IMPACT OF SMALL SCALE FIRMS ON INDUSTRIAL DEVELOPMENT OF ENUGU STATE
From the title of this work, it will be seen that the work is geared towards finding out the impact of small scale firms on industrial development of Enugu Urban. The aim of the this study is to examine and identify in detail the problems, prospects effect and the importance of the development of small scale firms towards industrial development of Enugu Urban. This work has five chapters, with each chapter focusing in a specific objective. Chapter one tells us the history of small scale firms, chapter two examine other people’s work on small scale firms under these subheadings characteristics of small scale firms, availability of resource, the impacts or importance, financing the small scale firms, Government and its agencies, and so on. Chapter three examines the type of research design and methodology used by
the researcher. Chapter four, the researcher used two techniques of data analysis the percentages and chi-square at 0.05 level of significance. Chapter five summarizes the findings, making some conclusion and some recommendation as to how the problems of the small scale firms will be solved.
1.1 BACKGROUND OF THE STUDY
Development of firms has been a matter of great concern and priority to many nations of the world. It could be understood from economic history that many advanced countries of the world which has attained the height of industrialization started as a more small and medium scale enterprises which
later metamorphosed into giant cooperation. In the past, industrial development process were slow and painful and the advancement in technology in developed countries resulted from the survival of the cottage firms which were nurtured, pampered and breastfed to grow up as big industrial corporations today.
Since the early, 1990’s a number of initiatives have come to dominate the economic growth agenda of many donors and public agencies. These initiatives arose as a response to, or an interpretation of, the increasing effects of market globalization on the economies of developing countries. Analyses that only looked at domestic markets were no longer adequate to understanding the dynamics that affected the incomes and livelihoods of poor households almost anywhere in the world. With the increase in globalization, resource-driven comparative advent-age diminished in importance, while competitive advantage, created by private and public stakeholders, rises. And with its rise, the importance of theories that could help us understand and manipulate the dynamics affecting economic growth including competitiveness, value chain analysis, and economic cluster theory.
As a result of increased globalization and a shift in jobs from developed to developing economies ethical issues emerged. These were largely in response to labour and environmental concerns.
Since then, competitiveness initiatives, value chain analysis, and cluster development approach have proved to be quite effective at increasing micro, small and medium enterprises productivity and competitiveness into global markets, as well as national and local markets.
Developing countries as a whole have now realized that they lag much behind than the developed nations of the world, not only in industrial base but also in national standard of living. As a result, these countries now seem to have hastened up the pace of their industrial development process in other to increase their living standard and thus reduce the present rate of unemployment, (Klatt 1973).
Nigerian’s desire to concentrate on developing the small and medium scale enterprises (SME) have always been buttressed by and reflected in a wide range of economic policies. In-fact, the present consciousness on the part of the every segment of the society including the government for small
and medium scale industrial growth cannot be under emphasized and the delay in appreciating this sector as an economic catalyst is frustrating. (Ani B.N. and Nwandu E.C. 2001).
Yearly, government initiate policies that will not only help the development of small scale firms but also bring legislations for small and medium scale firms protection. Most government economic policies on imported goods have been targeted at discouraging such importation and protect the establishment, existence and survival of cottage firms. The essence of the protection is not to allow it face the competition posed by foreign goods in the market.
It is true that we are operating in a system where savings and investment are quite low; this is as a result of low capital base, mass unemployment and low per capital income. But government has not relented on its effort to ensure the success of small and medium scale firms. Tax holidays and tax concessions are many at times being offered by government to small and medium scale firms to enable them survive. Grants and loan facilities are another key ways of assisting small and medium scale (SME)
industries so that funds needed for current operations and investments may not be an impediment.
If critically viewed, more efforts of government were geared towards the establishment of industries which would provide employment to the teaming populations, provide earnings to the country through export profiles, enhance standard of living of the citizenry and in turn results to provisions of
infrastructural facilities. It is equally of important to note at this juncture that small and medium scale enterprises means different thing to different people, group, society and government hence.
1.2 STATEMENT OF PROBLEMS
The under-development of Nigerian economy is as a result of inadequate industries in Nigeria and manufacturing of the existing one’s owing to poor implementation, supervision and execution of government policies and programmes, subject to corruption and lack of appropriate machineries for later implementation.
The government (both at state and federal level) at various intervals have initiated policies measures to encourage the development of the small scale industries. Some of these policies included the operation feed the nation (OFN) of 1973, the Green Revolution of 1977, the National Directorate of Employment (NDE) of 1986 and others. All these geared towards assisting the firms technically, financially and managerially.
Given that industrial development has been so slowly generally in Nigeria, and that government has been doing something positive to increase the industrial base of the country; the researcher therefore is challenged to prove whether or not a small and medium firm will lead to quick industrial development in Enugu Urban and Nigeria in general.
The researcher will find out why most government industrialization and mobilization policies inaugurated in the past, failed to achieve grass root industrialization and mobilization among Nigerians and also how to address the problems of entrepreneurship facing small scale industries in Nigeria and Enugu State in particular.
1.3 RESEARCH QUESTIONS
The impact of small and medium scale enterprise towards industrial development have been a controversial issue owing to its significant to Nigerian economy. In view of this, the researcher intends to present the following questions.
(1) What are the factors militating against the growth and development of small and medium scale enterprises in Enugu Urban?
(2) Do Government and its agencies fund small scale firm adequately in relation to its promises and policies as to industrializing in Enugu Urban?
(3) Do government give financial assistance to small scale firms?
(4) Do good management contribute to the success of small scale firms in Enugu Urban?
(5) How much loan do government give to small scale firms?
(6) Do small and medium scale enterprises contribute in waste
management disposal and extended usage of by-product that may not have been useful without the existence of SME’s?
1.4 OBJECTIVES OF THE STUDY
This study intends to investigate various problems associated with establishment and growth of small and medium scale enterprises towards the development of industrialization in Enugu State. This research will attempt to
(1) To discover and determine the factors militating against the growth and development of scale and medium enterprises in Enugu Urban.
(2) To discover if government and its agencies fund small scale firms adequately in relation to its promises and policies as to industrializing in Enugu Urban.
(3) To find out if government render financial assistance to small scale firm in Enugu Urban.
(4) To find out if good management contribute to the success of small scale firms in Enugu Urban.
(5) To find out if government give loans to the small scale firms.
(6) To discover whether small and mediums scale enterprise contributes in waste management disposal and extended usage of by-product that
may not have been useful without the existence of SME’s.
1.5 STATEMENT OF HYPOTHESIS
The hypothesis to be tested against their alternatives will be formulated from the statement or problem to serve as an effective guide:
Ho Small and medium scale enterprises does not have any factor militating against its growth and development in Enugu State.
Hi Small and medium scale enterprises does have any factor militating against its growth and development in Enugu State.
Ho Small scale and medium enterprises does not have any effect to the development and growth of industrialization in Enugu State.
Hi Small scale and medium enterprises does have any effect to the development and growth of industrialization in Enugu State.
Ho Individuals does not have roles to play towards promoting government policy to achieve industrialization and stability in the economy of the state.
Hi Individuals have roles to play towards promoting government policy to achieve value chain of industrialization and stability in the economy of the state.
Ho Small and medium scale enterprises (SME) does not contribute in waste management disposal and extended usage of by-product that may not have been useful without the existence of small and medium
Hi Small and medium scale enterprises (SME) does contribute in waste management disposal and extended usage of by-product that may not have been useful without the existence of small and medium scale
Ho Government does not have any position towards assisting, promoting and stabilizing small and medium scale enterprises (SME) in other to unlock value chain approaches to our economic boom.
Hi Government does have any position towards assisting, promoting and stabilizing small and medium scale enterprises (SME) in other to unlock value chain approaches to our economic boom.
Ho Environmental factors does not have influence in the establishment, growth and stability of small scale enterprises (SME)
Hi Environmental factors does have influence in the establishment, growth and stability of small scale enterprises (SME)
1.6 SIGNIFICANCE OF THE STUDY
No matter the amount of resources committed in this study, its importance as to the resources imputed cannot be compared. This is true because it is a study that deals with rudiments and fundamentals of economic growth and stability. Its centered on business prosperity, which if achieved will reduce the personal problem of unemployment and poor standard of living. It deals with the production of goods and services, provision of necessary tools for infrastructural facilities and this helps to enhance
industrial development. It creates earning sources to the government and for the general administration. Above all,
1. This research will give an insight into the natural implications of existence of small and medium scale enterprises in Enugu Urban.
2. This research work will also assist researchers, scholars and future managers on the above subject matter.
3. This research work will expose any shortcomings that has been militating against the establishment, growth and development of industrialization in Enugu Urban
4. This research will expose opportunities that have not been exploited to intending investors and entrepreneurs in search of opportunities.
1.7 SCOPE AND LIMITATION OF THE STUDY
This research work has been limited to a reasonable researchable scope considering a lot of constraints during the time of the study. The study aims at identifying the problems and prospects of firm using selected small scale firms in Enugu as a case study.
A lot of problems are likely to be encountered during the process of putting this work together. These problems include:
(1) Finance: A lot of money is required at all stages of the study, as a civil servant, it is a big problem.
(2) Time constraint: As a civil servant, I have a limited time to put this work together due to other numerous engagements.