ENTREPRENEURSHIP CAPITALS AND LIVELIHOOD STRATEGIES OF TOURISM HOST PEOPLE IN SOUTHWESTERN NIGERIA

 

K. Oyebisi BAKARE

Dept. of Family, Nutrition and Consumer Sciences

Faculty of Agriculture, Obafemi Awolowo University, Ile-Ife, Nigeria

 

 

 

Abstract

The study examined the influence of entrepreneurship capitals on livelihood strategies of host people in Southwestern Nigeria. Three states were purposively selected; Osun - Erin-Ijesha (Olumirin water falls); Ondo - Idanre (Idanre hills); and Ogun – Ikija (Olumo rock). Interview guided questionnaire was employed to elicit information from the 450 respondents, comprising 150 residents from each destination. Respondents were purposively selected in and around the neighbourhoods of the destinations. The instrument for data collection was an 18-item questionnaire administered to 450 respondents. The findings showed that linear correlation between dependent and independent variables showed that Opportunity (r=0.301, R2=0.090) showed significant relationship with livelihood strategies and explained 9% of change of livelihood strategies. The model showed significant relationship between motivation (r=0.394, R2=0.155); Risk bearing (r=0.42, R2=0.177); Skill (r=0.44, R2=0.199); and Innovation (r=0.48, R2=0.234). The livelihood strategies categorised into three showed that non-farm activities (48.22%) had about half of the total occupational activities among host people. The study concluded that host people possessed entrepreneurship capitals and engaged in non-farm activities for livelihood purposes. 

 

Keywords: Entrepreneurship, entrepreneurship capitals, quasi-entrepreneurship, tourism, livelihood strategies

 

Introduction

Critical appraisal of the rural areas revealed naturally embellished touristic assets that are promising towards sustainable rural livelihood. Rural areas in developed and developing countries of the world are of great significance in rich and abundant human and natural resources. Soltani, Angelsen, Eid, Naieni, and Shamekhi (2012) adduced that increasing evidence of the contribution of business or rural enterprises and commercial farming for minimizing rural poverty is significant. Natural endowment with pristine culture of the host people is worth leveraging on in the course of tourism for attendant panacea towards the quagmire of unemployment that is yielding abyss of insecurity and crimes in the society. Tourism is a phenomenon that often arises from resources bequeathed to destinations, often rural areas; it thus brings with it necessities for basic needs of life inform of service and products to attend to tourists who are away from their immediate borough. Tourists while in new destinations require lodging in relatively comfortable accommodation, feeding, exploring experiences that will make their tours interesting, memorable, and worthwhile. All these provisions can motivate patrons and trigger innovative thinking of potential entrepreneurs in and around host communities; who are often the custodians of the pristine culture (indigenous knowledge), natural endowment, and hospitable people that are hankered after in tourism engagements (Bakare, 2016). Taking cognisance of the natural resources in a location is a potential pull factor to increase the number of entrepreneurs as well as bridging the gap between producers and consumers hence, unlocking the deadlock of value chain of local products. However, it is not likely that research has adjudged people in the rural areas to be less energetic, less motivating, less innovative, and less skilful than their counterparts in the cities. Instead, research have it that rural people are resilient, energetic, innovative, and skilful among others. In spite of the abundance of naturally endowed tourism resources in the rural areas coupled with entrepreneurial property acquisition in the course of socialization, the rural people are still faced with livelihood challenges, such as low income, unemployment, and hunger.  It is against this background that the study seeks to examine the influence of entrepreneurship capitals on livelihood strategies of host people in Southwestern Nigeria.

 

Literature review                                                       

Entrepreneurship has been identified a way out to alleviate the challenges of unemployment and insecurity ravaging the country at the moment. Entrepreneurship has been used and defined under different concepts, such as social, economic, and physical activities with regards to livelihood accomplishments. The earliest definition of entrepreneurship sees it as an economic term which describes the process of bearing the risk of buying at certain prices and selling at uncertain prices (Di-Masi, 2000). Critical analysis of the concept revealed interplay of many assets. Based on this understanding, many scholars arrived at different definitions of entrepreneurship focusing on major subjects. Bakare (2016) had earlier identified five elements of entrepreneurship to be motivation, opportunity, risk bearing, innovation, and skill. The inference from the identification can further be ascertined from the following descriptions of entrepreneurship.

i. Risk - is the ability to take responsibility, to hope for best and withstand worse outcome. Adeyemi (2013) described entrepreneurship as courageous enough to bear the risk for quick societal development.

ii. Opportunity - is the pull characteristics that causes an action. Nwangwu (2006) opined that entrepreneurship is the willingness and the ability of an individual or a firm to identify an environmental change and exploit such an opportunity to produce goods and services for public consumption. Entrepreneurship is generally described as the ability of an individual or a group of individuals to create or discover an opportunity and utilize it to the benefit of the society, which, in turn, will bring success to the innovators and their organization (Omaruyi et al 2017).

iii. Skill - has to do with good knowledge and technicalities of the activity. Osemeke (2012) stated that entrepreneurship development refers to the process of enhancing entrepreneurial skills and knowledge through structured training and institution-building programmes.

iv. Motivation - is the urge to create, the push to make happen. Entrepreneurial motivation is a driving force that pulls or pushes people towards entrepreneurial actions (Yimamu, 2018).

v. Innovation - creation of new idea, method, or object. In Schumpeter’s view, entrepreneurs are innovators who drive the “creative destruction” process, reforming or revolutionizing the pattern of production. One of the concepts of entrepreneurship is creativity and innovation. It is concerned with innovation in the view of opportunities and risks, new approaches to problem-solving, having strategic plan to recognize opportunities and risks, and minimizing the risks that can occur (Yimamu, 2018).

Entrepreneurship is generally described as the ability of an individual or a group of individuals to create or discover an opportunity and utilize it to the benefit of the society, which, in turn, will bring success to the innovators and their organization (Nwankwo, & Okeke, 2017). According to Nwafor (2007) entrepreneurship is described as to be skilled enough (skill), confident enough (risk), creative enough (innovation), and disciplined enough to seize opportunities (opportunity) that present themselves regardless of the environmental influence. From the above definition, it is obvious that four of the five elements of entrepreneurship featured. Well, it may not be easy to have all the elements in a single individual or rounds of individuals at a go. There is a need to properly categorise entrepreneurship, bearing in mind the quantity of assets possessed. In cases where an individual seemingly possesses entrepreneurship traits that are not complementary, it becomes arduous to achieve sustainable entrepreneurship. This situation only presents a seemingly entrepreneurship hence, called quasi-entrepreneurship and persons in the category are quasi-entrepreneurs. The characteristics of seeking opportunities, taking risks beyond security, and having the tenacity to push an idea through to reality combine into a special perspective that permeates entrepreneurs (Kuratko, 2005). The submission above portend that exhibiting one trait cannot produce entrepreneurship and two or more capitals have to complement to strike the purpose, entrepreneurship.

Conceptual framework: Since inception of the concept of entrepreneurship, it has been described using one or two or more adjectives to capture the assets that culminate into it. Entrepreneurship has three dimensions: the organizational, the environmental and the individual (Dollinger, 1995). The conceptual framework in Figure 1 above presented the interaction and interdependence nexus of entrepreneurship capitals and livelihood strategies, employing two of the dimensions. It could be inferred from the figure that the five entrepreneurship capitals represented all the properties of entrepreneurship deducing from descriptions from different authors. Considering two of its dimensions (environmental and individual); motivation and opportunity are drawn from the environment - tourism resources; the remaining three (risk bearing, innovation, and skill) are individual oriented. It is not likely for a single person to have all the capitals at the initial stage of entrepreneurship take off. Often times, entrepreneurship emerges from one or more elements from each of two groups; environmental and individual dimensions. However, the combination of the five capitals from the two groups is what is described as entrepreneurship inferring from varying descriptions. Motivation and opportunity to embark on any venture are driven by resources and assets in and around the environment. Tourism constituted the environment in this case. Motivation for entrepreneurship is driven by prospects of crowd or people that will buy and use the goods and services. Engagement in entrepreneurship is pulled by emergence of patrons (tourists and guests). Both motivation and opportunity are pull factors and are vividly environmental, while risk bearing, innovation, and skill are intrinsic factors from the aspiring entrepreneurs that constitute push to recognising and seizing the opportunity offered by the environment.

Presence of motivation and opportunity often trigger the instincts of entrepreneurs.  Studies centred on the welfare outcome of household’s livelihood strategies have consistently found a positive relationship between livelihood diversification to the non-farm sector and poverty reduction (Ansoms, & McKay, 2017). There is also an increasing evidence of the contribution of business or rural enterprises and commercial farming for minimizing rural poverty (Soltani, et al 2012). A number of authors have explored the influencing factors on the choice of livelihood strategies (Babulo, Muys, Nega, Tollens, Nyssen, Deckers, & Mathijs, 2008). Leveraging on tourism, places host people at advantage of unlimited livelihood strategies that will yield combined farm and non-farm activities. Seizing the attendant opportunity in unlimited livelihood activities inherent in tourism endeavour has the tendency to sprout the entrepreneurship attributes of host people which they acquired via socialisation process which are not too different from all that will avail tourists the basics and extras to propound memorable tours. Naudes (2008) stated that an effective entrepreneurship venture fosters the production of wealth for a nation, creates jobs that utilise human resources and also reduces economic waste. Nwankwo and Okeke (2017) adduced that the integrated rural development theory is perhaps the most potent. Integrated rural development theory is a multidimensional strategy for improving the quality of life of the rural people. Tourism resources are ubiquitous in Nigeria, although, many are yet untapped. According to Perpar (2007), rural areas are isolated, economically poor, depopulated and un-mechanised. Harnessing local entrepreneurial talents and consequently, growing indigenous companies are encouraged and promoted. Also, more people that will constitute entrepreneurs and patrons for farm products will emerge. Most important positive effect on society is that entrepreneurship creates opportunities for employment, and the value of it should not be underestimated especially when unemployment is at a higher rate than before in the majority of countries world-wide and Nigeria in particular. Combining the environmental and cultural endowment to propel tourism activities comes with development by pulling crowd and other developmental infrastructure to the communities. Significant influence of the location factor including geography and distance to key facilities (such as road, market) in the choice of livelihood strategy has been further emphasized in some studies as promoting entrepreneurship (Soltani, et al 2012). The occupational base of host people is expanded with tourism resources such that there are opportunities for more livelihood activities. This is believed to translate to increased income for rural households and it also engages more demographics. It is therefore imperative that communities with tourism assets are developed to expand the livelihood activities of the host people for more sustainable and unlimited livelihood strategies. The tourism industry is one that encompasses different areas, and also creates jobs for various people such as hotels, restaurants, car rental agencies, tour companies, service stations, souvenir shops, sports equipment rentals, and much more (Abubakar, 2014).

                                                                                                             

Research methods                                                      

The study area was the southwestern Nigeria. For convenience and considering the rurality and presence of tourism resources, three states were purposively selected; Olumirin water falls in Erin-Ijesha, Osun; Idanre hills in Idanre, Ondo; and Olumo rock in Ikija -Abeokuta, Ogun. Interview guided questionnaire was employed to elicit information from 450 respondents, comprising 150 residents who were randomly selected from each destination. An inclusion criteria of residence, non-public worker, and adult age were employed. The instrument for data collection was 18-item questionnaire administered to 450 respondents. The questionnaire was sectioned into two parts, viz; entrepreneurship assets of respondents, and livelihood activities (farm and non-farm) engaged in. Four-point Likert scale was adopted ranging from strongly agree (4), agree (3), disagree (2), and strongly disagree (1). Mean value of 2.5 was taken as a criterion for ‘agree’ while mean value less than 2.5 was adjudged ‘disagree’. Data collected were presented using pie charts. The data were analysed using Factor analysis and regression statistics.

 

Analysis/study/results

Entrepreneurship capitals associated with livelihood strategies: Table 1 showed the Kaiser’s criterion employed to select factors with Eigen value of greater than 0.3 as showed in the factor analysis. Summaries of entrepreneurship assets as extracted from literature were labelled motivation, opportunity, risk-taking, innovation, and skill capitals. The study disregarded the factors (assets) that did not meet up. From the table, it could be deduced that all the summaries of the factors shown were able to represent the capitals considering the Eigen values.

Relationship between entrepreneurship capitals and livelihood strategies: A regression analysis was employed to test the relationship between entrepreneurship and factors of livelihood strategies. The Durbin–Watson statistics was in an acceptable area (1.5-2.5), therefore, The independence of errors was accepted hence the Durbin Watson ranged between 1.5 and 2.5. Opportunity (r = 0.301, R2 = 0.090) had the highest impact on livelihood strategies and explained 9% of change of livelihood strategies as the dependent variable. The finding on opportunity was not surprising as it constituted the a support for other capitals to manifest for the purpose of entrepreneurship. The finding is in a way corroborating the conceptual nexus that opportunity brings other factors into bear. The position is in agreement with Nwangwu (2006) and Omaruyi et al (2012) by describing entrepreneurship using opportunity. The model showed a significant correlation coefficient between motivation (r=0.394, R2=0.155). The finding on motivation was supported by Yimamu (2018) that described entrepreneurship using motivation as a driving force. The conceptual framework also agreed with the assertion by placing it under environmental spectrum of the entrepreneurship dimensions.  With motivation increasing by 6.5% of the variance, more livelihood strategies will be recorded. Risk bearing (r = 0.42, R2 = 0.177) showed significant correlation coefficient with livelihood strategies. This can be explained that increase by 2.2% of the variance will yield more livelihood strategies for the host people. The findings on risk bearing is in agreement with Adeyemi (2013) that described entrepreneurship as courageous enough to bear the risk for quick societal development. Skill (r = 0.44, R2 = 0.199) also showed significant correlation coefficient with livelihood strategies. The variable could increase the power of the equation 2.1. The results on skill agreed with Osemeke (2012) that identified skill as important factor in entrepreneurship undertakings. Finally, Innovation (r = 0.48, R2 = 0.234) showed significant correlation coefficient with livelihood strategies with the dependent variable increasing by 1.5%. The findings on innovation is in corroboration with (Nwankwo, & Okeke, 2017).  In total, five variables explained and interpreted 24.5% of the dependent variable. The findings on the five capitals agreed to the deduction of Nwafor (2007) that described entrepreneurship as to be skilled enough (skill), confident enough (risk), creative enough (innovation), and disciplined enough to seize opportunities (opportunity) that present themselves regardless of the environmental influence.

Farm and non-farm livelihood strategies of host people: Figure 2 showed the distribution of livelihood strategies of host people. The livelihood strategies were categorised into broad three, viz: farm (32.44%), non-farm (48.22%), and combined (21.33%). Farm category included cropping and livestock engagement; non-farm refers to any form of trading, food business, technical services (tailoring, shoe making, bricklaying, plumbing, driving, tour guiding, photography etc.). Combined referred to having any of farm and non-farm as functions of livelihood. It is not surprising to find the scenario where almost half of the host people were engaged in non-farm activities. Research have revealed that farming population is dwindling. About one third (32.44%) of the population in tourism destinations combine farming with other non-farm activities to make ends meet. This is likely due to the fact that host people crave for additional income through non-farm activities as they are limitless by weather/season, unlike farm activities.  Ansoms, & McKay (2017) found a positive relationship between livelihood diversification to the non-farm sector and poverty reduction. The corroboration is an indication that indeed non-farm activities becoming popular among rural populace. 

Distribution of respondents by livelihood strategies engaged in the rural areas: Figure 3 showed the distribution of respondents by tourism businesses being their livelihood strategies in the tourism destination areas and neighbourhoods. Eight tourism businesses were identified as livelihood strategies embarked upon by the respondents; these are entertainments, accommodation, souvenir selling, souvenir production, tour guiding, food and drinks, hair dressing, and others. The distribution of the strategies among respondents showed food and drinks (39.29%), souvenirs selling (22.7), others (16.2), hair dressing (5.99%), souvenir production (4.72%), accommodation (4.21%), entertainments (3.95%), and tour guiding (2.93%). The results is in agreement with Abubakar (2014) that adduced that tourism industry is one that encompasses different areas, and also creates jobs for various people such as hotels, restaurants, car rental agencies, tour companies, service stations, souvenir shops, sports equipment rentals, and much more.

 

Conclusion

The study offered information about the assets that culminated to entrepreneurship capitals. Entrepreneurship capitals were found to reflect partly in definitions by different authors; meaning each author viewed entrepreneurship in different perspectives but focused at achieving a common goal. From the varying descriptions of entrepreneurship, one could deduce that all the adjectives summarily portray motivation, opportunity, innovation, risk bearing, and skill as essential capitals of entrepreneurship. However, ability to exhibit the five capitals could be termed entrepreneurship. Whereas, it may not be likely for an individual to possess the five at the initial or onset stage, hence, possessing one or more of capitals from one group without complementing element(s) from the second group is quasi-entrepreneurship. The five capitals were viewed on two of the three dimensions of entrepreneurship, viz: environmental and individual. Motivation and opportunity were viewed as environmental arising from tourism resources in the area while risk bearing, innovation, and skill were viewed as intrinsic factors from individuals. The combination of these five capitals propel an activity or a result tagged entrepreneurship. Primarily, motivation and opportunity are resource bound. These will trigger the inherent ideas in terms of creativity, skill/knowledge, and ability to take responsibility. Most host people were found to be engaging in non- farm activities. It is no longer a taboo to find the rural population dabling into enterprises aside the age-long conventional farming  activities they were known for. Arrays of non-farm livelihood strategies were observed in the destinations. Definitely, tourism generated a good number of entrepreneurship activities that people engage in to enhance their livelihood.

 

Acknowledgments

This is to acknowledge my six postgraduate students who assisted during the data collection stage. I appreciate you all for making yourself available for the work gratis. God bless you all.

 

References

Abubakar, Z. (2014). Economic contribution of tourism in Nigeria. Economy & finance. Business Travel.

Adeyemi, S. L. (2013). Entrepreneurship and small business, Ilorin.

Ansoms, A., & McKay, A. (2017). A quantitative analysis of poverty and livelihood profiles: The case of rural Rwanda. Food Policy 2010. Sustainability 35, 584–598.

Babulo, B., Muys, B., Nega, F., Tollens, E., Nyssen, J., Deckers, J., & Mathijs, E. (2008).  Household livelihood strategies and forest dependence in the highlands of Tigray, Northern Ethiopia. Agricultural Systems, 98, 147–155.

Bakare, K. O. (2016). Tourism entrepreneurship and rural livelihoods in Southwestern States, Nigeria. Ph. D. thesis submitted to Obafemi Awolowo University, Ile-Ife, Nigeria.

Di-Masi, P., (2000). ‘Defining entrepreneurship’, in Financing microenterprises: Theory and practice, viewed 19 June 2016, from http://www.gdrc.org/icm/micro/define-micro.html

             Dollinger, M. (1995). Entrepreneurship: Strategies and Resources. Illinois: Irwin.

Naudes, W., 2008, Entrepreneurship in economic development, viewed 13 June 2017, from http://www.wider.Unu.edu/publications/working ers/research papers/2008GB/rp2008–2010

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Nwankwo, F. O., & Okeke, C. S. (2017). Rural entrepreneurship and rural development in Nigeria. Africa’s Public Service Delivery and Performance Review ISSN: (Online) 2310-2152, (Print) 2310-2195

Okeke, M. I., & Eme, O. I. (2014). ‘Challenges facing entrepreneurship in Nigeria’, Sinaporean Journal of Business Economics, and Management Studies 3(5), 18–34. https://doi.org/10.12816/0010956

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Osemeke, A. (2012). Entrepreneurial development and interventionist agencies in Nigeria. International Journal of Business Social Sciences, 3(8), 42.

Perpar, A. (2007). Characteristics of rural area in Slovenia, advantages, weakness, possibilities for improvement of present situation from view point of sustainable rural development, viewed 2 June 2014, from http://www.agri.hr/jcea/issues/ jcea8-2/Rdf/jcea82-14.pdf

Soltani, A., Angelsen, A., Eid, T., Naieni, M. S. N., & Shamekhi, T. (2012). Poverty, sustainability, and household livelihood strategies in Zagros, Iran. Ecological Economics, 79, 60-70.

Yimamu, N. (2018). Entrepreneurship and entrepreneurial motivation. Thesis submitted to Centria University of Applied Sciences.

Tables and Figures

 

Table 1: Factor analysis showing assets for entrepreneurship capitals associated with livelihood strategies of host people

 

Table 2: Regression analysis of entrepreneurship capitals and livelihood strategies

          

Figure1: Conceptual framework for Entrepreneurship Capitals and Livelihood Strategies

Source: Study, 2019.

 

 

Figure 2: Farm and non-farm livelihood strategies of host people

Source: Study, 2019.

 

Figure 3: Non-farm livelihood activities

Source: Study, 2019.