Contribution of Small and Medium Scale Enterprises Essay

Introduction The production of goods and services in the most efficient manner has continue to be the only viable and alternative for development of small scale enterprises in Nigeria and for the development, growth and survival of any economy. The development of small scale enterprises not only contributes significantly to imposed standard, they also bring substantial local capital formation and achieve high level of productivity. Small and medium scales are crucial to the development of all economies of the world. They are the modern day’s incubators of job opportunities, they provide the way for developing local technologies, raw materials and serve as the foundation of self-reliance to many countries of the world. Small and medium enterprises predominate all over the world with labor intensive method of production. The operation of small and medium enterprises not only requires less capital per worker, but also per unit labor added. Hence, cost industrialization and industrial job are not high SME’s offer the most efficient form of business. The definition of small and medium enterprises tends to differ among countries. Thus there is no universally accepted definition. This arises from difference in industrial organization of the countries at different level of economic development in part of the same country. It is also important to recognize that the definition change over time. For the purpose of this research however, small and medium scale enterprises is defined as a term used broadly to cover industries consisting of small firms ranging from household and cottage establishment to medium sized industries that are not large enough to be classified as large. In other words, small and medium enterprises are classified as enterprises embracing factories, farming and non-farming organization ranging from household to cottage enterprises. Small and medium scale enterprises are a dynamic, growing, profitable and innovative sector. It is in recognition of this that the government over the years initiated various programmes to address this crucial issue. If the strategies used where appropriate and relevant, entrepreneurship and SMEs would have striven in Nigeria thereby, contributing optimally to individual wellbeing and the economy in general. Suffice it to say that the strategy of industrialization with focus on large scale business has proved inadequate and of serious socioeconomic and environmental consequences. This therefore calls for redefinition of strategies to correct the imbalances in economic development policies. STATEMENT OF THE RESEARCH PROBLEM Despite the abundant human and material resources, Nigeria has failed to develop into economic to be reckoned with from within and outside world, partnership sprits in Nigeria is at its infancy, partners in many small scale enterprises pursue individualistic goals at the expense of the overall interest of the SMEs, consequently mortality rate among SMEs is high as a result of mistrust that often develops among the owners. Beside poor partner spirit, regulatory environment, policy instability and reversals, inadequate infrastructure etc. and the misused of resources have led to the country losing it position of a promising developing nation to that of underdeveloped status. Small scale enterprises was made possible to assist and encourage Nigerians toward setting up small scale industries for the realization of self-reliance and rapid growth of the Nigeria economy PURPOSE OF THE STUDY This research attempt to analyze the role of small and medium scale enterprises in achieving economic growth and development through generating employment for youth in the country. Nigeria is endowed with the population reside both in rural and urban areas with no employment and low income. Genuine encouragement of the populace to use their own initiative to set up Small and medium enterprises, using the local raw materials and technology will have a positive impact on the socioeconomic of Nigeria and thus help in alleviating the problems of unemployment. SIGNIFICANCE OF THE STUDY The role of small scale enterprises in the overall economic development is well recognized in every economy. This is because of the role the sector can play as a source of gainful employment. More than ever before, the country needs to fine tune its industrial policy to align it with development strategies so that small scale enterprises could compete favorably with the product of emerging economies. The significance of this study therefore lies on the importance the government of Nigeria attached to development of small scale industries and the study will be useful to policy makers in taking decisions which affect small and medium enterprises. This study will also serve as a blue print for the government, entrepreneurs and students alike in understanding the economics of small and medium scale enterprises. In the past various policies and measures were taken by successive governments in an attempt to foster development via small scale establishments, but most of them failed. This is because there is lack of clear understanding of the actual problems that hinder or retard the development and growth of small scale industries. Therefore, this study with the definite explanation and precision about problems will help government to make necessary adjustment in making policies or taking certain measures to improve small scale industries in the country. It is therefore intended that the findings and recommendations of this study will enable the owners of small scale enterprises, future potential enterprises as well as the both similar bodies to assess the importance of small scale enterprises toward economic development, how to establish, manage as well as fund and identify areas of their survival thereby achieving the objectives of establishing them. AIMS AND OBJECTIVES The main aim of this study is to examine the broad spectrum covered by the small and medium scale enterprises, their survival in relation to youth and employment generation The broader specific objectives are as follows: 1.To analyze the contribution and impact of small scale industries to Nigerian economy 2.To examine the problems which hinder the impact 3.To assess the role of developmental policy program of small scale enterprises undertaken in Nigeria. In a nutshell, this research study is to assess the performance of policies on small scale enterprises and its impact on youth and employment generation. SCOPE AND LIMITATIONS OF THE STUDY This study is an assessment of the role of small and medium scale enterprises in general and its contribution to youth and employment generation in Nigeria. Writing a research of this nature cannot be done without some limitations; Data has to be collected from a reasonable number of respondents. However, some information may be missing, looking at the numerous numbers of small and medium enterprises. Bearing in mind that, the business world in the developing countries is rigid in revealing certain information which they regard as secret. The research shall be limited to areas where entrepreneurs are willing to give necessary information needed. In addition to this problem, there are also problems of limited official statistics on the number of small and medium scale enterprises, their size, and range and how they operate. As a student, time, financial constraint, lack of cooperation on the part of entrepreneurs, hastily response to questions which may reflect adequate information couple with the respondents lack of understanding and appreciation of the research topic may affect the effort to the validity of this research work.