CHAPTER ONE

1.0 INTRODUCTION
1.1 BACKGROUND OF THE STUDY
The small scale industries (SSIs) form the bedrock of the economic
growth in every nation. No country achieves a viable economic growth
and development without the establishment of small scale business firms.
They have always been in the forefront of development strategies.
Nigerias uest for development must be hinged on industriali!ation. This
is because of the great role industries play in terms of production
activities" employment generation and the overall improvement in the
uality of life.
Small scale industries are seen as veritable instruments for the industrial
development of a nation. Industrial development involves the
development of a technical arrangement that moves an economy from
traditional method of production to a more comple# system of mass
manufacture of variety of goods and services involving technology and
management techniues ($nyanwu" %. &. '(()).
Industriali!ation propels growth and uickens the achievement of
structural transformation and diversification of economies. It enables a
)
country to utili!e fully its factor endowments and depend less on the
e#ternal sector for its" growth and sustenance.
*eyene ('((') avers that SSIs have been important economic catalysts in
the industriali!ed countries. The industry provides employment and
earning opportunities" which contribute to economic growth and increase
in the standard of living of the populace. +avis et al (),,-) views small
scale industries as the engine of development strategies in the promotion
of economic growth and development. The Nigerian industrial promotion
council" NI.%" confirms this by stating that /the $dvent of small and
medium scale enterprises in Nigeria was necessitated by the need to
stimulate the establishment and growth of industries in order to launch the
countrys industrial development. Small scale industries perform vital
roles in economic development of any nation. They are the bedrock upon
which industrial development could be achieved. This is because SSIs
promote stable industrial base and ensure a balanced distribution of
industrial development of any nation.
$nyanwu ('(()) sees the failure of part industrial policies" which were
anchored on the establishment of large industries" the fle#ibility"
adaptability and regenerative tendencies as SSIs to propel economic
development and the fact that growing and dynamic small businesses
'
elsewhere have grown into large ones and have contributed substantially
to national development ob0ectives as the reasons for adopting small scale
industries as a strategy for industrial development. 1reat *ritain and
2apan" owe their early industrial and economic e#pansion to their broad
based small business establishment (30o $ T" '((-).
The establishment of large industries involves heavy outlays and is
essentially capital intensive" which does very little in solving
unemployment problems. It also reuires that manufacturing industries be
designed and set up by foreign producers who also supply most of the raw
materials and machinery spare parts needed for an uninterrupted
production of industrial output. %onseuently" foreign e#change
reuirements by local producers become critical and the inability to
produce such foreign e#change can lead to 4severe disruption in the
production activities. Thus" it behooves developing countries to devote
vigorous energy to the development of local manufacturing industries. To
obtain economic self reliance and sufficiency" Nigeria needs to pursue
small scale industries as a strategy for growth and development. 1iven the
paramount role of SSIs to the growth and development of the country" it
becomes imperative to assess their contribution to the development of
Imo State" the /5astern heart land6.
7
1.2 STATEMENT OF THE PROBLEM
The problem of unemployment in Nigeria has become a dilapidating and
problematic issue in Nigeria. The problem does not only affect the life of
the people but facilitate the downfall of the economy. The problem of this
study also involves the shortcoming and inability of the government to
create employment through the generation and supporting of small8scale
industries. These problems have 0ustified the fact that the small scale
industries sub sector is now characteri!ed by low productivity and high
rate of business failure. The sector bears most of the brunt of the e#isting
gap in the Nigeria management system. +espite the vital role of small
scale industries play in economic development" their impact is not
adeuately assessed. $n adeuate assessment of their contribution to the
economy would be a yardstick to ease their procurement of finance.
This pro0ect seeks to determine the contribution of small scale industries
to employment creation in Imo State specifically and" by e#tension" to
Nigeria. It also determines how small scale industries have enhanced the
revenue base of the state through the income generated from ta#es paid by
them and assesses the e#tent to which SSIs) have contributed to the
development of the state.
9
1.3 OBJECTIVE OF THE STUDY
The main ob0ective of this study is to assess the contribution of small
scale industries to the development of Imo State. :ithin this framework"
the study seeks specifically to determine the e#tent to which small scale
industries have provided 0ob opportunities on state to identify the various
ways small scale industries generated needed development in the state and
to uncover the fundamental problems that confront small scale industries
in their effort to develop the state.
1.4 RESEARCH QUESTION
In the course of the research" the following research uestions were
answered" thus;
). %an small scale industries solve the problem of unemployment in
Imo State<
'. Should the Nigerian populace especially the youth be encouraged to
develop and sustain entrepreneurial spirit<
7. %an small scale industries contribute to economic development of
Nigeria<
9. +oes a relationship e#ist between unemployment problem and
economic growth and development<
=. %an small scale industry reduce the risk of unemployment<
=
-. >as the employment provision resulting from the establishment of
small scale actually affect the standard of living of the people<
1.5 RESEARCH HYPOTHESIS.
$ hypothesis is a proposition that is stated in testable form and prediction
of particular relationship between two or more variables. In the course of
this research effort" the hypotheses stated below were tested. Thus
H!"#$%&'& I
>
(
?

There is no significant relationship between small8scale industries
and the resolution of unemployment problem in Imo State
>
)
? There is significant relationship between small8scale industries and
the resolution of unemployment problem in Imo State.
1.( SIGNIFICANCE OF THE STUDY
3wing to the problems that unemployment has caused to the life of the
people and the nation" this study will be of great importance" in the sense
that it?
). 5nlighten the masses to harness their creative nature by establishing
small scale industries in order to get themselves employed.
-
'. :ill be an eye opener to the government to recogni!e their failures
in contributing their own uota in the aspect of improving and
encouraging small @ scale industries within the nation.
7. :ill unveil the effect of unemployment to the Nigeria economic"
pinpointing the fact that the issue of unemployment in Nigeria have
coursed more harm than good.
9. it also provide possible solution to the problem of unemployment
and the creation of small
=. It will act as a reference work for future researchers who in one way
or the other will be propelled to investigate into the concept of
small scale industries and its relation to employment generation.
1.) SCOPE OF THE STUDY
Asing small scale industries to solve the problem of unemployment in
Imo State was the 0urisdiction of this study with a ma0or focus on $boh
&baise local government of Imo State. 3ther areas of focus by the study
are critical e#amination of the role of small scale industries on national
economic development of Nigeria. .roblems of small scale industries in
Imo state" history of small scale industries in Imo State among others.
B
1.* LIMITATION OF THE STUDY
There were a lot of constraints in the gathering of information for this
research work? the ma0or constraints are as follows?
T'+%?
In respect to the theoretical and practical work" the time allowed for this
pro0ect was limited
F',-,.%?
+ue to problem of financing" and high transport rate" I could not meet up
with all the intended interviews and research ventures as I intended to.
1./ DEFINITION OF TERMS
S+-00 1S.-0% I,23&#4? Cichard Dlora 1ustafson" demand media
('()') defined small8scale business or industry as a business that
employs a small number of workers and does not have a high
volume of sales. In pre8colonial Nigeria" according to 50iofor .. it is
a relative turn" because what is regarded as small scale industry by a
person means large scale business to another.
U,%+!0"+%,#? this is defined by *ureau of Eabour statistics
(*ES) as people who do not have a 0ob" have actively looked for
work in the past four weeks" and are currently available for work.
F
$lso people who were temporarily laid off and waiting to be called
back to that 0ob are included in the unemployment.
I,23&#4'-0'5-#'",? This is the social and economic change that
transforms a human group from an agrarian society into an
industrial one
,
CHAPTER T6O
2.0 LITERATURE REVIE6
2.1 REVIE6 OF THE RELATED LITERATURE
.overty" unemployment and high crime rate in Nigeria have been of great
concern to the various governments (federal" state and local) as well as the
civil society. The decreasing human development indicators a well as low
level of productivity in all sectors of the economy represent disturbing
indices and also contribute to the dismal performance of Nigerian small8
scale industries.
The attainment of millennium +evelopment goals (&+1s) to a large
e#tent is contingent on how the various tiers of government vigorously
pursue the development of SSIs sub8sector. The &+1s e.g like halving
the proportion of people living in e#treme poverty" reducing maternal and
infant mortality and increasing level of literacy by '()= may become a
mirage without a virle SSI sub8sector. $ccording to Dagge ('((9)" both
the world @ bank and the international Eabour organi!ation observed the
role and trend of unemployment in Nigeria. Anemployment gap is
widened by the industrial collapse and poor performance of agricultural
sector over the years.
)(
+evelopment e#perts have identified corruption and neglect of the
strategic role of small and medium enterprises as some factors responsible
for underdevelopment. 1iven the vital contribution which SSIs play in
developed and developing economies and considering the on going
reforms by the government of Nigeria" which are primarily aimed at
creating wealth" reducing poverty" generating employment" re8orientating
values" and stimulating real economic growth" it becomes compelling for
the SSI sub8sector to be revitali!ed toward playing its e#pected roles. The
SSI remains a veritable vehicle for the tr9ansofrmation of Nigerian
economy and solving the problem of unemployment. Dor the governments
to reali!e the lofty ob0ectives of the development programmes" the SSI
sub8sector has to be thoroughly revamped and focused. This is one of the
ways that the government can be sure of reali!ing the ob0ectives of the
well8intended economic reforms and move the economy forward for the
benefits of all stakeholders" particularly the impoverished masses.
The economic growth and prosperity of Nigeria lies in the dynamism and
growth of small to medium and large scale enterprises.
The small business industry reuires a deep reflection and repositioning in
order to confront the challenges facing the Nigerian economy both
internally and e#ternally.
))
Internally" the continued instability in the value of the Naira" the high
level of inflation" the liuidity suee!e" the high interest rates" the high
level of unemployment" the falling standard of living and the general state
of economic depreciation are a source of concern. These challenges in the
domestic economy relate to the reuirements of survival" particularly in
short8term" which could only be meet mainly through the instrumentality
of small and medium scale enterprises" given their general acknowledged
low capital and labour ratio and greater susceptibility to indigenous
technology. 5#ternally" the momentous and fundamental economic and
political changes in the international environment call for a potentials of
the Nigerian economy" since the international economy is no longer
divided along ideological lines" but between the rich and poor countries"
between the technological backward and the advanced" between countries
of the North and those of the south" it is only pertinent for developing
countries like Nigeria and state like Imo State. This Nigeria must be ready
to increase her e#ports of manufactured goods to the 5urope and the
North. This should reflect intensive use of locally available businesses.
This is where small scale industries became particularly relevant and
critical. The advent of SSIs in Nigeria was necessitated by the need to
stimulate the establishment and growth of industries in order to launch the
)'
countrys industrial development. SSIs play critical roles as the main
engine of growth and in ma0or factor in promoting private sector
development and partnership. SSIs are indeed the bases that provide the
necessary impetus for the transformation of most industriali!ed
economies.
>ence" the rapid growth of SSEs is of crucial importance.
The small scale industry is a relative heterogeneous concept. :hat is
small in an industrial country like the Anited states may not be considered
small in an $frican country like *urkina Daso. :hat is small in the
manufacturing sector may not be small in the retail trade sector. SSIs have
been defined differently from one country to another based on differences
in the levels of economic development.
3yelaran @ 3yerinka et al ('((B) posits that it is possible to define SSIs
using many different indicators and parameters. Turnham" + (),,B) said
that financiers might be inclined to use the value of fi#ed assets or
turnover as parameters when defining SSIs. 3n the other hand" labour
officers are more likely to take into consideration the level of employment
that would be recorded through the operation of SSEs" while traders and
salesmen are virtually concerned with the sales volume" profit margin etc.
This" in essence" shows that no common yardstick is internationally
)7
accepted for measuring the si!e of enterprises. There is no globally
accepted definition of SSI since each country tends to give its own
meaning in accordance with the prevailing economic conditions in the
country.
The National council of industries defined small scale industry as an
industry with total capital employed (total investment of more than N)"
=(("((( including working capital but e#cluding cost of land" but not
more than N=(.(((" (( and a labour si!e of not more than )(( workers.
CLASSIFICATION OF BUSINESS ENTERPRISES BY CAPITAL
EMPLOYED AND LABOUR SI7E EMPLOYED
5nterprise assets
range
Small scale &edium scale Earge scale
Total investment
Galue(N) of
working capital
land e#cluding
land asset
N).m to N).=m N=(m to N)((m N)(("(((m
Eabour force
si!e
'8''( =(8)(( )(( # above
)9
Small business firms have contributed immensely and in diverse ways to
the growth of the nations economy. The contribution" as Nnanna ('((7)
observed" include innovation and fle#ibility" 5mployment creation"
promotion of 5ven development and reduction of income disparities"
output e#pansion" production of intermediate goods" increase in revenue
of intermediate goods" increase in revenue base of government"
transformation of indigenous technology" utili!ation of local resources"
contribution to consumer interest" keeping larger firms competitive"
maintaining close relationship with consumers and community" providing
a comprehensive learning e#perience" developing risk takers and
contributing to the balance of payment.
The contributions to economic growth of the nation notwithstanding" SSIs
have common problems in all countries and perhaps the most basic
problem is the lack of adeuate capital and credit facilities for sustaining
their growth and development. %redit" no doubt" is a critical input for
industries in general but more so" in the case of SSIs" which have a weak
capital base. 3ther difficulties SSIs encounter as noted by Turnham +
(),,B)" Shinder" E ('((B) and *eyene ('((') are lack of institutional
credit" poor management" >igh rate of business failure" low productivity
structural problem" poor accounting standard" shortage of skilled labour"
)=
indiscipline" $version to disclosure of information" Cestricted $ccess to
institutional credit" illiteracy" 5#cessive overhead and operating costs" non
conductive regulatory and operational environment" inadeuate fiscal
incentive framework" difficulties in disposing of SSIs finished goods"
inadeuate access to new euipment and production technology and
deteriorating macroeconomic environment.
2.2 THE ROLE OF SMALL8SCALE INDUSTRIES IN THE
ECONOMIC DEVLEOPMENT OF NIG
In the world of 3nugu ('((=)" small business enterprise or industry
constitutes a vital engine in economic growth and development in Nigeria"
small8scale industries are the principal catalysts of entrepreneurship. 3ne
is not mistaken to say that the present and future economic advancement
of Nigeria lies in the dynamism" and growth of small business enterprises.
The numerous contributions made to the economic development of
Nigeria by small8scale industries are often overlooked or under8estimated
by economic planners" governments" technocrats and entrepreneurs.
Small scale @business plays vital roles in the economic development of
Nigeria and this is why the Nigerian government continual support and
)-
encouragement of people wishing to set up small scale business" most
often small scale industries make more efficient use of inputs like raw
materials capital and labour than the big industries.
:ith the establishment of small scale industries we can easily reduce the
rate of unemployment or even eradicate it in Nigeria" more especially in
Imo State" thereby creating employment opportunities to the unemployed.
It has been statistically employ observed that small scale industries create
employment for the teaming population in Nigeria. Cesearch has shown
that about B,H of the entire labours are employed by medium and small
scale industries or businesses.
2.3 HISTORY OF SMALL SCALE INDUSTRIES
$s the Anited States took the big 0ump from agriculture @ dominated
society to an industrial society" self8employment statistics also changes
dramatically. *y ),((" about F( percent of the work force was self
employed. :hile about '( percent worked for other firms. $s the year
'((( approaches" the opposite is essentially true. '( percent of workers
work for other and businesses.
3ne might conclude from this that there are fewer small firms in the
country" but that is not true. In fact" small industries are as popular as ever.
)B
The decrease in self employment came from a decline in the number of
independent farmers" which was largely offset by an increase in large firm
employment.
2.4 NEGLECT OF SMALL SCALE INDUSTRIES
$ttempts by developed developing countries to eradicate poverty and
unemployment initially focuses on the development of large enterprises
based on the traditional economy of scale. This theory is predicted on the
assumption that Ibig is better while Ismall is bad. Small enterprises were
seen as outdated and synonymous with technological and economically
backwardness. Ironically almost all the business that were initially small
eventually became large business enterprises. &ost of the multinational
corporations like .hilips international of Netherlands" Sonny of 2apan etc"
stated as family business ventures. In Nigeria" there are indigenous
enterprises such as $debowale 5lectrical and 23$S 5lectrical industry
limited that started as small outfits" importing finished. The same thing is
applicable to enterprises like +angote 1roup of companies and +antata
1roup of companies to mention 0ust a few that commences operation as
prime movers of trade and imports before they diversified into
manufacturing business.
)F
2.5 LIFE CYCLE OF SMALL SCALE INDUSTRIES
In general" the ideal life cycle of small and medium enterprises as
positioned by Degge (),,,) can be divided into four phases vi!? start up"
accelerated growth" stable growth and maturity.
T$% &#-4# 3!?8 usually lasts for a period of one of three years during
which the founder supervises the whole business activities that may be
carried out by family members" friends or small number of employees.
T$% !$-&% "9 -..%0%4-#%2 :4";#$?8 Asually lasts three to four years.
+uring this period" the founder or a management e#pert handles
management. $t this point" a corporate organi!ation is developed thereby
leading to separation of ownership from management.
T$% &#-<0% G4";#$? This phase typically has duration of two to five
years. +uring this period" management e#pertise and the corporate
organi!ation are divided into numerous departments and inflow of stable
long8term venture capital form corporate investors begins to appear.
),
F',-00= #$% !$-&% "9 +-#34'#?8 This may start after several years of
beginning in the business adopts the same type of management as stable
growth phase but ma0or difference being that sources of funding may
become more diverse.
2.( EMPLOYMENT GENERATION THROUGH SMALL SCALE
DAIRY MARKETING AND PROCESSING
The role of employment in poverty reduction programmes in developing
countries has received considerable attention worldwide" in development
strategies and policies. &any new employment opportunities in many
developing countries are created in the informal sector whose rate of
growth may be higher than that of the formal sector. Dor e#ample" in
Jenya" according to a recent economic survey (1ok" '(()) the informal
sector has been growing at over )( percent in the last decade and its share
of total employment" e#cluding employment in small8scale farming
activities estimated at B( percent in '(((. in contrast" the number of wage
employees in the formal sector has remained static.
+espite continued rural to urban immigration" a large proportion of the
population in many developing countries still lives rural areas and are
'(
mainly poor with over 7( percent overall classified as poor (AN+." '(())
Jenya" *angladesh and 1hana are typical cases. The rural population in
the three countries accounts for over two8thirds of the population and the
rural labour force is growing at about 7 percent annually in each country.
5mployment opportunities in rural areas may have to rely on
strengthening the ability of non8farm agricultural activities to absorb the
labour. +iversification into non8farm activities constitutes on average
about 9= percent of rural incomes in developing countries and the /push
and pull6 factors driving this diversification are bound to persist (%orlson
and Jarloon" '(((). .ush factors include changes in technology in
agriculture that reuire less labour" creating labour surpluses and reducing
agricultural labour opportunities" and pull factors include 0ob creating in
urban areas from industry that raise wages and employment opportunities
there.
The case studies described here shed some light on the nature and
uantity of employment created through small8scale diary marketing and
processing" most of which occur in the informal sector.
2.) CONCEPTUAL FRAME6ORK FOR EMPLOYMENT
GENERATION
')
The use and value of employment in targeting poverty is neither new nor
is it restricted to any one region. >istorically" the poor employment $ct of
)FB) in great *ritain represented a ma0or milestone in the development of
economic policy to reduce poverty through employment and development
Dagge" T. $. '((9). That $ct and similar public interventions in later years
in various countries have been largely based on the recognition that small
firms are important generators of employment (%orlson and Jarloon"
'(((). Dagge ('((9) in interpreting the 0ob generating role of the small
enterprises" emphasi!es the e#treme skewness and volatility of the
individual small business growth patterns" and the low uality and
sustainability of the many 0obs created by the mass micro8enterprises. >e
observed that a relatively few firms e#hibiting rapid and sustained
growers account for the bulk of sustained 0ob generation in small firms.
This is especially so for the developing world where economic reforms
are recent and hurried" and availability and access to market information
is not uniform and assured.
The main goal behind enterprises is to generate income for the
entrepreneurs and their families. In the case of marketing enterprises" that
reuires that goods have to be sourced" transported" transformed" and
marketed. The physical assets involved need to be acuired" serviced and
''
repaired. $ll these activities reuire human labour fully or in part"
depending on the level of business sophistication and technology
employed. >uman labour has a price" whether it is family labour (referred
to as self8employment) or non8family labour (wage employment). The
remuneration received by family members is critical to a households
ability to access basic needs" improve livelihoods and 1reat assets.
A DIAGRAM FOR THE CONCEPTUAL FRAME6ORK FOR
EMPLOYMENT GENERATION
2.* PROBLEMS OF SMALL SCALE INDUSTRIES IN
DEVELOPING COUNTRIES
'7
5ntrepreneurial culture
Cesources (%apital"
labour etc)
Small8Scale
&anufacturing and
marketing
enterprises
Income
Improved
livelihood
and reduced
poverty
5mployment
The economic development of a country primarily depends upon the
establishment of industries" which reuire sufficient amount of capital. In
a country like India" where capital is scarce and unemployment is wide
spread" growth of small scale industries is vital in order to achieve
balanced economic growth. +evelopment of small scale industries plays
an important role in overall economic development of a country like India
where millions of people are unemployed or underemployed.
P">%4# -,2 3,%+!0"+%,# are two burning problems of the country
today. This sector solves these two problems by proving employment"
with lower investments. +espite of favourable policies of government
towards encouragement and promotion of small scale industries"
unfortunately" figures show that the condition of small scale industries are
not up to the mark. In this 0unction an earnest attempt has been made to
analy!e the development of small scale industries during five years plans
in India as a whole and in $ndhra .radesh in particular.
OTHER PROBLEMS ASSOCIATED 6ITH SMALL SCALE
INDUSTRIES.
'9
*aadom ('((9) asserted that the following problems militate against the
effective operation of small scale industries in Nigeria
1. P""4 '+!0%+%,#-#'", "9 !"0'.'%&?8 There have been many good
policies in the past by the government to improve" but weak
implementation has made it impossible to reali!e the goal
2. L-.? "9 .",#',3'#?8 most small scale establishments are sole
proprietorship and such establishment often ceases to function as
soon as the owner loses interest or dies. This raises the risk of
financing such business.
3. P""4 .-!'#-0 "3#0-?8 Inadeuate capital out8lay has often affected
small scale business adversely. Dinanciers often regard the sector
has high risk area and therefore feel skeptical about committing
their fund of it.
4. P""4 +-,-:%+%,# %@!%4#'&%?8 management has always been a
problem in this sector as most small scale businesses do not have
the reuired management e#pertise to carry them through once the
business start growing . The situation gets compounded as training
is not usually accorded priority in such establishments.
5. I,-2%A3-#% ',9"4+-#'", <-&%?8 small scale business enterprises are
usually characteri!ed by poor record keeping and that usually starve
'=
of necessary information reuired for planning and management
purposes. This usually affects the reali!ation of the sector.
(. 0-.? "9 4-; +-#%4'-0&?8 In some small scale business enterprises"
raw material are sourced e#ternally" hence the rate of such
enterprises to foreign e#change behavior. The fluctuation of foreign
e#change may therefore make it difficult to plan and that may
precipitate some stock that may destabili!e the setup.
). P""4 A.."3,#',: &&#%+?8 The accounting system of most small
scale business enterprises lack standard and does not make room for
the assessment of their performance. They create opportunity for
mismanagement" which conseuently may lead to enterprise failure.
*. U,&#-<0% !"0'. %,>'4",+%,#?8 1overnment policy instability has
not been helpful to small scale businesses. That has been
destabili!ing and has indeed sent many SSIs to early fold ups.
2./ EMPIRICAL STUDIES ON THE IMPORTANCE OF
SMALL SCALE INDUSTRIES ON EMPLOYMENT
GENERATION
'-
The argument on the role of small scale industries in $meliorating the
menaces of unemployment in national economy has been in the front
burner for years and this has geared many scholars on the sub0ect to
conduct researches that could beam light on the issue. It is in the same
spirit that reviewing past research studies on sub0ect becomes imperative.
%onsidering a study conducted by Eawal" ('()() which was basically a
survey of small scale industries in local government in Imo State and the
purpose was to assess the strategic role of participating SSIs in economic
development. +ata for this study was generated form both primary and
secondary sources through the use of self administered uestionnaires and
structured interview. %ontent analysis of record particularly financial
record of some participating SSIs were undertaken to obtain the
secondary data. Dor this particular study" a total population of =( was used
among which random sampling techniues was employed to select )=(
SSIs upon which the research instruments were administered. The result
of the analysis conducted seuel to the study shows the international SSIs
contributed more than domestic SSIs in all dimension of strategic
importance. In other words" SSIs with international presence are stronger
and perform better than those with out international presence therefore
'B
making the former to be more of strategic importance to development
than the latter.
In a similar study carried out by Dagge ('((') in which key success factor
in SSIs were researched since success is a measure of effectiveness of the
sector and the impact of the sector on the overall development of
participating firm and by e#tension national economy at large. In that
study" the researcher adopted a cross sectional survey of small and
medium enterprises in Eagos. The primary data were gathered through a
self and ministered uestionnaire and complemented with content analysis
of some published reports on small scale industries. $ sample of '((
entrepreneurs selected across different industries was selected for the
study. The choice of industries and selection of samples were based on
accidental sampling method. .articipating respondents were operators of
small scale enterprises who volunteered to respond to our uestionnaire.
The sampling method was adopted due to lack of comprehensive
information on the population of small enterprises operating in Eagos.
The main instrument used was a self administered uestionnaire divided
into two main sections. Section $ contained uestions on success factors.
Cespondents were provided with following options? critically important
'F
coded = points" very important coded if points" important coded 7 points"
somewhat important coded ' points and least import and coded.
Section * of the uestionnaire reuested for the background information
of the entrepreneurs and the organi!ation to empirically answer the
research uestions" descriptive statistics such as mean" mode median and
standard deviation were employed in analy!ing the responses of
participating respondents. 3ut of the '((( firms and entrepreneurs that
participated useable and complete data were obtained from ),=. the
finding of this study reveals that considerable percentage of Nigerian
working population (that id '( @ 9, years) is increasing seeking for self8
employment. This age group constitutes responsible men who have
attended higher institutions. The survey of these entrepreneurs also
indicate that technology proper planning" financial survival of Nigerian
small scale industries.
In the contemporary business technology is a vital factor that must be
reckoned with. Eack of technology will result from absence of research
and inability to adopt modern techniues" there by resulting into low
productivity. >ence" there is no gainsaying in the fact technology is one of
the challenges in the growth of Nigerian small scale industries.
',
The significance of finance in small scale industries development is well
established and generally accepted" successive governments over the
years have implemented various financing arrangement at the micro level
to assist small scale entrepreneurs. Nigerian is blessed with vast natural"
human and material resources" which implies that she has great potential
for emergence of a vibrant industrial sector" particularly in small scale
industries.
The role of small scale industries in the technological and industrial
development of any nation 0ustifies the need for greater attention to this
sector. The foundation of growth in developed countries of the world is
usually attributed to the contribution of the small scale industries.
In Nigeria" the successive administrations have adopted various policy
measures aimed at stimulating" sustaining and supporting
entrepreneurship" development in small scale enterprises. The success of
these measures will be dependent on the presence of some key factors
such as technology" financial control" proper planning and productivity of
labour force. $ll these factors attest to the fact that creation of enabling
environment and effective management will assist in the growth and
development of small scale industries.
7(
Celating the study conducted by Eawal ('()() to the one conducted by
30o $. T. ('((-) it therefore follows that for SSIs irrespective of the
nature of their business ideology" key success factors such as proper
planning" good financial control" technology" sustainable improved
employee productivity are germane to success of the organi!ation whether
such SSIs are with international presence of only domesticated in Nigeria.
7)
CHAPTER THREE
3.0 RESEARCH METHODOLOGY
3.1 INTRODUCTION
This chapter shows the methods and the step by step procedures which the
researcher used in carrying out its research. It also describe the ways in
which data are obtained" which shall reuire information to satisfy the
research purpose. These therefore include the research design" method of
data collection" population of study" sample techniues etc.
3.2 RESEARCH DESIGN
The researcher employed various methods and procedures in order to
achieve the ob0ective of the research work. The researcher obtained
information from both primary and secondary sources" but ma0orly
through primary data which include observation" oral interview and
administration of uestionnaire to the reuired population.
The data collected through the uestionnaires will be put in tables
analy!ed and interpretation given to each analysis made.
3.3 METHOD OF DATA COLLECTION
Dor the purpose of this research" two main source of data were used which
where helpful in collections" analy!ing and interpretation of data with a
7'
view of e#plaining the solution of the problem of unemployment of small
scale industries.
a. .rimary sources of data
b. Secondary sources of data.
a. Q3%&#'",,-'4%&? The uestionnaire was structured in a
multiple answer options which offered the respondent with
alternatives to choose from. The respondents were given time
to study and complete the uestionnaires after which the
researcher collected them back.
b. P%4&",-0 ',#%4>'%;? The researcher also interviewed
personnels who gave out relevant information that was not
contained in the uestionnaire.
S%.",2-4 &"34.%? +ata was drawn from te#tbooks" newspapers"
maga!ines" 0ournals and lecture notes.
3.4 POPULATION OF STUDY
The population of study for this research work will be both owners of
small and medium scale enterprises consisting of both manufacturing and
service business. $ total of =( populations were drawn for purpose of this
research work. The SSIs selected for this study were printing business"
food ventures" restaurants" business centres" >air dressing Salons" fashion
77
and designing ventures etc with employment ranging from '8)( employee
which are spread across Imo State.
3.3 SAMPLE AND SAMPLING TECHNIQUE
Since it is practically impossible to study all the unemployed youth and
small scale industries and service enterprises in Imo State" the researcher
adopted a random sampling techniue to select sample adopted for the
study. $t the end of the sampling a total number of =( samples were
selected for the study
Sample si!e of this work was calculated from the population to obtain the
optimum sample to be used in the research work.
n K N
) L N(e)
'
:here? n K desire sample si!e
N K .opulation of the study
e K =H
) K constant
=BMM
) L=B ((.(=)
'
K MMM=BMM
) L=B((.(('=)
79
K MMM=BMMM
) L(.)9'=
K =B
).)9'=
K 9,.,
K =(
3.( METHOD OF DATA ANALYSIS
To derive useful meaning from the data generated" the following statistical
techniues procedures were used.
'. S'+!0% !%4.%,#-:%? This was used in analysis of each of the
uestions in the uestionnaire and was presented in tabular form
''. C$'8SA3-4%B This was adopted in testing the hypothesis
formulated. The chi8suare formular is stated below.
The chi8suare is given as
N
'
K O (oi85)
'
5
:here
N
'
K chi8suare
O K Summation
3 K 3bserved freuency
7=
5 K 5#pected freuency
Eevel of significance =H
'''. $ll the statistical test and analysis were carried out at the
conventional =H level of significance.
DECISION RULE
If the calculated value is less than the critical value" accept >
(
and re0ect
>
)
If the calculated value is greater than the critical value" accept >i and
re0ect >o
7-
CHAPTER FOUR
4.0 DATA PRESENTATION AND ANALYSIS
4.1 INTRODUCTION
In order to continue with the research there is need to e#amine the data
collected after the data have been collected from different sources" they
were arranged on the basis of the uestions to test the hypotheses. The
data were presented in simple table and in percentages as indicated by the
responses for proper interpretation.
4.2 DATA PRESENTATION
Puestion )? +o you agree that accelerated economic growth and
development is a /conditio sine qua non6 (condition that you can do
without) for improving the uality of life<
Table '?
3ption No of responses .ercentage (H)
Strongly $greed 7= B(H
$gree )9 'FH
Strongly disagree 8 8
+isagree ) 'H
Total =( )((H
Source? Puestionnaire '()9
2udging from the analysis in the above table" it is clear that accelerated
economic growth and development is a /conditio sine qua non6
(condition that you can do without) for improving the uality of life. This
7B
fact is 0ustified on the ground that 7= respondents representing -(H of the
total responses strongly agreed to this fact while )9 respondents
representing 'FH of the total responses agreed to it. *ut ) respondent
representing 'H of the total responses does ob0ected to it.
Q3%&#'", 2? +o you agree that small and medium scale enterprises
contribute to global economic growth and development<
Table 7?
3ption No of responses .ercentage (H)
Strongly $greed 7( -(H
$gree )- 7'H
Strongly disagree ' 9H
+isagree ' 9H
Total =( )((H
Source? Puestionnaire '()9
It is clearly indicated that small and medium scale enterprises contribute
to global economic growth and development. This fact is 0ustified on the
ground that 7( respondents representing -(H of the total responses
strongly agreed to this fact while )- respondents representing 7'H of the
total responses agreed but ' and ' respondents representing 9H and 9H
respectively ob0ected to this fact.
Puestion 7? The establishment of small scale industries in $boh8mbaise
E1$ will bring about innovation and invention<
7F
Table 9?
3ption No of responses .ercentage (H)
Strongly $greed 9( F(H
$gree F )-H
Strongly disagree 8 8
+isagree ' 9H
Total =( )((H
Source? Puestionnaire '()9
The table above indicated that" the establishment of small scale industries
in $boh8mbaise E1$ will bring about innovation and invention. This fact
was accept by 9( respondents representing F(H of the total responses
who strongly agreed while F respondents representing )-H agreed to it
but the remaining two respondents representing 9H of the total responses
ob0ected to this fact.
Puestion 9? Anemployment does not affect the economic growth of
Nigeria< +o you agree to this assertion<
Table =?
3ption No of responses .ercentage (H)
$greed )( '(H
+isagreed 9( F(H
Total =( )((H
Source? uestionnaires '()9
9( respondents representing F(H of the total responses disagreed with the
notion that /unemployment does not affect the economic growth of
7,
Nigeria while )( respondents representing '(H of the total responses
ob0ected to this fact.
Puestion =? The establishment of small8scale business will help to solve
unemployment problem. +o you agree to this assertion<
Table -?
3ption No of responses .ercentage (H)
$greed 9B ,9H
+isagreed 7 -H
Total =( )((H
Source? Puestionnaire '()9
Drom the above" small8scale business will help to solve unemployment
problem. This fact is 0ustified on the ground 9B respondents representing
,9H of the total responses attesting to it while 7 respondents representing
-H of the total respondents disagreed with it.
Puestion -? Qouths should be encouraged to develop and nurture
entrepreneurial spirit.
Table B?
3ption No of responses .ercentage (H)
Strongly $greed 9( F(H
$gree F )-H
Strongly disagree 8 8
+isagree ' 9H
Total =( )((H
Source? Puestionnaire '()9
9(
In the above table" the concept that youths should be encouraged to
develop and nurture entrepreneurial spirit was strongly agreed by 9(
respondents representing F(H of the total responses while F respondents
representing )-H of the total responses agreed to it but ' respondents
representing 9H of the total responses disagreed to the concept.
Q3%&#'", )? Small8scale industries serve as a guide to the introduction of
large scale business.
Table F
3ption No of responses .ercentage (H)
Strongly $greed 7= B(H
$gree = )(H
Strongly disagree = )(H
+isagree = )(H
Total =( )((H
Source? Puestionnaire '()9
The table above shows that 7= respondents representing B(H of the total
responses strongly agreed to the fact that small8scale industries serve as a
guide to the introduction of large scale business" = respondents
representing )(H of the total responses agreed also but = and =
respondents representing )(H and )(H respectively of the total responses
ob0ected to this fact.
9)
Q3%&#'", *? The youths can enhance sustainable development of the
Nigeria economy through S&5s.
3ption No of responses .ercentage (H)
Strongly $greed 9= ,(H
$gree 8 8
Strongly disagree 7 -H
+isagree ' 9H
Total =( )((H
Source? Puestionnaire '()9
In the above table" 9= respondents representing ,(H of the total responses
strongly believed that youths can enhance sustainable development of the
Nigeria economy through S&5s while 7 and ' respondents representing
-H and 9H respectively ob0ected to it.
4.3 DISTRIBUTION AND RETURN OF QUESTIONNAIRE
In all" fifty uestionnaires where distributed and all of them were
retrieved. Thus the following table indicates the distribution of
uestionnaire
Table )?
9'
3ption No distributed No. returned Total
&ale 7( 7( -(H
Demale '( '( 9(
Total =( =( )((H
$ll the uestionnaires distributed where collected.
4.4 TESTING OF HYPOTHESIS
In this chapter" the researcher will be testing the stated hypothesis to
determine whether to accept or re0ect the null hypothesis. >owever" the
responses will be used in testing the hypothesis with chi8suare
distribution.
R%&#-#%+%,# O9 H!"#$%&'&
>
(
?

There is no significant relationship between small8scale industries
and the resolution of unemployment problem in Imo State
>
)
? There is significant relationship between small8scale industries and
the resolution of unemployment problem in Imo State
The chi8suare is given as
N
'
K O(3i85i)
'
5i
97
:here
N
'
K chi8suare
O K Summation
3i K 3bserved freuency
5i K 5#pected freuency
Eevel of significance =H
Cesponses from table = and -
Puestion number 9 and =
$greed +isagreed Total
)( 9( =(
9B 7 =(
=B 97 =(
5#pected freuency K 5i
5i
)
K =( # =B K'F.=
)((
5i
'
K =( # 97 K ').=
)((
5
')
K =( # =B K 'F.=
)((
5
')
K =( # 97 K ').=
)((
To draw the table chi8suare
99
3i 5i 3i85i (3i85i)
'
(3 @5i)
'
5i
)( 'F.= 8)F.= 79'.'= )'.((,
9( ').= )F.= 79'.'= )=.,),
9B 'F.= )F.= 79'.'= )'.((,
7 ').= 8)F.= 79'.'= )=.,),
Total ==.F=-
Survey data '()'
K #
'
==.F=-
Test statistic
N
'
K ==.F=-
%ritical value
R K =H
)((H 8 R K )((H 8 =H
)((H 8 R K ,=H
R K ,=
)((
R K (.,=H
R SN
'
K (r8))(c8))
N
'
K (.,= (C 8)) (%8))
N
'
K (.,=('8)) ('8))
N
'
K (.,=()#))
N
'
K (.,= # )
9=
N
'
K 7.F9)
DECISION RULE
Drom the data analysis calculated
Test statistics K N
'
K ==.F=-
%ritical value K N
'
K 7.F9)
Therefore" since the test statistic ie calculated as N
'
K ==.F=- is greater
than critical value or 7.F9)" we re0ect >
(
and accept >
i
and conclude that
there is significant relationship between small8scale industries and the
resolution of unemployment problem in Imo State
CHAPTER FIVE
5.0 SUMMARY OF FINDINGS= CONCLUSION AND
RECOMMENDATION
5.1 SUMMARY OF FINDINGS
The problem of unemployment and its impact on economic development
of Nigeria is what propelled the research to investigate on solving
unemployment problem through the establishment of small scale
9-
industries. In analy!ing the collected data" the followings findings were
observed. Thus;
i. $ccelerated economic growth and development is a
/conditio sine qua non6 (condition that you can do
without) for improving the uality of life
ii. Small and medium scale enterprises contribute to global
economic growth and development
iii. The establishment of small scale industries in $boh8
mbaise E1$ will bring about innovation and invention
iv. Anemployment does affect the economic growth of
Nigeria
v. The establishment of small8scale business will help to
solve unemployment problem
vi. Qouths should be encouraged to develop and nurture
entrepreneurial spirit
vii. Small8scale industries serve as a guide to the introduction
of large scale business
viii. The youths can enhance sustainable development of the
Nigeria economy through S&5s
9B
5.2 CONCLUSION
%onclusively" it has become clear the role of small scale industries in
employment generation can not be over emphasi!ed. It not only solves the
problem of unemployment but assists in revamping the economic growth
and development by contributing in poverty alleviation. So many scholars
have deliberated on the issue of unemployment and discovered that
entrepreneurial activities should be encouraged among the youths so as to
enable them to be self employed since the government cannot
accommodate them all as a result of the population in Nigeria.
The government" through their policies should enact laws that will
encourage the small scale enterprise in the country. This they can achieve
by making the level of ta#ation more favourable for the entrepreneurs and
to provide the necessary infrastructural facilities within the nation.
5.3 RECOMMENDATION
3wning to the necessity and importance of small scale industries in the
generation of employment of improvement of the economy" the following
recommendations are recommended. Thus?
9F
The different tertiary institutions in Nigeria should endevour to lay
more emphasis on the concept of 5ntrepreneurship development
among the students. This will enable them to euip themselves so as
not to be stranded after graduation.
The government should provide favourable ground through their
policy that will promote the growth of small scale industries within
the country as this will great more room for employments and help
in the revamping of the economic development and growth
The financial institutions such as banks should be able to give loans
to entrepreneurs with lower interest rate so as to encourage them in
carrying out their entrepreneurial activities.
9,
REFERENCES
Eawal" $. $. and *ello" &. $. ('()(). /Strategic Importance of
Nigerian Small and &edium
Eawal" $. $."; Jio" 2. S.; Sulaimon $. and $debayo 3. (),,F).
/5ntrepreneurship in small Eimited.
Nna" 3. ('(()). /Importance of small and medium enterprise investment
scheme6. :orkshop Nigeria Eimited
3wualah" S.I (),,,a) /Tackling Qouth Anemployment through
5ntrepreneurship International small *usiness 0ournal. Gol. )B. No.
7 $pril82une. 9, @ =,
Dagge" T. $. ('((9) /1rassroots approach to poverty alleviation in
Nigeria6. Nigeria goals (&+1) 2ournal of *usiness and Social
studies. )" )" '(87=. 1overnment publication press
3nugu" *. $. ('((=) /Small and &edium 5nterprises in Nigeria?
problems and .rospects.
$nyanwu %. &. ('(()) /Dinancing and promoting Small scale industries?
%oncepts issues and problems. The Nigerian 0ournal of 5conomic
research.
*eyene" $. ('((') I5nhancing competitiveness of productivity of small
and medium enterprises business enterprises6. Eagos" Eabson
=(
Cesource Eimited" business Strategy? -. -B B=. %luster in Nigeria6.
Ibadan &osuro press. %ompany comparative analysis of India and
other economics6 New Qork 3#ford Aniversity press
%orlson" *. and Jarloon %. ('((() /5ntreprenuership in Small and
&edium si!ed 5nterprises and &acro 5conomy6. %ambridge
Aniversity .ress.
+avis S. 2; 0ohn" > and Scoh" S (),,-) /Small *usiness and 2ob %reation?
+issenting the myth
30o $. T ('((-). /Asing small and medium enterprises to achieve
millennium development goal
3yelaran @ 3yeyinka" *; $dela0a & and $biolo" * ('((B) /Small and
&edium 5nterprises period of ),F( @ ),FB6 Nigerian financial
review. -=8-B
Shinder" E. ('((B) /5nterprenuership in Timbawes informal Sector6
35%+ +evleopment %enter? Special Section" =B8-)
Turnham" +. (),,B) /5mployment %reation and +evelopment Strategies6.
35%+ +evelopment %enter. Special Section" 9B @ =-
=)
APPENDIC I
School of *usiness &anagement technology
+ept. of business $dministration and
&anagement
Imo State .olytechnics
Amuagwo 3ha0i
''S)(S'()'
+ear SirS&adam"
I AT3TI5 D$IT> .A. with registration number '()'S>N+S*$&S=79=B
is a final year student of the above named school carrying out a research
on the topic /Solving unemployment problem through the establishment
of small scale industries (SSIs). This is in partial fulfillment of the
reuirement for the partial fulfillment of the reuirement for the award of
>igher national +iploma (>N+) certificate.
I appeal to you to help answer the uestions contained in the
uestionnaire which is aimed at collecting first hand information for
academic work. $ll information supplied here will be handled with utmost
confidentiality.
Thanks for your corporation
Qours faithfully
AT3TI5 D$IT> .A.
='
APPENDIC II
Q3%&#'",,-'4%
I,&#43.#'",? .lease tick (U) in the appropriate bo#
Section $
(*io +ata of Cespondents)
). Se#
a. &ale
b. female
'. $ge Eimit
a. *elow '= years
b. '=87= Qears
c. 7- @ 9= years
d. $bove 9= years
7. 5ducational *ackground
a. :$5%SN5%3
b. N+SN%5
c. >N+S*S%
e. .rofessional
9. Qears in Service
a. Eess than five years
=7
b. =8)( years
c. ))8)= years
d. )- @ '( years
e. $bove '( years
=9
SECTION B
). +o you agree that accelerated economic growth and development is a
/conditio sine qua non6 (condition that you can do without) for improving
the uality of life<
a. Strongly $greed
b. $gree
c. Strongly disagree
d. +isagree
'. +o you agree that small and medium scale enterprises contribute to
global economic growth and development<
a. Strongly $greed
b. $gree
c. Strongly disagree
d. +isagree
7. The establishment of small scale industries in $boh8mbaise E1$ will
bring about innovation and invention<
a. Strongly $greed
b. $gree
c. Strongly disagree
d. +isagree
==
9. Anemployment does not affect the economic growth of Nigeria< +o
you agree to this assertion<
a. Strongly $greed
b. $gree
c. Strongly disagree
d. +isagree
=. The establishment of small8scale business will help to solve
unemployment problem. +o you agree to this assertion<
a. Strongly $greed
b. $gree
c. Strongly disagree
d. +isagree
-. Qouths should be encouraged to develop and nurture entrepreneurial
spirit.
a. Strongly $greed
b. $gree
c. Strongly disagree
d. +isagree
=-
B. Small8scale industries serve as a guide to the introduction of large scale
business.
a. Strongly $greed
b. $gree
c. Strongly disagree
d. +isagree
F. The youths can enhance sustainable development of the Nigeria
economy through S&5s.
a. Strongly $greed
b. $gree
c. Strongly disagree
d. +isagree
=B