An empirical study of the disparity between small businesses and entrepreneurship in Developing Economies.

Abstract

Entrepreneurship has been recognized globally as the catalyst of economy growth and job creation. Though the term entrepreneurship has been in existence for many years, people hold different views regarding small businesses and entrepreneurship. In view of this, the trend in most developing economies is to use small businesses and entrepreneurship interchangeably which has made it difficult to harvest the gains of entrepreneurship. Thus this study investigates the disparity between small businesses and entrepreneurship in a developing economy. Deriving from previous research, this study draws on Schumpeter’s entrepreneurship theory of innovation to develop the argument that entrepreneurial innovation is a new combination that distinguishes between small businesses and entrepreneurship. The objective is to present empirical findings and related literature to clarify the activities going on in the developing economy of Nigeria as to whether they are mere small business activities or entrepreneurship. The quantitative approach was employed with the survey method using a questionnaire for data collection. The sample frame is all registered micro and small manufacturing and retail firms in the North Central region of Nigeria. A census-based method was employed for the 450 registered firms in order to obtain a robust result. The data were analyzed using descriptive statistics and Pearson-moment correlation analysis to establish the strength of the relationship between the variables. The findings reveal that majority of the respondents perceived small businesses and entrepreneurship as synonymous even when the small businesses activities are not entrepreneurial. The study concluded that there is a strong correlation between small businesses and entrepreneurship. The study recommends an intensive enlightenment campaign by Corporate Affairs Commission (CAC) using media platforms and slogans to sensitize the masses on entrepreneurship as different from small businesses. CAC in collaboration with the Small and Medium Enterprise Development Agency of Nigeria (SMEDAN) should organize training and workshops for businessmen and practitioners regularly in order to re-orientate them on the principles and practices of entrepreneurship. Finally, education at all levels should be reinforced along the line of entrepreneurship by policymakers.