THE NIGERIAN MEDIUM SCALE BUSINESSES: ISSUES, CHALLENGES AND PROSPECTS

CHAPTER ONE

INTRODUCTION

1.0       BACKGROUND TO THE STUDY

Historical facts has show that prior to the late 19^th century, cottage industries, mostly small and medium scale businesses controlled the economy of Europe.  The industrial revolution changed the status quo and introduced mass production.  The twin oil shocks during the 1970s undermined the mass production model, which triggered an unexpected reappraisal of the role and importance of small and medium sized enterprises in the global economy.  Findings by economists over the years show that small firms and entrepreneurships play a much more important role in economy growth and development. (www.wiki.answer.com).

Many economies, developed and developing, have come to realize the value of small businesses.  They are seen to be characterized by dynamism, witty innovations, efficiency and their small size allows for faster decision-making process.  Government all over the world have realized the importance of this category of companies and have formulated comprehensive public policies to encourage, support and fund the establishment of SMEs.  Developments in small and medium enterprise are a sin quo non for employment generation, solid entrepreneurial base and encouragement for the use of local raw materials and technology.  Giving insight into the SME phenomenon, a paper delivered at a forum by Mallam Mohammed Hayatu been, titled “Stakeholders Roles and the development benefits in a virile small Enterprise Sector’s, pointed out that small business operations are propelled by the dynamic theory, which makes them efficient and prone to constant change.  He gave a comparative statistics using 9 developed countries on how SMEs create employment, increase job growth, induce change, innovation and competitions. (www.wiki.answer.com).