CHAPTER ONE

INTRODUCTION

BACKGROUND OF THE STUDY

The term business, has over the years turned out to be a house hold name.  In different places and under different circumstances, people have tended to give the term “business” different definitions and meanings.  However, it is also important to note, that in some instances, the dimension and size of an organization or an enterprise can determine the order of its definition.

            In some instances, business can be regarded as the performance of the entrepreneurial function of co-rdination of all the factors of production – labour, capital, natural resources and management to provide goods and services which may be sold at a profit.

            It therefore follows that business entails the proper coordination of the various factors of production with a view of utilizing them in the production of the necessary goods and services in order to maker prodit.

            Business enterprises have also been identified to operate of the basis of different levels and capabilities.  These ranges from small privately owned enterprises to large organizations that are either privately or publidy owned.

            Based on the above definition of business, one would understand some basic issues.  This include the fact that business are organized with the purpose of making profit.  Therefore in essence, a good business venture is one in which is geared towards profit making.  Therefore in a qust to make profit, the business organization must surly operate in an existing environment.

            Having said that established the fact that most business establishments are geared towards profit making and at the sarve time that business organization exists within an environment, it will be wise to say that the environment of any business venture surly contributed to the success or failure of such a business.

            Based on this, it is wise to examine on the other way round if there is any role the business organization on their own part does for the environment.  This assentron will for the bedrock of this study which centers on examining the role of small and medium scale business enterprises to the economic development of the economy with emphasis on Enugu state.

 STATEMENT OF THE PROBLEM

The import of entrepreneurial resource as a crucial input process of material development is becoming widely recognized, with growing emphasis on the role of small and medium scale enterprises in view of their contribution to general economic growth. (Ezeh 1998) Observed that, even where there are incentives and inducements, it is found from experience that entrepreneurs do not respond spontaneously to available business opportunities.  This according to (Makinde 1999) can be attributed to inadequate intrastructural facilities and lack of access to bank credits.  However, in most cases this is attributed to the low economic activities within the economy.

It is thus against this backdrop that the researcher intends to find out the impact of the small and medium scale enterprises towards the economic development of the economy, with emphasis on Enugu state.

STATEMENT OF RESEARCH OBJECTIVES

One of the objectives of this study is to find out if small and medium scale enterprises in Enugu state have any effect on the economic development of Enugu state economy.

Having noted that Enugu state is one of the environments in which there is the existence of small and medium scale enterprise.

More importantly, the study is also directed at ascertaining of the effect of the small and medium enterprises in Enugu state is positive or negative oriented.

 SIGNIFICANCE OF THE STUDY

The study intends to analyze the small and medium scale enterprise in Enugu state with respect to their contribution to the development of Enugu state.

            The study will help in a proper understanding of the role and effect of small and medium scale enterprises on an economy.

            It is hoped that this research work if properly and adequately done to its logical conclusion will enable policy makers and manyers understand the impact and the nud to encourage the establishment of small and medium scale enterprises in Enugu state as well as the other states of the federation.

 The study will help policy makers and business men and women to appreciate and evaluate the impact of small and the medium scale enterprises.

            Finally it is hoped that this study will benefit feature researchers in this area of study and also help every Nigerian appreciate the small and medium scale venture in Enugu state and Nigeria.

 RESEARCH QUESTION

To be in a very good position to tackle the problem environmental in this study, a number of questions are outlined which the researcher feels would aid in the proper tacking of this study.  The questions includes the following.

1. Has small and medium scale enterprise played any role on the economic development of Enugu state?

2. To what extent has the small and medium scale enterprises contributed to economic development of Enugu state?

3. How does the small and medium scale enterprise contribute to the economic development of Enugu State?

4. What factors contribute in helping small and medium scale enterprises contribute to the economic development of Enugu state.

5.Are there need to encourage the establishment of small and medium scale enterprise in Enugu State

 RESEARCH HYPOTHESIS

In order to enable the researcher adequately arrive at answers to the already outlined research problems and research questions, the following hypothesis were drawn.

Hi:       Small and medium scale enterprise have effect on the economic development of Enugu state.

  DEFINITION OF TERMS

ROLE

OPERATIONAL

The contribution or the significance of the small and medium enterprises.

Role

Conceptional: An action or function that a person or thing typically has or is expected to have.

SMALL SCALE

OPERATIONAL

Industries with total cost including working capital above #1 million but not exceeding #10 million.

CONCEPTIONAL:  Any small organization that is involved in the production of goods and services in a small scale level.

MEDIUM SCALE

CONCEPTIONAL:  Any organization that is involved in the production of goods and services in a medium scale but higher then small scale.

OPERATIONAL

Firms with total cost of production excluding cost of land but including working capital above #10 million but not more than #40 million.

ECONOMIC DEVELOPMENT

OPERATIONAL

Any economic activity that is geared towards improving the life and the living condition of the people in Enugu state.

CONCEPTIONAL

Any activity that will bring about economic change.

SCOPE OF THE STUDY

It is the desire of the researcher to be very intensive in the process of carrying out this study.

            The researcher will examine the various journals and publications that has to do with the issue of small and medium scale enterprises in order to assentain the views and opinions of the writers.

            The various small and medium scale enterprises in Enugu metropolis will also be examined with a view of finding their response.

            Also, the researcher will examine some individuals in the metropolis of Enugu town in a bid to ascertain their own views and opinions.