Entrepreneurs Network, Entrepreneurial Competence and Entrepreneurial Intention of Northern Nigerian Universities Students

Abstract

Entrepreneurship has become one of the major factors for economic development. This has motivated governments around the world in putting several policies and programs in place to ensure that its teaming population imbibe the culture of self-reliance. Developing economies have been left behind especially on the likely factors affecting youth entrepreneurial activities, looking at the differences that exist between their counter parts in developed economies. Previous researchers have identified various factors that enhance entrepreneurial intention. However, despite these efforts, many students failed to see entrepreneurship as an alternative to white collar job. Consequently, there is persistent increase in the rate of unemployment especially in developing countries like Nigeria. In view of this, the present study theoretically proposed some factors such as entrepreneurial competence and entrepreneur’s network as possible determinants of student’s entrepreneurial intention. The paper provided an extensive review of literature on the concepts of entrepreneurial competence and entrepreneurs’ network and their links with entrepreneurial intention. In conclusion, the study argued that although EC and EN are seen as likely success factors and their relationship with entrepreneurship intention is seriously lacking especially in developing countries like Nigeria. The study if validated will help governments around the world in coming up with an integrative and inclusive model to reduce the menace of unemployment in their countries.

Keywords: Entrepreneurs’ networkentrepreneurial competenceentrepreneurial intentionNigeriaUniversities

Introduction

In today’s environment entrepreneurship has become one of the major factors that ensure economic prosperity and sustainability, as it promotes innovation and creativity which in turn creates employment (Faran, Karimi, & Motaghed, 2017). The evidence of the role of entrepreneurship can be vividly seen in developed economies, where entrepreneurs are recognized as the major employer of labour that provides shock absolvers especially during economic crisis. For example in the United States of America (USA) and United Kingdom (UK) France entrepreneurs provides 53% and 63% employment, which have contributed about $18.6Tn and $2.6Tn respectively to the Gross Domestic Product (GDP) (Frick, 2015, News, 2018). The case is similar in Malaysia, Ghana and South Africa as entrepreneurship contributes greatly to their various GDPs. For example, in Ghana entrepreneurship contributes about 70% to GDP (Essien, 2017), while in South Africa it contributes about 36% (SMIT, 2017)as compared to Nigeria’s less than 2%.

Literature review and Conceptual development

Entrepreneurial intention (EI)

Psychological researchers are of the view that intention is as a result of planned behavior (Bagozzi, Baumgartner, & Yi, 1989). Consequently, entrepreneurial intention (EI) is essential in comprehending and understanding the factors or activities preceding any entrepreneurial action (Krueger & Carsrud, 1993). EI is the significant predictor of entrepreneurial behavior (Ajzen, 1991; Fitzsimmons & Douglas, 2011; Shapero & Sokol, 1982). In a meta-analysis, Kim and Hunter, (1993), established that a strong relationship exists between attitude and behavior. EI is defined as the entrepreneurial decision that motivates, directs and guides individual toward putting the entrepreneurial idea into action (Boyd & Vozikis, 1994; Chen, Greene, & Crick, 1998). Bird (1992) posits that entrepreneurial intention can be defined by individual characteristics and environmental factors. Thompson (2009) defines EI as “a self-acknowledged conviction by a person who intends to set up a new business venture and consciously plan to do so at some point in the future. That point in the future might be imminent or indeterminate, and may never be reached” (p.676). Entrepreneurs’ decision to engage in entrepreneurship is as a result of their choices and plans, resulting in new ideas which are turned into new businesses (Krueger, Reilly, & Carsrud, 2000; Shaver & Scott, 1991; Turker & Selcuk, 2009). These new businesses create employment, as such reduce poverty and raise the economic status of the country (Parker, 2005). Furthermore, Lans, Gulikers, and Batterink (2010) identified three broad categories of intention that include classical EI, which is the intention to start or establish a new business, alternative EI, which is more of the intention to continue running of acquired or inherited business. Finally intraprenurial intention which is the intention to be an intrapreneur or corporate entrepreneur.

Entrepreneurial Network (EN)

Network or networking has been identified as critical factor for any entrepreneurial process (Jack, Moult, Anderson, & Dodd, 2010), hence its rise as one of the major theme in entrepreneurship research (Chell & Baines, 2000; Hoang & Antoncic, 2003). Networking is defined as an activity or process through which an entrepreneur generates or gets information about new business ideas and opportunities. This definition supports the argument of scholars such as Suddaby, Bruton and Si (2015) and De Carolis & Saparito (2006) that current literature about entrepreneurship identifies two major perspectives through which entrepreneurial opportunity is recognised. These perspectives are internal factors such as knowledge, experience, creativity and cognitive process (Shane & Nicolaou, 2015; Shu et al., 2018), while the second aspects deals with the amount of information search and acquired by an entrepreneur which are external in nature (Man et al., 2011).

In entrepreneurship, networking focuses more on the ability of the individual to use social process in influencing social structure to generate or mobilise information (Greve, 1995). Therefore, an entrepreneur needs to ensure utilization of wide range of different sources of information available in his/her network to develop his ideas. In particular, it has been argued that new venture creation is the result of the interplay of entrepreneurs’ social networks and cognitive biases. As the presence of entrepreneurial opportunities in a network increase, the odds of entrepreneurial behaviour increase, but only if someone is inclined toward entrepreneurial behaviour (De Carolis & Saparito, 2006).

Entrepreneurial Competency (EC)

The concept of entrepreneurial competency (EC) like many other concepts has the challenges of definition (Mitchelmore & Rowley, 2010). In fact, the terms “skills”, “expertise”, “acumen” and “competency” are all interrelated and are sometimes used interchangeably in the literature (Brock Morse, 2005). These have created a lot of faces, applications and models of entrepreneurial competence which have resulted in many notions and concept of competence. Consequently, resulted in three broad understanding of entrepreneurial competence which include personal (Bartlett & Ghoshal, 1997), knowledge and experience (Man et al., 2002) and traits skills and abilities (Stuart & Lindsay, 1997). For example, Rowe (1995) defines “competence” as a skill or standard of performance, in contrast to “competency (ies)” which he argues refers to a behavior in which performance is achieved. In an extended review of the various meanings attributed to competencies, the following definitions were drawn from management and entrepreneurship literature to show the interchangeable nature of the concept as presented in Table 1 below:

Table 1 -
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Problem Statement

In Nigeria, various governments have introduced many similar initiative, policies and programmes aimed at reducing unemployment. One of these programmes is the introduction of compulsory entrepreneurship education to all students in Higher Education Institutions (HEIs). Notwithstanding, the rate at which unemployment is increasing is alarming, which has created a wide list of negative consequences to the country (Johnny, Timipere, Krokeme, & Markjacson, 2018). From 2015 to 2018, Nigerian unemployment rate has sky rocketed from 6.4% in January, 2015 to 18.8% in December 2017 (National Bereau of Statistics (NBS, 2017) (see figure 1 ). The increase in unemployment shows that apart from entrepreneurial education there are other factors needed to ensure students imbibe entrepreneurial culture (Rezaei Zadeh, Hogan, O’Reilly, Cunningham, & Murphy, 2017).

Figure 1: Nigerian unemployment rate statistics
Nigerian unemployment rate statistics
See Full Size >

Unemployment in Nigeria can be addressed using many factors. Some of these factors include entrepreneurial education (Nowiński, Haddoud, Lančarič, Egerová, & Czeglédi, 2017; Teixeira, Casteleiro, Rodrigues, & Guerra, 2017), environmental factors (Kebaili, Al-Subyae, & Al-Qahtani, 2017), entrepreneurial orientation (Ibrahim & Lucky, 2014) to mention a few. Although, various studies (Ferrandiz, Fidel, & Conchado, 2018; Fuller, Liu, Bajaba, Marler, & Pratt, 2018; Roy, Akhtar, & Das, 2017; Teixeira et al., 2017; Zhou, 2012) have been conducted on several factors capable of enhancing entrepreneurial intention (EI) around the world, there is still paucity of research on the effect of entrepreneurial competency (EC) (Bagheri & Abbariki, 2017; Cubico, Oliveira, Bellotto, Formicuzzi, & Sartori, 2015; Pruett et al., 2008; Robertson, Collins, Medeira, & Slater, 2003) and entrepreneurial network (EN) (Hoang & Antoncic, 2003; Shu, Ren, & Zheng, 2018) in enhancing students EI.

Research Questions

Does entrepreneurs’ network affect entrepreneurial intention?

Does entrepreneurs’ competence affect entrepreneurial intention?

Purpose of the Study

In respect of the above, governments around the world are putting different policies and programmes in place to ensure that students inculcate entrepreneurial spirit to reduce poverty and high rate of unemployment in their countries (Shah & Soomro, 2017). These programmes are aimed at not only inculcating entrepreneurial spirit but also supporting current entrepreneurs (Toutain & Fayolle, 2017; Ratten, Ferreira, & Fernandes, 2016). Despite these policies and programmes unemployment has become a major source of concern to most developing countries like Nigeria (Ibrahim & Lucky, 2014).

Specifically, Man, Lau and Chan (2002) argued that developing EC is far more important than resources and positive environment. A part from that, the nature of the relationship varies in line with the entrepreneurs’ context and task performed (Rahman, Ahmad, & Taghizadeh, 2016). Hence, they posit that EC as a trait can be developed through training and experience. In fact, Malekipour, Hakimzadeh, Dehghani and Zali (2018) stated that for individual to display the needed innovative behaviour and lunch a new business, there is need for EC as one of the vital factors to ensure successful life within and outside the business. More specifically, early entrepreneurial competence in adolescence positively predicted entrepreneurship (Cubico et al., 2015; Bergevoet & Woerkum, 2006).

On the other hand, the ability for an entrepreneur to use his/her personal connections and social network to acquire information both within and outside his comfort zone reduces uncertainty which promotes entrepreneurial intention and success (Jack, 2010; Ma, Huang, & Shenkar, 2011). In essence, it’s cheaper for the entrepreneur with large network to source useful information about new business ideas, funding and market knowledge that will enhance his/her entrepreneurial intention (Song, Min, Lee, & Seo, 2017). Moreover, today’s market is not traditional anymore, as such the ability to network is one of the greatest tools needed to cope with the competitive nature of business environment. Drawing from the theory of planned behaviour (TPB) the study is to extend factors that enhance entrepreneurial intention by conceptualizing the role of entrepreneurs’ competencies and entrepreneurs’ network.

Findings

Based on the review of literature above, the following propositions are therefore proposed:

P1. There is a positive relationship between entrepreneurs’ network and entrepreneurial intention

P2. There is a positive relationship between entrepreneurs’ competence and entrepreneurial intention

Conclusion

From the literature, it can be deduced that entrepreneurial intention is affected by many factors, especially in developed economies. This has created much interest to academics and policy makers trying to understand entrepreneurial intention in developing countries where unemployment and other social vices are on the increase. The study proposed the relationship between entrepreneurial network, entrepreneurial competence and entrepreneurial intention. The study if empirically validated will add to the literature on the impact of the variables on entrepreneurial intention, especially in developing countries like Nigeria.

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18 December 2019

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Ibrahim*, N. A., Bakar, M. S., Ramli, A. B., & Umar, A. (2019). Entrepreneurs Network, Entrepreneurial Competence and Entrepreneurial Intention of Northern Nigerian Universities Students. In C. Tze Haw, C. Richardson, & F. Johara (Eds.), Business Sustainability and Innovation, vol 65. European Proceedings of Social and Behavioural Sciences (pp. 45-52). Future Academy. https://doi.org/10.15405/epsbs.2019.08.5