Analysts’ have come to realise that entrepreneurs are the backbone of modern economies. It is their important contributions that help society grow as a whole. One of the reasons the United States is such a dynamic, innovative, and prosperous nation is because of the numerous business entrepreneurs that take their ideas to the next level regardless of the risks involved. Entrepreneurs create jobs and innovate and grow the economy.
The creativity and impact of U.S. Entrepreneurs was clearly acknowledged in president Obama’s 2010 state of the nation address; he stated:
“Now, the true engine of job creation in this country will always be America’s businesses. But government can create more workers. We should start where most jobs do. In small businesses, companies that begin when an entrepreneur takes a chance on a dream, or a worker decides his time, he became his own boss. Through sheer grit determination, these companies have weathered the recession and they’re ready to grow.” Obama
The millions of small and medium sized firms started by Entrepreneurs provide the innovations and create jobs intrinsic to economic growth and development. Many goods and services we take for granted were introduced by entrepreneurs: Telephone service, the automobile, the airplane, air conditioning, the personal computer and accompanying software, were all invented by them.
According to Schumpeter (1975) capital and output growth in an economy depends significantly on the entrepreneur. The quality of performance of the entrepreneur determines whether capital grows rapidly or slowly, and whether the growth involves innovation where new products and production techniques are developed.
The difference in economic growth rates of countries is largely due to the quality of their entrepreneurs. Factors of production, land, labour and capital, will lie dormant or become indolent without the entrepreneur who organises them for productive ventures. The entrepreneur is, therefore, an important agent of growth, innovation and technical progress.
China’s explosive economic growth over the past 25 years is due largely to removing ownership, bureaucratic, and financial limits on the entrepreneurial drive of the Chinese people. At the heart of other rapidly growing economies such as India and Brazil are numerous Small and Medium scale manufacturing, retail, IT, technical, and financial firms.
In the United States, the world ‘s biggest economy, 75% of the 16 million businesses are run as sole proprietorship (entrepreneur.com). The U.S. Small Business Administration recognizes that ‘small business is critical to our economic recovery and strength, to building America’s future, and to helping the united States compete in today’s global marketplace.
In many developing countries, including Nigeria, small and medium enterprises run according to the visions, talents, opportunities and resources of entrepreneurs and are known to bring about employment creation, provide jobs for women and youth, spread the returns of economic development, help develop rural areas, mobilise domestic savings for investment, inculcate new skills and infuse new technology, and contribute to social and political stability.
As Nigeria pursues various economic development plans including the National Economic Empowerment and Development Strategy (NEEDS), the millennium Development Strategy Vision 2020, a core part of the national strategy must be to grow and strengthen the vibrant elements of the MSMEs, largely informal, business sector.
As a nation Nigeria, and Africa as a whole, must not afford not to invest in MSMEs. Their economic future depends on it. The comments and policy commitments of President Paul Kagame of Rwanda should be noted. He has declared “Entrepreneurship is the surest way” for Rwanda and Africa to develop. Kagame tells us:
In the old Rwanda, everyone looked for a job in government because of the benefits and the security. But nowadays they are thinking that the private sector holds the promise of a better life for their families and themselves.