Entrepreneurs and SMEs in Nigeria are now seen as the backbone of the economy. Already there are policies on the ground that encourage the growth of small businesses, and entrepreneurship plays a very vital role that's considered to be healthy for the economy at large.
So what's this link between entrepreneurship and job creation?
Here's a fact, for a capitalist economy to thrive, there has to be innovation, competition, and growth. Successful entrepreneurs tend to be competitive in nature, think outside of the box type, and this has enabled them to find easy answers to difficult tasks in their businesses.
When President Obama said in 2014, for example, that small businesses had created 64% of the new jobs in the previous decades, this is how they got it done.
Startup businesses Challenge Existing Market
When a startup business enters a local or global market, they stir things up. Very few businesses open and try to be the exact replica of a competitor. Even if they have a similar mission statement and value propositions, they still create a new pattern that will showcase their brand differently. New businesses may start by bringing an existing product to a new market segment, by first, drawing customers away from other business. While older companies are either forced to make changes or lose their market share.
Market Breakthroughs Can Cause New Job Fields to Open
In the manufacturing industry, a lot have been said about how robotics breaks and continues to disrupt traditional manufacturing jobs, which have lead to the reduction in the line jobs.
However, other fields have taken advantage and opened up to needs for alerts, program systems, maintain systems and repairs as they are needed. Netflix, for instance, breaks the video rental industry to the point that renting of videos in the neighborhood video store is more or less a thing of the past. And in its place, people now stream movies and television to their TVs through a paid subscription service.
Small Startup Businesses are More Flexible Small start-up businesses usually start with fewer staffs, less overhead, and equipment than big companies.
In a typical market setting, this can be a disadvantage. In terms of, lacking the clout to organize discounts on certain products, or be unable to hire the very best hands because they can’t offer the same kind of compensation packages as big companies. But small businesses are much more flexible since they can adjust to changing market conditions than big businesses. They're quick to react to an opportunity, and can also operate on a timescale of weeks or months, whereas big businesses need enough settings and approvals in advance in order to get things done.
Competition Pushes Businesses to Streamline Although small businesses are more flexible overall, big businesses can survive disruption when pushed to become more streamlined, so as to maintain their power while minimizing their bulk. And streamlining big businesses can drive innovation just as much as nimble small businesses can.
As a small business becomes successful, it faces additional challenges from other small, startup companies that are able to innovate more quickly and disrupt more profoundly.