ASSESSING THE ROLE OF ENTREPRENEURIAL MANAGEMENT PRACTICES IN PROMOTING INNOVATION AND JOB CREATION EVIDENCE FROM SELECTED STATES IN SOUTHWEST, NIGERIA

Abstract

Entrepreneurship management is a prominent contributor of innovation and job creation, especially in developing countries, where formal employment opportunities are scarce. However, there are still scarce empirical insights on what type of managerial orientation that leads to innovation-based job growth among SMEs. This research investigated the contributions of entrepreneurial management practice (proactiveness, innovativeness, and risk taking) on innovation capability and employment generation in small and medium scale enterprises (SMEs) in Southwest Nigeria. The research employed a mixed method approach of EMA surveys and qualitative interviews. Data were obtained from 784 SMEs operating in the states of Lagos and Ekiti, engaged in varying sectoral activities in the Nigerian’s SME space. Regression and structural equation modelling (SEM) analysis was utilized using SmartPLS for the quantification of hypothesized relationships, while qualitative insights emerged from thematic analysis of interviews with a number of SME owners. Results showed that the effect of EM on IC (β = 0.48, p < 0.001) and employment generation (β = 0.39, p < 0.01) was positive and significant. Innovation was also shown to mediate the relationship between entrepreneurial management and employment generation (indirect effect, β = 0.27, CI = [0.15, 0.41]), accounting for 56% of the variance in job outcomes. The research contributes to the dynamic capabilities view by revealing that the agility of the top managers and the culture of innovation within the firm are the key enablers that allow them to turn the firm's entrepreneurial energy into a sustainable stream of new jobs. Policy makers need to support regional innovation clusters and consolidate SME management training schemes to improve competitiveness and job creation.