CHAPTER ONE

INTRODUCTION

1.1     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-ordination 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 profit.

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 publicly 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 quest 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.

1.2   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.

1.3   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.

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