Introduction

Entrepreneurship as a field of study has grown immeasurably in importance and has attracted significant research and policy attentions in the past two decades. This has largely been due to its impact on innovation, economic growth, poverty alleviation and public goods delivery, particularly in developing countries. The adoption of institutional theory in entrepreneurship studies has equally helped to highlight the interactive roles of institutions and individuals in entrepreneurship development.

Although there is an unusual absence of the term “institution” in conventional definitions of entrepreneurship, such definitions are always embedded in the context of the presumed interaction between individuals and socio-economic institutional structures on which the society operates. Earlier definitions as cited in Iversen et al. (2008) and Zimmerman (2008), for instance, focused on the role and contributions of entrepreneurs in the larger economy. Popular among the definitions are that of Cantillon (1959), an Irish merchant based in France, who presented an entrepreneur as one who was “responsible for all exchange and circulation in the economy”; and Baptiste Say (1767–1832) ¹ who saw an entrepreneur as “the main agent of production in the economy” (cited in Iversen et al. 2008).

The quest for a more authoritative and inclusive definition of the concept in the globalised business environment has thus provided a fertile ground for the current growth in entrepreneurship literature. A working definition of entrepreneurship that is consistent with the modern business environment, according to Stevenson of the Harvard Business School, presents the concept as “the pursuit of opportunity beyond resources” (cited in Eisenmann, 2013). Drawing on Hitt et al.’s (2011) conceptualisation, entrepreneurship refers to a “context specific social process through which individuals and teams create wealth by bringing together unique packages of resources to exploit marketplace opportunities” (Ibid.: 59). It equally includes new-venture creation that is growth oriented and generates employment, as well as small businesses and micro-enterprises that may provide self-employment (Bhide 2000).

Historically, an entrepreneur has always been regarded as an innovative productive agent with a difference. In this sense, a neoclassical economist, Alfred Marshal (1842–1926) was the first to refer to an entrepreneur as an innovator, stressing that such a businessperson is always in constant search for opportunities to minimise cost ² (Van Praag 1999). Subsequent scholarly efforts, according to Swedberg (1991) and Zimmerman (2008), were built on this innovative role of an entrepreneur, with Joseph Schumpeter, the then student of Bohn-Bawerk, who later became one of the most influential entrepreneurship scholars, illustrating that a businessman who undertook either of the following tasks qualified as an entrepreneur and innovator: creation of a new good or a new quality; creation of a new method of production; opening of a new market; the capture of a new source of supply; or creation of a new organisation or industry. The entrepreneurship networks thus contribute towards building the required institutional platforms for the smooth and efficient functioning of the national economy (Acs, Szerb, and Autio 2015).

Despite the valid acknowledgement that entrepreneurship is shaped and constrained by the socio-cultural and economic factors embedded in different national contexts (Ibid.), the entrepreneurship literature has largely neglected to account for entrepreneurship development in diverse institutional characteristics. Most extant studies in this area have focused largely on entrepreneurship in Anglo-Saxon Western countries (e.g. United Kingdom and United States) and other Western countries that share comparable cultural values and business environment. Studies on this subject in Africa have been rare and we know comparatively little about the dynamics of entrepreneurship development in Nigeria in particular. The Nigerian context represents an important but relatively neglected context that can enrich and contribute to the global entrepreneurship discourse due to its unique geographical, political, economic and cultural characteristics. In response to an earlier call by entrepreneurship scholars (e.g. Herbig 1994; Shane 1992), this paper draws on Institutional Theory to discuss some key factors that shape and constrain entrepreneurship development in Nigeria. The paper highlights the context-specific nature of entrepreneurship and attempts to reveal the influence of various factors and variables on entrepreneurship development. This is expected to contribute to the development of contextually relevant policies, practices and theories of entrepreneurship development. The rest of the paper is organised as follows. The next section provides brief insights on the entrepreneurship context in Nigeria. A third section outlines the theoretical framework of the paper. This is followed by a look at the strategies for building effective institutional structures for entrepreneurship development. Finally, we present the summary and conclusion.

Nigeria’s Entrepreneurship Context

The Nigerian business environment is largely described as difficult and unfriendly. The country lags behind in key measures of quality of business environment. The 2014 Doing Business Report in Nigeria revealed that the country fell from its 138th position in 2013 to the 147th position in 2014. Nigeria’s context is a confirmation that the economic hardship and social discrimination that create opportunities for the birth of entrepreneurship businesses, ironically threatens entrepreneurship incubation and business survival. For instance, the country does relatively well in terms of rate of new business registration (with the level rising from 65,074 in 2010 to 81,144 in 2012); the cost of business start-up procedures (% of gni per capita) (declining from 75.9 per cent as at 2010 to a low level of 31.6 per cent in 2014); and the ease of doing business (scoring 175 as against the Sub Sahara African average of 142 in 2013) (World Bank Doing Business Report, 2015). In contrast, the country lags far behind in the indices for business survival and sustainability – performing poorly in terms of ability to resolve insolvency in business (with a score of 107 out of 189 countries covered in the 2014 Doing Business Report).

The Africa Heritage Institute, an independent economic think-thank in Nigeria, developed an environmental matrix termed becan Model, as a tool for benchmarking the quality of Nigeria’s business environment, reflecting some negativities in the business environments both at the national and sub-national levels. The matrix is represented in the box below:

Business Environment Matrix in Nigeria

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In essence, profiting from a high risk, volatile and unprofitable business environment is rather the main window of opportunities for true entrepreneurs. Entrepreneurial success is, for instance, tied to the quality of an entrepreneur’s decision-making under extreme uncertainty and ambiguity (McVea 2009). An entrepreneur focuses on affordable loss and not on the conventional rate of business returns. ³ In the foreseeable future, the goal of the entrepreneur is that return on capital would over-run the affordable risk.

While it is not contestable that Nigeria ranks amongst the worst in most strategic measures of the quality of the business environment, available evidence reveals the thick presence of the country in the global entrepreneurship environment. In effect, the country is still ranked among the top investment destinations in the Sub Sahara African region (unctad, World Investment Report 2015). This is confirmed in a report by AllWorld Network Inc., where in 2012, 50 top Nigerian private companies broke many AllWorld records in a contest involving companies from 15 other countries in the Middle East, North Africa, India, Pakistan, South Africa and Turkey. Nigeria was adjudged to have the highest number of well-established women entrepreneurs at the level of 16 per cent. The top 50 Nigerian entrepreneurs were also found to break many of the records in terms of the growth rate, the size of companies and diversity of industries. ⁴ Some of the factors responsible for this scenario are based on the claim that the country is a high risk high return destination (Ventureafrica.com); ⁵ and optimistic entrepreneurs with an eye on high returns find the country as a viable destination for investments.

Institutional Theory and the Entrepreneurship Premise

Modern theoretical postulations on the meaning and role of entrepreneurs are different from the early days practice. The central attempt in the modern practice is to conceptualise entrepreneurial activities in the changing global economic system. Core emphases of the modern theorists, starting from the late 1990s, for instance, are identified to include: an interception between available profitable opportunities and enterprising individuals; and expertise in decision-making uncertainty (Shane and Venkataraman 2000). The theoretical views about modern entrepreneurship practices are thus weaved into an emerging neo-institutionalism school, which sees both the entrepreneur and the institution as practically inseparable.

The theoretical context of neo-institutionalism (championed by John Meyer and Brian Rowan in 1977, Lynne Zucker also in 1977, and later reshaped by Richard Scott in 1983) ⁶ revolves around how the institutional structures in the society shape the behaviour of micro-agents, and how the agents (particularly the individuals) strive to manage prevailing threats, while at the same time exploiting opportunities in the larger business environment. The application of neo-institutionalism therefore seeks to explain the socio-political dynamics prevailing in the operational spaces of individual agents in the society. Applying this neo-institutional theoretical framework, the formal organisational structure of an enterprise is adjudged to be shaped by “the technical demands and resource dependencies,” and “by institutional forces, including rational myths, knowledge legitimated through the educational system and by the professions, public opinion, and the law” (Powell 2007: 1).

Attempts at incorporating institutional theory in modern entrepreneurship studies therefore centre on the position of an individual either as a dormant business person, whose orientations and actions are defined by institutional forces outside his control, or as an active agent, who exploits institutions and redirects institutional policies and courses of actions to his/her credit. In doing this, the entrepreneurial agent sees himself in a constant struggle to strike an optimal balance between the judgements of the structuralists and those of the agency theorists. From the perspective of structuralism, entrepreneurship development is shaped by prevailing framework and rules; while from the agency perspective, human agents are viewed “as ontological primitive and view institutions as structures that created by goal-maximizing individuals” (Clark 1998: 245). It is this dichotomy between the structuralists and the agency theorists that gave birth to the problem of the paradox of embedded agency – with an attempt to address the problem leading to the postulation of the new institutional theory. The paradox of embedded agency essentially arises because entrepreneurs who are constrained by institutional challenges and pressures face little chance of transforming the institutions in their favour. By implication, the freedom of entrepreneurs operating in a socio-economically difficult and unstable environment is likely to be constrained by the same environment (for more insight on this see Lawrence, Suddaby, and Leca 2009).

Resolving the arising conflicts between the structuralists and the agency theorists within the framework of neo-institutionalism requires a clear understanding of the meaning, context and tenets of modern institutions. This is more so considering that the term “institution” is not just imprecise, but also complex. Institutions may be defined as “the rules of the game in a society or the humanly devised constraints that shape human interaction” (North 1990: 3). They are generally conceptualised as deep aspects of social structure, which act as authoritative guidelines and constraints on behaviour (Scott 2008). Institutions can be either formal, such as rules, laws and constitutions, or informal, such as norms of behaviour and conventions (Boettke and Coyne 2009; North 1994). Formal institutions refer to the objective constraints and incentives arising from government regulation of individual and organisational actions (Bruton et al. 2009). Informal institutions are “the norms, customs and mores that enable us to cooperate with strangers in the marketplace,” through “the norms and values of trust and reciprocity” (Boettke and Coyne 2009: 6). In reality, both the formal and informal institutional environments play a crucial role in socio-economic development. As Boettke and Coyne put it, “informal rules are often codified in practice to become formal law”; and that “the enforcement of the formal and informal institutions determines how binding the rules are in any given society” (Ibid.). However, the degree of influence each of the two has on the economic landscape depends on the levels of economic development in a country, and specifically on the strength of the socio-political structures in place.

The premise of the traditional institutional theory posits that whereas the formal institutions dwell on existing economic, political and legal structures in place, the informal institutions focus on the socio-cultural contexts in the society. The former addresses issues relating to the role of national institutions such as national labour laws; trade unions; politics; educational and vocational training systems; labour market; professional bodies; international institutions; employers’ federation; consulting organisations; placement organisations; trade bodies; government institutions; local authorities; and voluntary bodies (Budhwar and Debrah 2001). In contrast, the latter explains how individual and firm behaviours are shaped and regulated by social and economic institutions. This theory suggests that individual and firm’s behaviours reflect and mimic societal conventions, values, beliefs and norms.

Institutional Pillars and Entrepreneurial Development: The Nigerian Context

Over the years, institutional theory has gained prominence as a popular and influential explanation for organisational and individual behaviour (Dacin et al. 2002). The institutional approach has been adopted by different disciplines and the extant literature on institutional theory is too extensive to be adequately summarised here (for a more comprehensive review see Hodgson 1994). Although institutionalists vary in terms of their emphasis, inherent to all their work is a claim that organisations operating in similar environments are likely to seek legitimacy and recognition by adopting practices, processes and structures that are prevalent in their environment (Fogarty 1996). This general proposition has been the foundation on which a number of institutional mechanisms have been conceptualised. A particularly useful conceptual framework for understanding how entrepreneurship development is shaped and constrained by institutional setting is Scott’s (2004) “pillars” of institutional processes. Scott posits that there are three “pillars” of institutional processes: the regulative pillar, the normative pillar and the cognitive pillar. These pillars shape and circumscribe the actions of individuals and organisations within a given institutional environment. We draw on the three pillars to illustrate the context dependent nature of entrepreneurship; and how institutions can shape and constrain entrepreneurship development in a developing society such as Nigeria.

Regulative Institutional Pillar

The regulative institutional pillar refers to the “existing laws and rules in a particular national environment, which promote certain types of behaviours and restrict others” (Kostova 1997: 180). It involves “rule-setting,” “monitoring,” and “sanctioning” activities (Scott 2008: 2). It equally focuses on government policies and programmes aimed at stimulating and developing the productive capacities of entrepreneurs in a country. Legal structures transcend beyond rules and regulations, extending to “government attitudes toward markets and freedoms and the efficiency of its operations are also very important” (World Economic Forum 2015: 4). ⁷

There are key legally-linked factors that can affect entrepreneurship development. Some of these include government activism, legal frameworks for lending and borrowing, environmental rules, protectionist policies that favour (or are biased against) certain classes of businesses or ethnic groups, access to education as well as property ownership rights. Government activism, for instance, reflects the extent to which a nation’s formal institutions redistribute economic wealth through progressive tax structures and spending to provide for the common welfare of its citizens (Aidis et al. 2012). It thus reflects a government’s ability to address social issues and provide public goods. In Nigeria, government activism remains somewhat low. This is considering the existence of limited government support for social programmes and national welfare provisions. In essence, government inactivity is likely to motivate many entrepreneurs to set up social enterprises to fill this gap. This view is consistent with broader literature (e.g. Mair, Battilana, and Cárdenas’s 2012), which recognises that social enterprises frequently appear where governments fail to provide for social needs, such as adequate healthcare, children’s social services or environmental protection.

In a multi-class, multi-ethnic society like Nigeria, entrepreneurship spirits and practices have emerged as a way of coping with the inherent discrimination tendencies by dominant groups. The same is the case in countries with racial bias, where minority races are naturally considered more enterprising than the majority racial groups. Under this scenario, marginalised groups that are discriminated against and are socially deprived strive to overcome such stigmatisation by breaking new business grounds and building protective entrepreneurial empires (Cuervo 2005). This is essentially the case in Nigeria, where the Igbo ethnic group is considered to have drawn its entrepreneurship strength from an attempt to break away from the difficulties imposed by the 1966–69 Civil War between Biafra (largely dominated by the Igbos) and the Nigerian government. The Igbo ethnic group is ranked as one of the two most educated ethnic groups in Nigeria and one of the most industrious and business-oriented, together with the Yoruba in the Western Region (see, for instance, a detailed account of this claim in Mwakikagile 2007: 274).

Along similar lines, the argument is that a larger, wealth-redistributing welfare state crowds out private pro-social initiatives (Warr 1982) and thus fewer individuals are likely to be motivated to engage in social entrepreneurship. The rentier nature of the Nigerian state, in this sense, can be linked to its characteristic under-productivity and underdevelopment (Falola, 2004); it can also be responsible for the high level of informality in the country’s entrepreneurial space. As established by Herb (2005), the fact that rentier states need not tax their citizens creates a disconnection between the people and the government. At the sub-national level, apart from Lagos (in the South) and Kano State (in the North), there is generally an inverse link between the flow of oil revenue and economic productive tax capacity (Ezeoha et al. 2016).

That the legal environment in Nigeria has not provided a favourable ground for entrepreneurship development does not, however, imply absence of government’s supporting institutional structures for entrepreneurship growth. Some programmes have indeed been initiated and implemented by the government as outlined in table 7.1 below. While it is outside the scope of this paper to give a full evaluation of the success or failure of the various government interventions in the previous years, it is evident that the level of unemployment and poverty has remained relatively high, in spite of the expectations of Nigerians regarding the benefits of the various intervention programmes.

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Figure 7.1 below shows the rate of unemployment by state in the country.

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Unemployment rates across Nigerian states

Source: National Bureau of Statistics, Social Statistics in Nigeria, 2015

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The regulatory institutional pillar is also anchored on measurable indices like ease of doing business; level of economic freedom; rule of law; prevailing copyright and patent laws; efficiency of the financial system infrastructure; fiscal policy direction of the government; and the nature of the labour market regulation. Nigeria’s ranking on these indicators reveals a comparatively poor stance in the Sub-Sahara African region. A number of researchers confirm the significant influence of these factors on entrepreneurship development. Stel et al. (2007), for instance, find some of the key constraints to include minimum capital requirements and labour market regulations. Nystron (2008) finds the efficiency of the regulatory frameworks on property rights, access to credits and labour as being the lubricants for entrepreneurship growth; and Powell and Rodet (2012), in a multi-country case study, find that “freedom from big government” is an important driver of entrepreneurship growth and development.

In Nigeria, other critical regulatory issues against entrepreneurship development border on legal and governance challenges, which reflect particularly on the prevalence of bureaucratic bottlenecks, corruption and fraud, ⁸ policy inconsistency, ethnic segregation, archaic land governance practices, judicial delays as well as the absence of formal legal tool for the promotion, protection and governance of entrepreneurial businesses. For instance, the higher rate of piracy faced by Nigerian artists ⁹ succinctly demonstrates the inability of the legal system to promote entrepreneurship growth and development in the country.

Also in the international business environment, Nigerian entrepreneurs are challenged by the poor economic competitiveness of the country as a whole. The country is largely dependent on crude oil exportation for its foreign exchange earnings, with the proportion of oil revenue to total export revenue standing at about 75 per cent. Aided by the country’s porous land borders and seaports, this import-dependency syndrome is such that virtually everything is loosely imported into the country (Omoh 2011). The implication is that the products of local entrepreneurs are left to compete with those of other entrepreneurs in countries where the business environment is friendly and where the cost of production is much cheaper. Evidence shows that in other jurisdictions (such as the usa), “larger firms feed the fish instead of eating it” (Acs and Armington 2006: 166), as opposed to the Nigeria case where larger firms (sometimes with wider access to foreign resources and markets) feed on the fish by crowding out small firms.

Nigerian entrepreneurs do not enjoy good reception in neighbouring African countries either. Key examples are the Ghanaian-Nigerian business squabble, where the Ghanaian government enacted and tried to enforce a policy compelling Nigerian businessmen and traders to pay a minimum capital of $300,000 or have their businesses shut down (Business Day, 10 August 2012; Akinyoade 2015). This is similar to the recent Zimbabwean declaration against foreign African businesses, where the Zimbabwean government, under its black empowerment law, gave foreign shopowners (mostly Nigerians and Chinese) an ultimatum to shut down their businesses by 1 January 2014. The 2015 xenophobia attacks in South Africa against other African nationals (especially Nigerians and Zimbabweans) and their businesses are again further evidence of the unfriendly reception of Nigerian entrepreneurs within the Sub-Sahara African region.

The unstable and fragile nature of the Nigerian financial system poses another setback to entrepreneurial growth and sustainability in Nigeria. This is especially considering the existence of financial barriers such as high lending rates, excessive demand for mortgage-backed collaterals, high incidence of financial exclusion, credit rationing, and lack of protection for minority businesses that tend to crowd out small savers and borrowers in the financial system (Ezeoha and Amaeshi 2010).

Normative (Social) Context

The normative pillar refers to “a prescriptive, evaluative, and obligatory dimension into social life” (Scott 2008: 54), based on social interactions, social obligations and shared understanding of what is appropriate (Wicks 2001). Normative elements are the values and social norms that define the “rules of the game” – that is, “what is right to do around here” (Marquis et al. 2007: 934). The normative frameworks set the standards for, and encourage conformity to that which is deemed to be acceptable corporate behaviour (Campbell 2006).

Nigeria is a country with a rich cultural heritage. One of the main features of Nigeria’s distinctive culture is the importance attached to the extended family system. Nigerians are connected by a network of social relationships based on lineages and genealogical lines (Ituma and Simpson 2007). Within the kin system there is an emphasis on interdependence, sharing and reciprocal obligations. Here, close and not so close family members (e.g. distant cousins and their spouses and children) form a social network of relationships that serves as a form of social insurance. This network has multifaceted dimensions (e.g. gift giving, financial support, care for children), and is built around ethnic lines (Ituma and Simpson 2009). The extended family system reinforces values such as sharing and mutuality, adherence to social obligations and the need to maintain strong social and personal relations. These values and practices exert normative pressures toward behaviours oriented towards obligations and commitments, which, to some extent, take the place of the established social security and welfare systems of more developed countries.

The aforementioned normative features of the Nigerian society are found to exact significant influence on entrepreneurship growth and development; and that is essentially because of their influence in decision-making processes and in risk behaviours of indigenous entrepreneurs. Studies (for example Babatunde 1992; Obayan 1995) suggest that the extended family phenomenon could, in essence, be a barrier to entrepreneurship development. The empirical premise of such studies is that the expectations of the extended family system from its members are incongruent with entrepreneurial ideals based on the purely economic principle of rationality and profit maximalisation. The Nigerian extended family system seems to encourage dependence of other family members on the successful member, thereby impacting negatively on the invested fund. This is in contrast with the case of Asian entrepreneurship, which thrives on familial ties (Reddings 1980), where every member of the family engages in productive activities, towards the actualisation of the set business goals.

Further views on the impact of the normative institutional pillar in the case of Nigeria are captured in the undoubtedly near lack of a culture of business succession in the country (Onuoha 2013; Ogundele 2012), usually resulting in an unsustainable family business system. There is, for instance, a known history of closure of large family business empires due to the death of the family heads. A good example here is the case of Alhaji Moshud Abiola, whose Concord Group (his business name) controlled the landscapes of the news media, airlines and communication businesses in the country up until the start of the 1990s; the Odutola Business Empire (then controlled by two blood brothers; Alhaji Jimoh Odutola and Timothy Adeola Odutola), which laid the “foundation for modern commerce and industry in Nigeria,” but could not survive beyond the founders because “none of their children was interested in reviving their businesses”; ¹⁰ the Ekene Dili Chukwu Group (owned by Chief Ilodibe), whose successful transport and haulage, and automobile distribution businesses suddenly vanished “following the death of the super-rich patriarch.” ¹¹

A growing level of insecurity – arising from political crisis, ethnic and religious unrest, civil conflicts, a high crime rate, kidnapping, and armed insurgence equally constitute another major threat to entrepreneurship growth in the country. Civil conflicts and political instability have the tendency to threaten the survival of the majority of entrepreneurs. This arises when conflict induces business displacements (Benassy-Quere et al. 2007), dispossesses people of their means of livelihood (Faria and Mauro 2009), dampens entrepreneurial spirit and escalates poverty by distorting the government’s fiscal incentives, undermining human development efforts at all levels, and causing the destruction of socioeconomic infrastructure (Wharton and Oyelere 2011; Serneels and Verpoorten 2015; Ezeoha and Ugwu 2015). In conflict situations, minority populations and women are more adversely affected, leading particularly to the destruction of the female entrepreneurial class.

The Boko Haram insurgence in the country since 2009 specifically demonstrates how conflicts can induce business migration and cause some displacements in the development patterns of entrepreneurship. A popular Nigerian media outlet in 2012 described the impact on the host cities as “a systemic distortion of existing economic patterns and structure in the Northern region” (Business Day, 18 April 2012). More worrisome is the destabilising impact on local business and entrepreneurial groups that have provided a significant platform for poverty mitigation and employment in the country.

Cognitive (Cultural) Pillar

The cognitive pillar refers to “shared conceptions that constitute the nature of social reality and the frames through which meaning is made” (Scott 2008: 57). A particular cognitive pillar that has influenced the pattern of entrepreneurship development in Nigeria is the gender role stereotype, which perceives women as the “weaker” sex. Nigeria is a masculine society and there are traditional gender-based differences in role allocation (Udegbe 2003). Women are primarily defined through childcare and domestic responsibility, while men are viewed as breadwinners and, as such, their career development is generally given more priority (Chovwen 2006; Ituma and Simpson 2009). The masculine stereotypes may discourage some women from attempting to set up new business in Nigeria, because entrepreneurs are often viewed as bold, aggressive, calculative, risk-taking men (Abimbola et al. 2011). Gender bias is more prevalent in Muslim-dominated Northern states, where women are, traditionally, least expected to be engaged in overt socio-economic activities. For example, in a good number of the Northern states, women are nearly absent in the ownership of farms. In the predominantly Christian Southern states (excluding Lagos and a few other States in the South-West that have a relatively even distribution by the two major religions), the proportion of female farmers ranges from 24 per cent in Imo State to 82.8 per cent in Anambra State; but in the predominantly Islamic States in Northern Nigeria, the proportion of female farmers is relatively lower at 0.3 per cent in Bauchi or Jigawa State to slightly over 50 per cent in Katsina. See figure 7.2 below, where States in the first half of the graph (Adamawa to Zamfara) represents the Northern states and the other half (from Abia to Rivers) represents Southern states.

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Percentage distribution of female farmers in some selected states in Nigeria

Source: National Bureau of Statistics, Social Statistics in Nigeria 2012

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Even in educational institutions, courses of studies are gender determined – with some courses assumed to be exclusive reserves for the women and some for men. Gender-related challenges are of concern, especially in light of the fact that competition in the business environment has no special consideration for the weakness or fragility of newcomers. It is an environment where those who enter are expected to have the ability to survive, and whoever is not able to do so should just be allowed to die off. Survival is considered only for the fittest, the smartest and the die-hards; where the big fish are eager and ready to feed on the small fish as a strategy for growth. Such features, in an environment without adequate institutional protections, are a deterrent against the emergence and sustainability of female entrepreneurs.

Other key factors that have shaped entrepreneurship development and sustainability in Nigeria include governance challenges, such as: bureaucratic corruption, ethnicity, land governance policy and policy inconsistency. A good example of the effect of policy inconsistency is the removal of the fuel subsidy in Nigeria, which is believed to have adversely affected businesses through the increase in the costs/prices of production inputs. The case of persistent subsidy reforms shows how unfavourable government policies can retard entrepreneurship growth and survival in an oil-dependent society. Structural defects in the country are also reflected in prevalent multiple taxation practices – due to the federal structure of the country, weak tax laws and institutions, corruption; and poor access to business finance – due to the unwillingness of lending institutions to extend credits to smes and new ventures, high interest rates, and overly demand for collateral; infrastructural deficiency – bearing on bad road condition, erratic electricity supply, inefficient and costly transport system, telecommunication network problems, and similar.

Institutionalised Strategies for Entrepreneurship Development

A number of studies find a strong positive correlation between the soundness of the business environment and entrepreneurial success (Agboli and Ukaegbu 2006). In the case of Southeast Nigeria, the study by Agboli and Ukaegbu finds that, when premised on the quality of infrastructure, access to credit, bureaucratic practices and regulatory policies, the business environment in southeast Nigeria is stressful, and so constrains the scope of entrepreneurial development in the area.

The unwavering nature of the enterprise performance and business environment nexus has equally been anchored on the fact that whatever happens in that environment determines the degree of competitiveness and success of all enterprises ( becan Report 2007). The importance of ensuring a stable and friendly environment is highlighted in the 2007 becan report. The report amplifies that the background challenges created by lingering widespread poverty and unemployment in Nigeria should serve as a wake-up call for government to build a viable competitive private sector-led business environment capable of creating jobs, generating wealth, and fostering sustainable growth and poverty reduction (Ibid.).

Undoubtedly, entrepreneurial education has a number of advantages and has proven to be highly impactful in developing countries such as India, China, Brazil and other emerging economies in the world. Not only have these countries produced domestic entrepreneurial capital, they have also recently come top among entrepreneurship exporting countries. This explains the presence of Indian and Chinese entrepreneurs in all parts of Africa and the Middle East. The major benefits of entrepreneurship education, especially in the area of resolving conventional entrepreneurial challenges, are tied to the belief that such a system has the capacity to induce entrepreneurial culture and understanding in a wide range of individuals, enhance positive entrepreneurial behaviour and personalities, instigate entrepreneurial and innovative thinking amongst the youth, and lay a strong foundation for the realisation of the goals of Nigerian education policy.

Summary and Recommendation

In most developed and emerging economies, the strength of the entrepreneurship class is the strongest propelling force for socio-economic development. The level of economic development is also determined by the volume of entrepreneurial activities going on therein. Thus, countries that have excelled in employment creation and poverty reduction are those that have strategically invested in entrepreneurship development. In Nigeria, macro-economic entrepreneurial benefits are yet to be optimised due to the hostile and chronically problematic nature of the internal and external business environment in the country. ¹⁴ Business performance is still greatly constrained by institutional weaknesses such as: poor infrastructure; insecurity; weak legal structure; near absence of structured government supports; and poor access to external finance. At the micro-scale, many Nigerians lack the requisite skills and entrepreneurial spirit to excel. Ironically, entrepreneurial activities in the country have been given a significant boost by persistent economic challenges, such as poverty, unemployment and institutional weaknesses. While economic challenges might have presented significant opportunities for resolute individuals to succeed, it is necessary to note that it is only by providing the right institutional environment for business that the country can expand its entrepreneurial scope, tap into its huge human and natural resources, and meaningfully and effectively fight the scourge of poverty, youth unemployment and civil conflicts.

This paper has provided an institutional explanation of entrepreneurship development in the Nigerian context. An important implication of the analysis is that individuals and firms do not always take rational decisions; rather, decisions and behaviour are framed by certain presupposed expectations. These expectations, in turn, legitimise individual actions and determine behaviour. Thus, we should not think of entrepreneurship development as primarily driven by individual free choice, but should take into consideration the wider contextual factors that create opportunities and barriers for individual career development. Researchers should give greater attention to the interactions among the institutional pillars and the simultaneous influence of these pillars on aggregate entrepreneurship.