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UTILIZATION OF INFORMATION AND COMMUNICATION TECHNOLOGY TO ENHANCE ENTREPRENEURSHIP

10,000 3,000

SOUTH-EAST, NIGERIA AS A CASE STUDY

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CHAPTER   ONE

 

INTRODUCTION

Background of the Study

Entrepreneurship stirs up ideas that could enhance enterprises. This perhaps informed why entrepreneurship is fundamental to generating new ideas and developing new business opportunities (Shanghai, 2001). Ayeduso in Osuala (2004) stated that while the word entrepreneur describes the person or the actor, entrepreneurship talks about the actions, efforts, abilities, skills, processes or sometimes the business unit itself. Following the same opinion, Inegbenebor (2006) said that entrepreneurship is about learning the skills needed to assume the risk of establishing a business. It is about developing strategies and executing them with all the vigour, persistence and passion needed.   According to him, preparing for entrepreneurship focuses on attitude and skill formation for the identification of economic opportunities, feasibility analysis, business planning and making arrangements for the sustenance and growth of the enterprise. Similarly, the Small and Medium Enterprise Development Agency (SMEDA, 2004) stated that entrepreneurship develops when a person organizes and manages a commercial undertaking. SMEDA also noted that entrepreneurship combines strong character of diligence, innovativeness, readiness to take risk, ability to sense opportunity, ability to mobilize human and material resources, being goal-oriented and focused, preserving and dogged for growth and excellence. Entrepreneurship is certainly critical in economic transformation. Entrepreneurship, according to Ray, Adams and McMilliam (1990) is being able to discover innovations that can  enhance marketing of goods and services, create enabling business environment, staff training and deal with barriers to growth.

To define enterprise, Hyper Dictionary (2009) stated that enterprise is a purposeful or industrious undertaking, readiness to embark on bold new ventures and an organization created for business ventures. In Nigeria, as in other countries, many variables have been applied by agencies in the classification of enterprises. Eneh (2005) recognizes micro, small, medium and large scale enterprises. His classifications includes the size of   employees, the amount of capital investment, annual sales turnover, total assets or a combination of these to classify enterprises. Medium scale enterprises are those with over 50 million Naira but not more than 200 million Naira or 101 to 300 workers. Obitayo in Eziama (2003) asserted that small-scale enterprises possess a total investment of between one hundred thousand and two million naira. Similarly, Osuala (1993) viewed a small-scale enterprise as any manufacturing or serving industry with a capital investment not exceeding N150,000 in machinery and equipments and employing not more than fifty workers. Again Inegbenebor (2006) stated that micro or cottage industries are those with one and ten workers, small scale industries with eleven and hundred workers, medium scale enterprises with one hundred and one and three hundred workers while large scale enterprises are with three hundred and one workers and above.    Eneh (2005) said that most enterprise jobs are in the service and manufacturing sectors. They include soap makers, bakers, furniture makers, leather makers, printers, welders, vehicle repair and maintenance, electrical services, fashion designers, hotels, banks, textiles, plastic and pharmaceutical enterprises.

Emphasizing on the importance of enterprises, Eneh (2005) stated that it is indisputable that enterprises hold the key to national economic development because they create jobs, wealth, alleviate poverty,  promote equity, social security, encourage the culture of self–help and self–reliance. He added that they promote enterprises, productivity, provide opportunities for careers and skills development as well as rural and community development. Similarly, World Bank International Finance Corporation Report in United Nations Development Programme (UNDP, 2007) maintained that enterprises are important because on the average, enterprises comprise over 95 percent of the economy, the contributions of the enterprise to employment and the countries’ gross domestic product (GDP) are by no means trivial. UNDP still reported that close to 140 million enterprises in 130 countries employed 65 percent of the total labour force. Enterprises are the frame work for economic growth and innovation. Moreover, Ike (2004) noted that enterprises respond positively to social and free markets, creativity, innovation, promotion of individual and group initiative, self-reliance and above all self fulfillment.

As affirmed by Ecorys (2007) whether enterprises be multinational, large or not, the nature and the growing importance of the competitive advantage afforded by new technology, together with trade, capital liberalization and growing pressures of competition are forcing enterprises to exploit both technological knowledge and markets on an international scale. Entrepreneurship gives rise to innovations. Nagy (2003) pointed out that investment in Information and Communication Technologies (ICT) and use, can affect innovation. ICT according to UNDP (2001), refers to the full rang of electronic technologies and techniques used

to manage information and knowledge. In this study the term ICT is not referring to all the media currently available but more restrictedly to the recent computer technologies, internet, computer and cell phones.

ICT have become the modern-day strategy to capture the market because of the potentials it can offer to enhance entrepreneurship. ICT has enormous potentials to assist economies in achieving specific economic development goals. ICT has the ability to improve communication and enhance the exchange of information and the role of communication in the success of any enterprise cannot be overemphasized. As identified by Itegboje, Adigun and Oyeyinka (2001):

Communication is the soul of business. It is the life wire of every organization. Communication is a process by which an individual, group or organization shares information with another for a definite purpose. In business management, communication makes it possible for important processes and functions such as planning, organizing, leading, supervising, decision-making, delegating and motivating. p.307.

 

They maintained that communication involves budgeting, negotiations, representing and controlling. Through the internet, the computer has made business communication in various forms possible. Internet is meant for communication both within and across national boundaries. The internet according to Patton (2001) is a world-wide communication matrix that provides users with access to electronic mail, news, training, instruction, maps, computer files, games and countless volumes of information on virtually any subject. The internet even links customers to commercial web sites where one can compare and buy products without leaving home.

ICT has a great role to play to enhance entrepreneurship. Bartelsman and Hinloopen (2002) pointed out that the use of ICT could have several impacts on productivity. It might help more productive enterprises gain market share. The use of ICT may help enterprises expand their product range, customize the services offered or respond better to client demand and to innovate. Moreover ICT may help reduce inefficiency in the use of capital and labour by reducing inventories. All these effects might lead to higher productivity. Investment in ICT might also have benefits going beyond those accruing to investors in ICT. Bartelsman and Hinloopen (2002) further stated that the diffusion of ICT may help establish networks, which produce greater benefits which is spillover effects, the more customers or enterprises are connected to the network. The spread of ICT may reduce transaction costs which could lead to a more efficient matching of supply and demand and enabling the growth of new markets.  Increased use of ICT may also lead to greater efficiency in the creation of knowledge. Where such spillovers exist, they raise overall multifactor production (MFP) growth.

Furthermore, the Organization for Economic Cooperation and Development (OECD, 2000) pointed out that much is being done to improve the environmental performance of industry through policies which induce reductions in general burden of taxation, and cost of essential services.  Comparatively, smaller enterprises, tends to be less aware than larger firms of environmental externalities and of the legislation that governs their activities. Besides, these smaller enterprises have fewer resources to invest in environmental improvements and management tools that could make their operations more sustainable. According to them, enterprises can fill market niches in the development and sale of environmental goods and services.  It becomes a formidable challenge to involve the full range of enterprises in working towards sustainable solutions. This is where the ICT advances come in to provide the  means for governments and other stakeholders to reach, inform and influence enterprises.

Existing literature has proven that ICT, if well used for training has potential to aid

materials to be presented in multiple media for multichannel learning. It  motivates and engages learners in the learning process,  brings abstract concepts to life and enhances critical thinking as well as other higher levels of cognitive skills and processes. ICT in training provides opportunities for learners to practice basic skills on their own time and at their own pace while  allowing  them to use the information acquired to solve problems  within their environment.  Access is thus  provided  to world-wide information resources for instructors and learners alike, a platform for large scale information interchanges and research development beyond geographical boundaries,(Haddad and Draxler 2001).

 

Furthermore, Love and Irani (2001) said that enterprises could often experience barriers through lack of human technological resources needed for ICT and e-commerce.  Especially when enterprises have to focus on day-to-day operations and lack the time and extra resources necessary to understand the benefits of new technologies. Even if they are aware of the potential benefits of adopting ICT, they would still require know-how or qualified personnel to enhance entrepreneurial operations. They claimed that enterprises may also lack managerial understanding and skills for e-business. Successful integration of e-business requires many enterprises to restructure their business processes, to change organizational structures and to redefine their core competence and positions in value chain. The professional advice of Information Technology (IT) and e-business consultants could help them but enterprises may not easily have ready access to them because of their relatively high costs.

As pointed out by Agbonifoh (2006) e-commerce is an on-line buying and selling of goods and services via the computer without leaving the comfort of their homes or offices.  E-business is used to describe businesses run on the internet or utilizing internet technologies to improve the productivity or profitability of a business.  This function of e-business is referred to as e-commerce and the terms are used interchangeably.  Also, the Information Technology Association of America (ITAA 2005) said that IT is the study, design, development, implementation, support or management of computer-based information systems, particularly software application and computer hardware.  It deals with the use of electronic computers and computer software to convert, store, protect, process, transmit and securely retrieve information.  When computer and communication technologies are combined, the result is information technology.

As aptly pointed by UNDP (2007) ICT enhance enterprises efficiency, reduce costs and broadens market reach both locally and globally. The uses of ICT are increasingly transforming modern business by enabling the rapid, reliable and efficient change of large amounts of information. Access to and the use of ICT by enterprises will lead to greater job creation, increase public revenue and a general rise in the standard of living. Furthermore, ICT offers enormous opportunities to reduce social and economic inequalities, particularly those related to income generation, poverty reduction, education, health, environment and gender equality and thus helps to achieve broader development goals.

Panos (2010) stated that ICT – based knowledge and products contribute directly to wealth creation. Through this knowledge entrepreneurs use ICTs in a number of ways by substituting phone calls for travel, which saves time and money and using ICTs to obtain information on prices for their own produce and purchases.   Duncombe and Heeks (1999) opined that ICTs have done the most to reduce costs, increase income and reduce uncertainty and risk. Phones support the current reality of informal information systems, they can help extend social and business networks. They clearly substitute for journeys and in some cases for brokers, traders and other business intermediaries.

Donner (2006) said that the internet remains a great place to gather information about competitors, find new products, communicate with customers via e-mail, order supplies, advertise and to conduct a myriad of other formal business process. These functions are spreading now to the developing world as a range of factors such as multilingual websites, increasingly reliable connectivity, revised e-commerce regulations, and a growing density of users make internet – enabled businesses more realistic. In these various ways ICTs can enhance entrepreneurship unlike typewriter used in business which can perform limited tasks to improve business efficiency.

Anyanwu in Okpoko (2004) reported that computer has contributed substantively to the socio-economic and human development of all industrialized and developed countries of the world. In developing countries the impact of ICT is gradually being felt especially in urban areas. The rapid advancement of ICT developed during the last two decades of the twentieth century has continued to change both the information and communication system in human enterprises and in the daily lives of the people. Despite the potential contributions of ICT to enhance entrepreneurship, there are still obvious disadvantages of none utilization of ICT in business. The absence of ICT in business will lead to poor marketing of product, lack of access to information and collaboration among entrepreneurs in the business world.  Jide (2009) has rightly pointed out that the disadvantages of lack of ICT skills need  in Nigeria makes the need for ICT user, professionals and skills more crucial now than ever. The enormous disadvantages are hindering the effectiveness of ICT. Though digital literacy has become a necessity for all but it may be that majority in Nigeria lack basic ICT user skills. Agbonifoh (2006) has remarked that the word computer still elicits different reactions from managers of private enterprises. Each person’s reaction depends on the degree of computer literacy.  For those who are literate in computers, the term conjures a world of clamoring opportunities waiting to be explored.  They see in the computer, not only opportunities for word processing without tears and do it yourself desktop publishing of leaflets, posters, pamphlets and books, but also an avenue for fast-paced world-wide communication on the world of information highway. Further, the computer offers opportunities for simple and complex analysis of data, massive information storage and retrieval and access to virtual libraries on world-wide web.  While some managers are carrying on as though the computer is not meant for them, others still rely on manual typewriter, manual storage, retrieval and processing of data and files.

In the same way, Igwe (2005) portrayed two critical issues, confronting the utilization of ICT to be illiteracy and inadequate educational opportunities in Nigerian educational system. On the other hand Olubamise and Jide (2007) opined that communications quality is low and ICT penetration is still insufficient considering Nigerian’s size and population, the cost of broadband is still a barrier, poverty, lack of awareness and access  excludes the poor, rural dwellers and private enterprises from ICT. Even if a determined entrepreneur manages to survive, there is still the problem of finding a reliable e-commerce infrastructure that will safely and reliably handle the electronic transactions without viewing the seller from Nigeria as high risk.  There have been limitations on what one can buy online. There are rigours associated with online shopping systems and the restrictions in the global market(Ovia,2007).

ICT skills can be impacted to the adult managers through adult education which serves as an up grader. Crompley in Ugwoegbu (2003) stressed that one of the quickest ways that productivity can be improved in countries that are less developed is to make sure that adults are trained when they are already on the job. This is to help adult population to adjust to a rapidly changing world.  In the same way Lowe in Ugwoegbu (2003) observed that adult education adopts the posture that education is life not necessarily the preparation of an individual for the unknown. This is why in adult education, attempt is made always to mobilize, train and educate available manpower for their immediate improvement and utilization.  In the same view UNESCO in Ihejirika (2007) pointed out that adult education is a component of life-long education which begins in the cradle and ends in the grave. The concept arises out of the awareness of  rapid changes in technology and institutions which in turn require human beings to update their skills and knowledge in order to catch-up with modern events. Programmes geared towards life-long education help the individual adults. Part of the goal of life-long education is to offer adults broad opportunities for self-renewal and social advancement.  Supporting the above view Anyanwu (1987) pointed that adult education affects our economy in a number of ways. Not only does it increase the flow of skills but assists people to acquire new techniques such as ICT. It helps people to destroy the traditional attitude that impede progress and at the same time links knowledge with methods of production. In recent times, it has been noted that traditional crafts are dying away. As a result people need to be taught basic knowledge which will enable them to learn about modern production methods and how to adapt themselves to these changing techniques which appear during adulthood. In the same vein Eyibe (2005) noted that the training and retraining programmes in adult education will enable the adult learners acquire relevant skills to do the productive work in the society. This is because this training and retraining programmes are aimed at occupational training and retraining in vocational, technical, agricultural and entrepreneurship skills. The objective is to prepare participants in self-employment, entrepreneurship system or wage employment in factories or industries. Moreover, David in Ihejiribka (2007) opined that adult education must be continuing as a means for each individual to improve the insufficient education received during his compulsory schooling. It must be a continuous process of adaptation of worker’s training to technological changes and the resultant increase in the minimum of knowledge required. It is continuing as an opportunity provided each citizen to assume widening responsibilities with ever increasing competence. It is continuing as a factor for promoting personal affirmation in a society in which all roads are open to the worker for a better, finer and more cultural life.  Also Hebborn (2010) posited that the concept of continuing education and training encompasses an emancipator function. Continuing education contributes significantly both to ongoing individual development and to a sustainable future for the economy and for society as a whole. It ensures the progressive acquisition of know-how, skills and qualifications, while fostering new vocational orientations against a background of changing occupational biographies. Moreover, continuing education is an important factor for the economic development of a region and its attractiveness as a location for business.

For Nigerians to be employable and entrepreneurial the demand is not degree or qualification but innovative people who can contribute meaningfully to the economy and society. It is against this background that this study seeks to find out how the utilization of ICT has enhanced entrepreneurship in South-East, Nigeria.

 

 

Statement of the Problem

In the past entrepreneurs use obsolete but cheaper technologies such as typewriter and cyclostyling machines which are now filled with disadvantages in the present day of information and communication technology. These has  negative implications for  boosting of entrepreneurial skills. For example, with the use to this technologies error correction, communication, document scanning and formatting are not possible.

However with the advent of ICT it has been found that entrepreneurial skills are facilitated. ICT has great potentials in enhancing skills of entrepreneurs.  It has facilitated training through on-line learning and helped in the area of enhanced business environment.  To scan, organize and store documents are possible with computer but not with the old technologies used in business by entrepreneurs.  According to Chris (2012) the growth of personal computer and computer networks continues to impact businesses both large and medium. Through computer and internet connection entrepreneurs can perform administrative tasks like paying your business bills on your computer, as well as marketing your business online, e-mail and instant messaging allow for easy communication. Moreover Uchegbu (2002) pointed out that the introduction and use of internet has caused an important revolution in communication and that is capable of improving the way we communicate, study, contract and transact business. This progress in business in noted as a result of progress in the ability to link up computers.

Despite these obvious advantages opinions from the background of this study still show that entrepreneurs are not yet taping the benefits of ICT in enhancing their skills.  These are however opinions and there is need to verify the authenticity of the opinions. It is therefore the problem of this study to verify the extent of utilization of ICT to enhance entrepreneurship in South-East, Nigeria.

 

 

 Purpose of the Study

The general purpose of this study is to determine the extent of utilization of ICT to enhance entrepreneurship in South-East Zone. Specifically, the study sought to:

  1. Determine the extent to which entrepreneurs of medium and large scale enterprises utilize ICT to create enabling business environment.
  2. Find out the extent to which entrepreneurs of medium and large scale enterprises utilize ICT in enhancing marketing of goods and services.
  3. Determine the extent to which entrepreneurs of medium and large scale enterprises utilize ICT in staff training.
  4. identify the barriers to utilization of ICT by managers of medium and large scale enterprise to enhance entrepreneurship.

 

Significance of the Study 

This study is of great significance to private enterprises because the finding would provide data that would make managers to became producers and creators in high value areas of knowledge economy. The managers would be drivers and not consumers in the global digital economy. It would expose the staff to new ways of working in the enterprise.

Government would understand the need to be proactive in exploiting ICT for enterprise development. The government and international funding agencies would be interested in general development of ICT in higher institutions.

Educational institution would also find that the study would benefit them in that it would expose the challenge of globalization and information age for the transformation of the academic system from traditional role of teaching, learning, research and development methodology, to ICT application which is the latest revolution changing all aspects of human endeavour.

The study will enable adult education administration fill the gap of ICT knowledge in the society through continuing and life long education. The findings of this study will have significant effect on the way people live, work and play in the society.

Finally, future researchers would also benefit by identifying further areas to explore in ICT.

 

 Research Questions

The following research questions guide the study:

  1. To what extent do entrepreneurs of medium and large scale enterprises utilize ICT to create enabling business environment.
  2. To what extent do entrepreneurs of medium and large scale enterprises utilize ICT in enhancing marketing of goods and services.
  3. To what extent do entrepreneurs of medium and large scale enterprise utilize ICT in staff training?
  4. What are the barriers to the utilization of ICT to enhance entrepreneurship by entrepreneurs of medium and large scale enterprises in South-East Zone?

 

 

Hypotheses

The following null hypotheses were formulated to guide the study at 0.05 level of significance.

  1. There is no significant difference in the mean rating of entrepreneurs of medium and large scale enterprises on the extent to which ICT are being utilized to create enabling business environment.

2    There is no significant difference in the mean rating of entrepreneurs of medium and large scale enterprises on the extent to which ICTs are utilize in enhancing marketing of goods and services.

  1. There is no significant difference in the mean rating of entrepreneurs of medium and large scale enterprises on the extent of utilizing ICT in staff training.
  2. There is no significant difference in the mean rating of entrepreneurs of medium and large scale enterprises on the barriers to utilization of ICT.

Scope of the Study

The focus of the study is on utilization of information and communication technology to enhance entrepreneurship in South-East, Nigeria.  This study covers the registered private enterprises in South-East, Nigeria.  The study focused on utilization of ICT  to create  enabling business environment, enhancing marketing of goods and services through ICT, utilization of ICT in staff training and barriers to utilization of ICT.  The

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