long way towards the reduction of, in unemployment.
6. With small scale industries, no place, no doubt the consumers will be offered a variety of choice products.
1.6 SCOPE OF THE STUDY
The scope of this work covers both the Uncle Joe Bakery Industries Nigeria Limited.
The scope of this study mainly focuses on the role of small scale industries, how it will enhance the economic development in Nigeria and the problem affecting their growth and possible ways and suggestions to solve the identified problems. This findings and conclusion will go a long way in enhancing the management of Uncle Joe Bakery Industry Limited and all other related small scale industry in Nigeria particularly in Owerri.
1.7 LIMITATIONS OF THE STUDY
Despite the limited, scope of this study certain constants were encourage during the duration of the project some of the constraints experience by the researcher is given below:
1. Lack of Managerial Experience: The entrepreneur may lack knowledge in the management of these resources e.g. man, money, material and machinery.
2. Wrong Business Decisions: This is when entrepreneur does not know how to run the enterprise and so make wrong decisions which might lead of failure. In other works one does not have these skills and competence. This is usually very risky and many of our small scale industries have folded up because of these reasons.
3. Financial Problem: good business has its strength from money. In the course of running a business, one falls short of money. The result if winding up and of course when a businessman or woman does not have enough cash she may be able to operate successfully.
4. Fraudulent Activities: This result when employees indulge themselves in fraud lie cheats on customers or stead money from the business. If this is not quickly elected and nipped in the bud. It could lead to the collapse of the business. Although these problems placed limitation on the study, but it did not prevent this research from carrying out defiled and comprehensive researcher work on the subject matters.
1.8 DEFINITION OF TERMS
Small and Medium Enterprises: Is a business that maintains revenues or a number of employees below a certain standard.
Economic Development: Economic development refers to the adoption of new technologies, transition from agriculture based on industry – based economy and general improvements in living standards.
mall and Medium Enterprises (SMEs) play a crucial role in driving economic development and growth in many countries around the world. Their impact is multifaceted and extends across various dimensions of the economy. Here are some of the ways Small and Medium Enterprises contribute to economic development:
- Employment Generation: Small and Medium Enterprises are significant contributors to employment. They often provide a large portion of jobs in economies, especially in sectors with low barriers to entry. As SMEs grow and expand, they create more employment opportunities, which helps reduce unemployment rates and improve the overall standard of living.
- Innovation and Entrepreneurship: Small and Medium Enterprises are known for their agility and ability to innovate. They often serve as incubators for new ideas, technologies, and business models. Their flexibility allows them to adapt to changing market demands quickly and experiment with new products and services. This innovation drives economic growth by enhancing productivity and competitiveness.
- Local and Regional Development: Small and Medium Enterprises tend to be rooted in local communities and regions. Their growth contributes to the development of these areas by attracting investment, generating local income, and fostering a sense of community. This can lead to the development of supporting industries and infrastructure.
- Export and Trade: Small and Medium Enterprises can serve as vital players in export-oriented economies. Their products and services, especially in niche markets, can contribute significantly to a country’s export earnings. As they expand and gain recognition, SMEs can help diversify a country’s export basket and reduce dependence on a few key industries.
- Rural and Urban Balance: Small and Medium Enterprises often operate outside major urban centers, which can help balance economic development between urban and rural areas. Their presence in rural regions can provide employment opportunities and prevent excessive migration to cities, thereby reducing urban overcrowding and related issues.
- Increased Competition: Small and Medium Enterprises introduce healthy competition in the market. Their presence prevents monopolies or oligopolies from dominating industries, which can lead to higher prices and decreased innovation. Competition from SMEs encourages larger corporations to remain efficient and customer-focused.
- Skill Development and Training: Small and Medium Enterprises often hire a diverse workforce and provide training opportunities for employees. This helps enhance the skill set of the labor force, making it more adaptable to changing market conditions. These skills can also lead to higher employability and income potential for workers.
- Contribution to GDP: The collective economic output of SMEs can make a substantial contribution to a country’s Gross Domestic Product (GDP). Their combined value-added activities, from manufacturing to services, add up to a significant portion of national economic output.
- Financial Inclusion: Small and Medium Enterprises, especially in developing economies, can facilitate financial inclusion by creating opportunities for individuals and communities to participate in the formal economy. They often provide avenues for entrepreneurs to access credit, which can drive personal and local economic development.
- Social Development: Small and Medium Enterprises can have positive social impacts by engaging in socially responsible practices, supporting local charities, and promoting community development initiatives. This can lead to improved overall well-being and a stronger sense of social cohesion.
In conclusion, the impact of Small and Medium Enterprises on economic development is substantial and far-reaching. Their contributions to job creation, innovation, regional development, export, and more make them indispensable drivers of sustainable economic growth in both developed and developing economies