Harnessing the Pool of Potential High-quality Entrepreneurs in Nigeria and Other Developing Countries
An entrepreneur is a person that starts a business, whether or not the person participates in the day-to-day operations of the business. A potential entrepreneur is someone who shows interest in starting a new business but has not yet done so. The success of businesses is dependent on the quality (capacity, knowledge and skills) of the entrepreneur. The quality of the entrepreneur or manager greatly influences management of the business, its productivity as well as the growth-orientation.
The more educated entrepreneurs and managers have shown to have higher quality than their less educated counterparts. Entrepreneurship education and training is as a good means of intentionally growing high-quality indigenous entrepreneurs. Hence, the conception and implementation of the compulsory entrepreneurship education by the Nigerian government in 2006. What were the impacts of the policy on the students? In the first large scale study on the impact of this policy on entrepreneurial interest (EI) and entrepreneurial practice (EP) of students, about 27,000 students from 50 institutions were surveyed over a five-year period (from 2007 to 2011). The findings suggest that Nigeria and other developing countries can greatly harness the potential of their youthful, high-quality entrepreneurs by implementing targeted policies.
Gleanings from the Survey
Entrepreneurial interest: Ninety-seven out of every one hundred undergraduate surveyed had high or very high interest in entrepreneurship. This shows that there is a potentially huge supply of high-quality entrepreneurs in Nigeria. Most of them however lack opportunities for hands-on experience. The most common reasons why the undergraduates are interested in starting their own business are fear of unemployment and market opportunities. Because of their exposure, they see untapped market potentials and they are primed to leverage their human capital development, confidence and large productive social network to escape the grim unemployment situation in the country.
Motivation: Why were students (not) running their businesses? Entrepreneurial interest was the primary motivation for one in three of the students; parents were the motivators for one in five of them; about one in five were motivated by extra income; and about one in ten were motivated by personal fulfilment that comes from solving a problem. For students not yet running a business on the other hand, three out of five were held back by their studies while one in five was incapacitated by insufficient capital.
Gender: EI increased with age while EP and level of EI were barely affected by age. Although, fewer female undergraduate students (than male) showed EI and were less likely to have a business while in school, their level of interest in entrepreneurship (when they show EI) was generally higher than in males.
Marital Status: EI and its level were not affected by marital status. However, the married and divorced had higher EP, suggesting that their experience and family-related responsibilities induce them to have businesses while studying.
Risk: While EI was not linked with the individual’s propensity to take risks, EP was. Students with highest levels of risk affinity were more likely to have a business while in school. This showed the difference between emotions (interests that cost nothing) and reality (practice, which involves investment of time and capital).
Changes over time: While EI slightly increased among students that took the compulsory entrepreneurship course over four years, it greatly reduced among those that did not. This means that the course piqued the interest of some students in entrepreneurship. However, EP greatly reduced among students that underwent entrepreneurship education within the same period, but slightly increased among those that did not. This implies that exposure to the requirements for successful entrepreneurship helped students to evaluate themselves and the prospects of succeeding in business. Hence, apparently only the students that were more confident about their potential for success ended up starting a business.
Proposed Policy Considerations
The foregoing findings hold some lessons for policies that can increase the impact of Nigeria’s compulsory entrepreneurship education policy.
Curriculum matters: An entrepreneurship education content that stimulates EI is inadequate for reinforcing it.
The entrepreneurial education curriculum should be adaptive and more responsive to the needs of undergraduate students. A one-size fits all approach will not serve effectively in stimulating interest and practice among all the students.
Depending on their current attitude towards entrepreneurship, different content may be required for different groups of students. Simply put, different course options should be provided to students based on their baseline (initial) interest in entrepreneurship.
While stimulating EI is a good objective, it is better to have the education reinforce and sustain EI. Even without the compulsory entrepreneurial education, it is evident that Nigerian undergraduates take entrepreneurship courses. It will be more effective if entrepreneurship education initiatives of the government serve to intensify existing interest in entrepreneurship rather than as a means of stimulating interest in it.
Entrepreneurship education policies should also incorporate filtering measures: measures to identify and separate students with higher entrepreneurial success potentials.
Environment matters: Higher institutions should be considered as authentic breeding grounds for future entrepreneurs. The high EI among undergraduates indicate that there is a huge opportunity for creating an ecosystem that stimulates and support entrepreneurship.
It is important to know those who want to be entrepreneurs and to formulate policies that help nurture their interest. These can facilitate the creation of great businesses that can employ the vast unemployed youths in developing countries.
Since access to business capital is important in translating entrepreneurial interest to practice, policies should target removal of barriers to business capital among this demographic.
Structures for EP training while still in school should be provided. These are very important because EI tends to reduce over time when nothing is done about it. University-based incubators, science parks and competitive start-up grants should be explored towards achieving these.
Students’ final year projects (for instance in the engineering and creative arts disciplines) should be galvanized as launch-pads for new businesses.
Considering the motivators for students who already run their business, entrepreneurship development policies targeting tertiary institution students should consider engaging practicing entrepreneurs and parents as instructors and role models for the students.
By formulating and implementing these policies, Nigeria would have harnessed its pool of potential high-quality entrepreneurs, translating their interests into viable businesses that employ the teeming youth population. Other countries with similar development profile as Nigeria can learn from this.
This article is based on:
Olofinyehun, A.O., Adelowo, C.M. and Egbetokun, A.A. 2018. The supply of high-quality entrepreneurs in developing countries: evidence from Nigeria Science and Public Policy, 45(2), 2018, 269–282 doi: 10.1093/scipol/scx065
See also: Three lessons from Nigeria on how to boost youth entrepreneurship