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THE EMPOWERING OF SMALL AND MEDIUM SCALE ENTERPRISES FOR SUSTAINABLE DEVELOPMENT A STUDY OF SMALL AND MEDIUM ENTERPRISES IN LAGOS

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ABSTRACT

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.   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. This study therefore seeks to address the following issues – 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 be 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.  Hostility  in an operating  environment  (by government,  or  communities) often make the efforts and expectation  of tile small and medium  scale enterprises unrealistic. Other problems in realizing the objectives of government’s empowerment to   small   and   medium   scale   enterprises   are    unregulated    competition    and inconsistencies in policies and programmes. The major data collection instrument to be use is the questionnaire.  It will be  structured  with a four point  likert scale to determine  responses to the objective  of the study.  At the end of the study it was observed that, resources available  for empowering SMEs in the Nigerian economy may not be considered adequate, that stringent regulatory controls of government on SM Es may affect their growth and development, that inability of SMEs to loans and other  financial  assistance  may  cause  their  failure,  that  absence  of  research  and development on the activities of SMEs may affect their growth and development. it was therefore recommendations that, every effort should be given to discourage the difficulties of access to funds set aside for SMEs by financial institutions or the direct loans occasionally extended to them by the government by way of empowerment for stainable development, regular training and retraining should be provided, for SMEs to reduce the perennial problems of inadequate managerial capacity and poor quality services and products. To this regard, facilities should be adequate for training and developing the human resources (managers) needed in translating business in the right question in an empowerment for stainable development.

CHAPTER ONE INTRODUCTION

1.1       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 exclusively held in place 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 business 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 scale 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 scale 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  scale  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 (1301).  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 scale enterprise in Nigeria.

The  said  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, trade marks and farm close), etc. Infact 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 I resources available.

1.2       STATEMENT OF THE PROBLEM

Empowering   small   and   medium   scale   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;

(i)        Difficulties of access to fund set aside for their use by financial institutions or the direct loans occasionally extended to them by the government.

(ii)       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.

(iii)      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.

(iv)      Hostility in an operating environment (by government, or communities) often make the efforts and expectation of tile small and medium scale  enterprises unrealistic.

(v)       There is also high cost of energy which is imported for use in manufacturing.

In other words, cost of installation and use of technology in small and medium

scale   enterprises   arc  not   affordable,   even  when   such   is  provided   by government, their maintenance costs are outrageous.

(vi)      Inspite  of  government   empowerment   to  most  small  and  medium   scale enterprises products, standards are not always in conformity with  local and international demands.

(vii)     Other problems in realizing the objectives of government’s empowerment to

small   and   medium   scale   enterprises   are   unregulated   competition   and inconsistencies in policies and programmes.

1.3       RESEARCH QUESTIONS

The following questions were formulated to guide this research,

(i)        Is there any significance relationship between government empowerment and growth of small and medium scale enterprises?

(ii)       Are  the  human  and  material  resources  required  for  executing  government policies (empowerment) to small and medium scale enterprises adequate?

(iii)      Could illiteracy or inaccurate information or knowledge about empowerment

of government to SMEs cause set backs to then capabilities in performance? (iv)      Are  the  factors  for  enabling  environment   to  small  and  medium   scale

enterprises mutually exclusive for their growth through empowerment?

(v)       What   are  the  effects   of  frequent   changes   in  government   policies   on empowering SMEs activities in an economy?

(vi)      Could  unregulated  competition  slow down or cause  waste  of resources  of small and medium scale enterprises even on empowerment?

(vii)     What  arc  the  impact  of  inadequate  technological  education  on  small  and medium scale enterprises on the development and growth of such businesses?

1.4       OBJECTIVES OF THE STUDY

The main objective of this study is to appraise the empowering of small and medium scale enterprises for sustainable  economic development specially selected SMEs in Lagos.

Other objectives of the study include;

           To determine the adequacy of science and technological facilities empowered to operators of small and medium scale enterprises.

           To identify the training facilities (including research) provided for small and medium scale enterprises in the form of empowerment.

           To assess strategies  built by government  through empowerment  in  meeting resources (finance and non-finance) requirement of small and  medium scale enterprises for sustainable economic development.

        To investigate how the variables of enabling environment could be optimally

combined  as empowerment  in meeting  expectations  of small and  medium scale enterprises.

           To identify control measures taken by government in an empowerment against wasteful competition by small and medium scale enterprises.

        To makes recommendation based on the findings of the study.

1.5       RESEARCH HYPOTHESES

Based  on  statement  of  the  problem  and  objectives  of  the  study,  the  following hypotheses are formulated;

Hypotheses I

Ho:      Empowering small and medium scale enterprises does not result to sustainable economic development and growth.

Hi:       Empowering  small  and  medium  scale  enterprises  results  to   sustainable economic development and growth.

Hypotheses 11

Ho:      The enabling environment  as empowered  by government  or her agents  for small and medium scale enterprises does not make them (SMEs) successful.

Hi:       The enabling environment  as empowered  by government  or her agents  for small and medium scale enterprises makes them (SMEs) successful.

Hypotheses III

Ho:      The adoptions and use of technological infrastructure as empowering tool does not  determine   the  profits   making  ability  of  small   and   medium   scale enterprises.

Hi:       The adoptions  and  use of technological  infrastructure  as empowering  tool determines the profits making ability of small and medium scale enterprises.

1.6       SIGNIFICANCE OF THE STUDY

The outcome of this research will be beneficial to the government, small and medium scale enterprises, management practitioners and academia.

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

1.9       DEFINITION OF OPERATIONAL TERMS

Certain concepts and variables to be use in this study need be defined for clarity and comprehension. However, those not defined under this chapter will be treated in the course of the study.

Terms for Definition include;

Small and medium scale enterprises: these are enterprises with small capital outlay and limited number of employees in its operations. They are private initiatives aimed at developing resources in small scale within an economy, and in the process earned sonic profits.

Government business empowerment:   this consists of the different provisions given by government or her agencies to businesses aimed at improving by empowering their production of goods and services.

Proficiency:  this  is  expertise  delivery  of  services  to  a  third  party.  It  could  be described as knowledge,  skills and behaviour needed for effective  performance.  In this  study,  it could  come from the government,  business  owner  to .each other or customers.

Performance: Manner and success in the execution of a work. It is a measure based on the expected results and standards.


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