LECTURE NOTE TWO

GLOBAL HISTORY OF ENTREPRENEURSHIP DEVELOPMENT

The history of entrepreneurship development is as old as man. However,

entrepreneurship dates back to the work of Richard Cantillon and Adam Smith in the
late 17th and early 18th centuries. Entrepreneurship development was theoretically
ignored until the late 19th and early 20th centuries. Empirical studies in
entrepreneurship development actually started in the 1950s. Our understanding of
entrepreneurship started with the works of Joseph Schumpeter, Carl Menger, Ludwig
von Mises and Friedrich von Hayek. Schumpeter defined an entrepreneur as a person
who is willing and able to convert a new idea or invention into a successful innovation.
The concept of "the gale of creative destruction" is also credited to Schumpeter. It
connotes creating new business models and new products/services by replacing in
whole or in part inferior innovations across markets and industries. As such, creative
destruction is the factor influencing changes in industries and long-run economic
growth.
Israel Kirzner added that most of the innovations are as a result of incremental
improvements such as the replacement of manual typewriter with computer. In line with
Kirzner’s assertion, Schumpeter further viewed entrepreneurship as the factor that births
new industries and new combinations of currently existing inputs. For instance, the
combination of steam engine and wagon to produce the horseless carriage. In this case
the innovation, the car, was transformational but did not require the development of a
new technology, merely the application of existing technologies in a novel manner. It
did not immediately replace the horse drawn carriage, but in time, incremental
improvements which reduced the cost and improved the technology led to the complete
practical replacement of beast drawn vehicles in modern transportation.
Frank H. Knight (1921) and Peter Drucker (1970) view entrepreneurship as risk taking.
The behaviour of the entrepreneur depicts the willingness to put his or her career and
financial security on the line and take risks in the name of an idea, spending much time
as well as capital on an uncertain venture. Knight classified uncertainty into risk,
ambiguity and true uncertainty. Risk is statistically measurable (such as the probability
of drawing a red color ball from a jar containing 5 red balls and 5 white balls).
Ambiguity is statistically difficult to measure (such as the probability of drawing a red
ball from a jar containing 5 red balls but with an unknown number of white balls). True
uncertainty or Knightian uncertainty is impossible to statistically measure or predict
(such as the probability of drawing a red ball from a jar whose number of red balls is
unknown as well as the number of other colored balls). The acts of entrepreneurship are
often associated with true uncertainty, particularly when it involves bringing something
really novel to the world.

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Entrepreneurship was first taught as an academic course at Harvard Business School in 1947.
In 1953, Peter Drucker introduced the first courses in entrepreneurship and innovation at New
York University. In the early part of the year 2000, entrepreneurship was taught as a field of
study in 600 universities around the world and as a major course at 400 universities.
HISTORY OF ENTREPRENEURSHIP DEVELOPMENT IN NIGERIA
Entrepreneurship development began in Nigeria when people started producing more
products than they needed. This gave rise to the exchange of the surpluses for other
things they needed. As such, early entrepreneurship started through this exchange which
is better known as trade by barter. The exchanges are basically with family members,
friends, mates, in-laws and members of the same community. The hallmarks of
entrepreneurship development in the early days include buying and selling without the
use of money, production with small capital that are usually sourced from personal
savings, family members and friends.
The advent of the colonial masters marked the beginning of the modern
entrepreneurship development in Nigeria. The wears the colonial masters brought into
the country presented opportunities for Nigerians to start acting as middle men. Modern
entrepreneurship promoted retail trade or sole proprietorship. The coming of the
colonial masters slowed down the pace of entrepreneurship development. One of the
major factors that have in many ways discouraged this flow of entrepreneurship
development in Nigeria is the value system brought about by formal education. For
many decades, formal education has been the preserve of the privilege. With formal
education people had the opportunity of being employed in the civil service, because in
those days the economy was large enough to absorb into the prestigious occupation all
Nigerians their goods. As such, the system made Nigerians to be dependent on the
colonial masters.
Again, the contrast between Nigerian and foreign entrepreneurs during the colonial era
was very detrimental and the competitive business strategy of the foreign entrepreneurs
was ruinous and against moral standards established by society. They did not adhere to
the theory of “live and let’s live”. For instance, the United African Company (UAC)
that was responsible for a substantial percentage of the import and export trade of
Nigeria, had the policy of dealing directly with producers and refused to make use of
the services of Nigerian entrepreneurs. The refusal of the expatriates to utilize the
services of local businessmen inhibited their expansion and acquisition of necessary
skills and attitude. Because of this, many eventually folded up. Those that folded up
built up resentment against business which became very demoralizing to other
prospective entrepreneurs. As a result, the flow of entrepreneurship in the country was
slowed down. But, with more people being educated and the fact that government could
no longer employ most school leavers, economic programs to encourage individuals to
go into private business and be self-reliant were initiated.

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The Future of Entrepreneurial Development in Nigeria
Right after the reinstatement of democracy in 1999, the federal government of Nigeria
policy on accelerated development has been on entrepreneurial education.
Entrepreneurship was approved as a compulsory course for all students in higher institutions.
This came into effect as a general studies (GST) course in the 2007/2008 academic session.
Subsequently, Federal University of Technology, Minna, Niger State and Nasarawa University,
Keffi, Nasarawa State became the first set of universities in Nigeria to start offering
entrepreneurship as a degree course, while in 2016, Veritas University, Abuja, commenced the
bachelor of science degree program in entrepreneurship. The federal government has since
initiated successive programs aimed at promoting enterprises through widespread use of
technology and socially relevant business models. The extent of success of these and
other measures, is still a matter of debate. However, the future of entrepreneurship
development in Nigeria is in making the implementation of these measures a success.
Obstacles to Enterprise Development

The following are the most important obstacles facing rapid entrepreneurial
development:
i. Absence of a pro-active regulatory environment that encourages innovative enterprise
development at the grassroots level.
ii. Significant infrastructural deficits (especially with regards to roads and electricity) and
systemic irregularities inimical to small businesses.
iii. The presence of administrative and trade barriers that curtail capacity building and
inhibit access to technical support.
iv. Absence of regulatory mechanisms for effective oversight of enterprise development
initiatives, especially those in the MSME space.
v. Poor access to vocational and skills-development training for rural and urban youths
involved in the informal economy.
vi. Rampant political and bureaucratic corruption, together with the absence of social
consensus on important macroeconomic policy issues.
vii. Constrained access to local and international markets that stunt entrepreneurial
expansion and proliferation.
viii. Inadequate access to finance and the absence of a credit policy that addresses the
specific needs of enterprises.

Skills Required of Youth for Entrepreneurial Leadership

Communications: The entrepreneur requires this to communicate his ideas across to

his audience. Such ideas must be expressed and conveyed in clear and lucid manner in

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order to create no room for ambiguity. The budding entrepreneur must always give the
people something to feel, something to remember and something to do. Doing so will
increase his ability to lead and drive a successful business.

Initiative: Naturally, young people are initiators of ideas. The budding entrepreneur
must be bold, daring and willing to sacrifice his time and energy to meet goals. The fear
of failure should not be a deterrent to putting initiatives into practice. He must work
against all odds. He must be ingenious and alert to opportunities in order to take action.
Success is sometimes connected with actions. When mistakes are made, the young
leader should not quit but should device alternative mean to achieve his objective. The
youth must be willing to takes risks.

Responsibility: The youth as a future leader must be willing to take responsibility for
his actions. He should also learn to admit his failures as well as the failures of those
under him. Leadership comes with doing things the way one wants others to do them.
As such, the leader must lead by example. He must be honest, transparent, fair and just
to his subordinates. He must learn to trust those under him and give them a sense of
belonging. A leader must always be capable of building confidence in people so that
they can believe in him as well as believe in themselves. An entrepreneur should always
be a motivating factor to people around him.

Vision: A good entrepreneur must be a visionary and must know that the future belongs
to those who see possibilities before them. Vision is everything for a leader. It is utterly
indispensable and vision leads the leader. As such any leader must possess the ability to
infuse hope and courage amongst his team. Hope is built from seeing the potentials in
people and in situations. The leader must always be optimistic and possess a positive
attitude at all times in spite of the situation. It is the vision of the leader that drives him.
Without a vision, there will be no mission to accomplish. The vision gives a leader the
drive to seek to achieve results. Through the vision, he establishes the ways and means
of achieving same. He knows when he deviates from the objective. And he knows when
he succeeds.

How Skills can be Acquired

i. Leadership programs: should be introduced in the educational syllabus from

primary school to the tertiary levels. This sort of instruction will inculcate in the
students from an early stage in life the qualities required of them as well as train them
for positions of responsibility whether in the formal or informal sectors of the economy.

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ii. Assumption of leadership positions: the youth should be encouraged into assuming
positions of authority and leadership because there is nothing that can surpass the
effectiveness of an on-the-job training. Often times, those in leadership authorities do
not see the youth as qualified to take challenging roles whether in or out of government.
This could be as a result of the cultural notion which perceives older people as wiser. It
should not be so. Records and research have proven that young men harbour fresh ideas
and ingenuity which often make the difference wherever they go. Putting the youth into
leadership positions is bound to build confidence, resourcefulness and experience for
them early in life. Through such, they can begin to change the society.

iii. Provision of capital for business creation: capital is a necessary requirement for
any venture. Lack of capital or its inadequacy is usually a stumbling block to novel
ideas and initiatives. This factor has proven a problem for young people with
entrepreneurial ideas. To address this problem, the public and private sectors of the
economy should create and implement policies through which young persons can access
loans and other financial services at minimal charges. Such services can be conditioned
on the presentation of plans with certain criteria which must be met before extension of
credits. The over emphasis currently placed on the provision of collaterals is unduly
stifling the entrepreneurial spirit of young people.

iv. Government involvement in all that concerns youths: there needs to be a constant
reaching out to young people, and an involvement in whatever concerns them. The
government, its agencies, non-governmental organizations and corporate institutions
should be seen as showing interest in the affairs of the youth. Policies that will
incorporate the youth as partners in progress should always be initiated, adopted and
supported. There should be a continuous interflow of ideas between these bodies and
the youth. These could be done by involving the youth in corporate workshops,
seminars, lectures, road shows, trainings and other activities organized by these
institutions especially in areas where the interest of the youth is concerned. The youth
should be encouraged to participate actively in such programmes so as to build
capacity, network and skills required to pursue their immediate or future endeavors.
v. Locating skills acquisition centers in the rural areas where the youths are
dominant: since majority of young people in Nigeria live in the rural areas, and since
the government is often concerned about rural to urban migration by young people, a lot
more attention need to be focused on the youth in those areas. Through vocational,
managerial and skill acquisition trainings focused on these people, they will surely take
their future in their hands by becoming experts in their various areas of choice
professions or trade. More so, the allure of migrating to the cities will dissipate if the
rural youth can become an entrepreneur. She will use her skills to further train others
thereby reducing the trend of movement to the cities. This can be achieved by

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willingness on the part of government to initiate and implement policies geared toward
the creation of awareness and re-orientation of rural dwellers on the gains of
entrepreneurship as well as the provision of the basic amenities and facilities required
for such education.