Barriers To Entrepreneurship | Concept/misconception
Entrepreneurship has been identified as the vehicle of economic development and the major creator of job opportunities. The industrialization countries of the world depend in the entrepreneurship and indeed entrepreneurial activities to check unemployment and to improve the standard of living of her citizens.
In Nigeria, the level of unemployment and the general lack of middle class citizens are attributed to lack of entrepreneurship which has orchestrated the absence of entrepreneurs. It is therefore, necessary that the barriers to entrepreneurship are discussed, the knowledge of which will arouse interest and create passion for entrepreneurship. The barriers to entrepreneurship include but not limited to the following;
Barriers To Entrepreneurship
- The Misconception of the Concept
The concept of entrepreneurship is grossly misconstrued in Nigeria. Each time entrepreneurs are mentioned in Nigeria the average mind goes to sole proprietors, petty traders, artisans, transporters, tailors, eatery centres owners, vendors, bakers, small-scale business owners and so on. The implication is that whoever wants to go into business is interested in offering what others have offered without scanning the environment to find virgin areas of investment.
People provide what has been offered not necessarily what the market needs. Entrepreneurs, however, are dealing with uncertainty about the profitability of their new combinations of resources. Since entrepreneurs cannot insure against the profitability that new goods and services will fail, entrepreneurs bear the burden of the uncertainty associated with the market process. Guys like Schumpeter .J. and Israel .K greatly advanced our understanding of the role of the entrepreneur as an innovator.
To Schumpeter, an entrepreneur is someone who finds new combinations of resources and creates products that did not previously exist. From a Schumpeter view, the entrepreneur is a disruptive force in an economic progress. In addition to stressing the disruptive role of entrepreneur, Schumpeter differential between innovators and creditors.
Innovators serve the creative function while creditor serve the finance function. Israel K is of the view that entrepreneurship stands in some contrast to Schumpeter’s. Instead of focusing on the dis-equilibrating role of the entrepreneur, Israel K. views entrepreneur as an equilibrating force in which entrepreneurs discover previously unnoticed profit opportunities and act on them, bringing market towards their zero economic profit, long-run equilibria.
Thus Kirzner’s arbitraging entrepreneurs initiates a change that moves a market towards equilibrium, rather than disrupting an existing equilibrium as does Schumpeter’s entrepreneur. Uoicombe attempts to bring together the Schumpeterian and Kirznerian view by explaining that a Schumpeterian innovation such as the instruction of automobile creates multitudes or new profit opportunities in areas like auto accessories and fuel delivery that are there to be exploited by Kirznerian entrepreneurs.
Borne out of that, entrepreneurship is a process of generating sound investment ideas while those who generate the rare ideas and take them to the industry where values are infused are entrepreneurs. In Other words entrepreneur is all about ideation and their application investment ideas. Entrepreneurship is indeed that art which involves recognizing a business opportunity, mobilizing resources and persisting to exploit that opportunity. Arising from these views is the fact that what differs across areas is not the degree of underlying entrepreneurial spirit, (potential) but instead how that spirit (potential) is channelled.
Entrepreneurial potentials abound in Nigeria but these potentials are misappropriated because of how entrepreneurship is conceptualization, society values and orientations. True entrepreneur is the creative or innovative aspect of business formation not the financial component.
- Inadequate Infrastructural facilities And Power Supply
Another Barrier to entrepreneurship development in Nigeria is the inadequate infrastructure facilities that create rooms for smooth running of businesses. The banking sector is battling for survival and as such does not offer much to astute investor except in the areas of lending at very high interest rates. The level of development of the insurance sector is pathetic in that most entrepreneurs either do not understand what insurance stance for or perceive it as fraudulent. There are few advertising consultants and agents and as such the cost of advertising is so high.
Warehouses are not available in major cities as a result of high cost of residential accommodation. The transportation system gives much concern to the entrepreneurs. Movement of equipment, raw materials or finished goods from factories to demand increases cost of production more than expected. The dysfunctional nature of the railway system is not helping entrepreneurs and entrepreneurial activities difficult.
Entrepreneurs are forced to use their working capitals to provide alternative means of power supply. Most entrepreneurial activities their require constant power supply are jettison because the cost of providing power is high. Yet another barrier to entrepreneurship is the total lack of venture capitalist. A venture capitalist is one who has money, is able to properly evaluate the feasibility study and viability of any identity one independently. He therefore, partners with those who are able to identify one independently.
He, therefore, partners with those who are able to identify feasible and viable opportunities with sole aim of sharing in the profit or loss. Though he helps to finance the business, he is not a money lender who asks for interest. The interest of the capitalist is to be a co-founder not just a shareholder in the business.
Celebration Of fraudsters
The Nigerian society is fond of celebrating people whose source of wealth is doubtful. Politicians who embezzled themselves through misappropriation of public fund are celebrated. Civil servants that have enriched themselves through misappropriation of public funds are crowned statement. In fact the culture of celebrating wealth got through zero instrument makes entrepreneurial pursuit unattractive.
In all it has become necessary that entrepreneurs including budding ones are constantly abreast of the happenings in the environment if they must not lose sight of business opportunities in their chosen areas of business. Equally important is the desire to scan the environment bearing in mind the SWOT issues as well as the proper conception of entrepreneurship.