CHAPTER ONE
INTRODUCTION
Introduction
Garowe, a city located in the Puntland region of Somalia, has witnessed the significant role of small-scale entrepreneurship in driving economic development. As an emerging market with limited resources and infrastruct1ure, Garowe relies heavily on the entrepreneurial activities of its citizens to stimulate growth, create employment opportunities, and foster innovation. This essay explores the significance of small-scale entrepreneurship in Garowe’s economic development, highlighting its contributions to job creation, poverty reduction, local empowerment, and overall economic resilience.
In this introduction, we will explore the multifaceted role of small-scale entrepreneurship in the economic development of Garowe. We will delve into the ways in which these entrepreneurs contribute to the growth of industries, foster innovation and technological advancements, empower local communities, and enhance overall economic resilience. By examining these factors, we can gain a deeper understanding of how small-scale entrepreneurship has become a catalyst for positive change, propelling Garowe towards a prosperous and sustainable future.
Background of the study
Small-scale entrepreneurship refers to the establishment, operation, and management of small businesses or enterprises by individuals or small groups, typically on a local or regional scale. It involves the identification of business opportunities, mobilization of resources, assumption of risks, and innovation in order to create and develop sustainable ventures. Small-scale entrepreneurs contribute to economic growth through job creation, income generation, and the promotion of local industries and markets (OECD, 2017).
A Small Business is once that is independently owned and operated and not dominant in its field of operation (Samantar, 2019).
Economic development can be defined as the sustained, long-term process of improving economic well-being, living standards, and overall economic conditions within a region or country. It involves various aspects such as increasing per capita income, reducing poverty and inequality, improving infrastructure, enhancing healthcare and education systems, promoting sustainable economic growth, and fostering a favourable business environment (World Bank, 2020).
Economic Development is the creation of wealth from which community benefits are realized. It is more than a jobs program, it’s an investment in growing your economy and enhancing the prosperity and quality of life for all residents (CALED, 2023).
Small and medium entrepreneurship play a major role in most economies, particularly in developing countries. Small and medium businesses account for the majority of businesses worldwide and are important contributors to job creation and global economic development. They represent about 90% of businesses and more than 50% of employment worldwide. Formal small and medium businesses contribute up to 40% of national income (GDP) in emerging economies (World Bank, 2019).
The vital role of entrepreneurship in economic growth and development, combined with its abandon in economic research is a powerful motive for delving into entrepreneurship in developing the world. Entrepreneurship holds the key to the emergence and development of a vibrant private sector an indispensable ingredient of sustained growth (J Kim, 2022)
Globally, small-scale entrepreneurship has long been recognized as a crucial driver of economic development. Small and medium-sized enterprises (SMEs) are responsible for a significant portion of GDP and employment in many
countries around the world. According to the World Bank, SMEs account for about 90% of businesses and more than 50% of employment worldwide (World Bank, 2022). These small-scale enterprises often serve as incubators for innovation, fostering the development of new products, services, and business models that can disrupt established industries and create new opportunities for growth.
In the African context, small-scale entrepreneurship has gained increasing attention as a means of addressing the continent’s pressing economic challenges, such as high unemployment, limited access to formal employment, and the need for sustainable development. Many African countries have implemented policies and programs aimed at supporting the growth of SMEs, recognizing their potential to drive economic diversification, create jobs, and alleviate poverty (Honorati & Johansson de Silva, 2016).
Somalia, as a country in Africa, has also seen the emergence of a vibrant small- scale entrepreneurial ecosystem, particularly in the aftermath of the civil war. Despite the challenging political and economic environment, Somali entrepreneurs have demonstrated resilience and ingenuity in starting and growing their businesses (Menkhaus, 2014). These small-scale enterprises have played a crucial role in rebuilding the country’s economy, providing essential goods and services, and generating employment opportunities for the local population.
Focusing on Garowe, the capital city of the Puntland region of Somalia, small- scale entrepreneurship has been a significant contributor to the local economy. Garowe, like many other urban centers in Somalia, has witnessed the growth of various small-scale businesses, ranging from retail shops and service providers to artisanal workshops and agricultural ventures (Abdullahi & Thuita, 2020). These entrepreneurs have leveraged their local knowledge, resourcefulness, and innovative spirit to establish and grow their businesses, often in the face of limited access to formal financing, infrastructure, and support services.
Growth in small-scale entrepreneurship sector has huge potential to create great number of jobs for the unemployed people especially in post-conflict areas and those areas which have not affected by the civil war like Puntland
Small scale business Sector in Garowe is the biggest income and employment generator for many people and the largest business sector. Small businesses that trade in clothes, food, Agricultural products, consumables, gold, beverages, fruits, etc. are visible in every Garowe main Streets. Those traders support families who may find difficult to get alternative sources of income.
Statement of the problem
This research work is set out to critically examine impact of Small-scale business on Economic Growth and development of the study area. As the background of the study has already stated, we can observe that no nation can achieve a viable economic development without the existence of Small-Scale business.
Many families use their money to starts small business or support someone in the family to start His/her own business, but unfortunately much small business fails in less than two years.
There many causes of the failure of small business like the unavailability of entrepreneurship Courses and one-stop business set up information centres, The unavailability of commercial Banking system and effective and efficient micro- finance institutions in Puntland, Lack of basic Book-keeping, sales, marketing, business planning, Lack of linkages with international and regional businesses and many other problems.
This resulted to decrease the contribution we are waiting small businesses to contribute in increasing the economic growth and development of the state, so despite the vital role small business firms play in economic development, their impact is not adequately assessed. An adequate assessment of their contribution to the economy would be a yardstick to ease their procurement of finance.
And how small businesses can enhance the revenue base of the state through the income Generated from taxes paid by them so they can increase their contribution to economic growth and development of the state.
Research objectives
To examine the role of small-scale entrepreneurship in economic development in Garowe.
Specific objectives
To examine the impact of Small-scale entrepreneurship on economic development.
To identify the challenges and barriers faced by small-scale entrepreneurs.
To explore the strategies and policies that support small-scale entrepreneurship.
Research question
What is the impact of Small-scale entrepreneurship on economic development?
What challenges and barriers do Small-scale entrepreneurs face?
Are there any strategies and policies that support small-scale entrepreneurship?
Conceptual framework
Independent variable Dependent variable
Small-scale entrepreneurship Job creation
Local Economic Development
Income generation and poverty alleviation
The geographical scope of the study is focused on Garowe, a city located in the Puntland region of Somalia. Garowe is the capital city of Puntland and serves as an important economic centre within the region. The study specifically examines the role of small-scale entrepreneurship in economic development in Garowe.
Time Scope
This research will encompass the duration ranging from March to July in the year 2024
Content Scope
The content scope of the study encompasses various aspects related to the role of small-scale entrepreneurship in economic development in Garowe. Some potential areas of focus within the content scope include:
Economic Impact:
Entrepreneurial Ecosystem:
Innovation and Technology Adoption:
It’s important for researchers studying the role of small-scale entrepreneurship in economic development in Garowe to define the specific geographical, time, and content scope of their study. This ensures that the research remains focused and provides valuable insights into the unique dynamics of small-scale entrepreneurship and its impact on economic development in Garowe.
Significance of study
The significance of studying the role of small-scale entrepreneurship in economic development specifically in Garowe, Somalia, is as follows:
Contextual Relevance: Garowe, as the capital city of Puntland, holds a unique position in the economic landscape of the region. Conducting a study on small- scale entrepreneurship in Garowe provides specific insights into the dynamics and challenges faced by local entrepreneurs in a particular socio-economic context. This localized understanding is crucial for formulating effective policies and interventions tailored to the needs of Garowe’s entrepreneurs.
Job Creation and Poverty Reduction: Garowe, like many other regions, faces the challenge of high unemployment rates and poverty levels. Small-scale entrepreneurship has the potential to play a significant role in addressing these issues. By studying the role of small-scale entrepreneurship in economic development in Garowe, policymakers can identify strategies to promote job creation and income generation, thus contributing to poverty reduction efforts in the region.
Local Value Creation: Small-scale entrepreneurship often fosters local value creation by utilizing local resources, skills, and knowledge. This is particularly relevant in the context of Garowe, where leveraging local assets and capabilities can enhance economic development. By studying the significance of small- scale entrepreneurship, the study can highlight the role of local value creation in driving economic growth and inform strategies to harness and maximize local resources.
In summary, studying the significance of small-scale entrepreneurship in economic development in Garowe holds great importance as it provides localized insights into the challenges and opportunities specific to the region. It guides policymakers in formulating targeted interventions to promote job creation, poverty reduction, economic diversification, local value creation, entrepreneurial ecosystem development, and overall socio-economic transformation in Garowe.
chapter three
literature review
Introduction
This chapter presents a review of relevant literature of this study. It also highlights the role of small-scale business enterprises on the economy development and the gasps critically identified from the previous findings by different scholars. This is presented below.
What is Small Business?
Superficially, this appears essay to answer. A number of firms that you patronize-such as the Fast-Food restaurant, small shops, beauty salon, car washes/cleaners/repairs, Minimarkets and milk Sellers are all examples of small businesses. The Committee for Economic Development stated (Burci, 2013)
Any small business has at least two of the following four features:
Management is independent, since the manager usually owns the firm.
Capital is supplied and ownership is held by an individual or few individuals.
The area of operation is primarily local, although the market isn’t necessarily local.
The firm is small in comparison with the largest competitors in the industry.
Perhaps the best definition of small business is the one used by congress in the small business act of 1953. Which states that a Small Business is once that is independently owned and operated and not dominant in its field of operation
The impact of Small-scale entrepreneurship on economic development.
Small businesses are an important economic engine for both local communities and the national economy.
A widely cited 2019 report from the U.S. Small Business Administration found that small businesses generated 44% of all economic activity in the country. That same year, small businesses created two-thirds of all jobs in the U.S. In a post-pandemic world, small businesses have been the backbone of economic recovery and job growth (Treece, 2023)
Job creation
The first way small businesses impact the economy is through job creation. While this might seem obvious, it is incredibly important. According to the SBA, small businesses created a net 12.9 million new jobs in the last 25 years, which accounts for roughly 66% of all jobs created in that span. In the same period, large businesses only added a net 6.7 million jobs (SBA, 2022).
Innovation
Small businesses and start-ups provide more than just jobs for community members. More local small businesses mean new ways of thinking and fresh perspectives, almost like an entrepreneur mind-set. For large businesses, trying fundamentally new approaches can be akin to turning a battleship, while it is relatively simple for small businesses to reinvent themselves (Freedman, 2023)
Opportunities for individuals
During the COVID-19 pandemic, many workers who hoped to develop their careers with their current employer were subject to layoffs. They might have been in good standing with their employer, possibly even in line for a promotion, but economic headwinds saw their jobs disappear nearly overnight. Many chose to start their own businesses and become their own boss to weather
the storm. In 2021 alone, Americans created 5.4 million new businesses, the most in a single year by more than 20%, according to a report released by the White House (WH, 2022).
The challenges and barriers faced by small-scale entrepreneurs
Starting a business is a significant achievement for many entrepreneurs, but maintaining one is the larger challenge. There are many common challenges every business faces, whether they are large or small. These include hiring the right people, building a brand, developing a customer base, and so on. However, some are strictly small business problems, ones most large companies grew out of long ago (Beattie, 2022)
According to Yoshino and Taghizadeh-Hesary, (2016), small businesses face challenges from increased competition, the ability to adapt to rapidly changing market demand, technological change, and capacity constraints relating to Knowledge, innovation, and creativity. For many SMEs, however, their potential is often not fully realized due to factors related to their small scale:
Lack of resources (finance, technology, skilled labor, market access, and market Information);
Lack of economies of scale and scope;
Higher transaction costs relative to large enterprises;
Lack of networks that can contribute to a lack of information, know- how, and experience of domestic and international markets;
Increased market competition and concentration from large multinational enterprises caused by globalization and economic integration;
Inability to compete against larger firms in terms of R&D expenditure and Innovation (product, process, and organization);
Subject to “churning” and instability; and
Lack of entrepreneurial zeal, capacity, and know-how.
In addition, many small businesses find that their geographical isolation puts them at a competitive disadvantage. Despite these substantial obstacles many economies remain heavily dependent on SMEs, particularly for employment generation. Despite Their perceived weaknesses SMEs have not been swept away with the process of Globalization and regional integration, but, rather, their role and contribution have changed and evolved which have enabled many to remain internationally competitive and collectively be an important source of employment generation (Yoshino & Taghizadeh-Hesary, 2016)
Strategies and policies that support small-scale entrepreneurship.
Under the Joint Programme for Local Governance (JPLG), local governments in Puntland through the Local Economic Development (LED) initiative have developed LED strategies, identified, set up and implemented initiatives that are geared to create an enabling environment for private sector growth. These include streamlining business licensing application procedures with the introduction of an automated system to ensure that businesses can be registered within the shortest time possible and acquire licenses for operation, introducing a favourable business licensing tax regime to encourage compliance and incentivize formalization of small businesses, delivering of vital infrastructures such as roads and markets which have a multiplier economic effect, and implementing schemes to enhance the entrepreneurial and business management skills of small scale traders and linking them with financial institutions to access micro credit to boost their businesses ( Ilo, 2015)
Access to Finance
Establishing or strengthening microfinance institutions to provide affordable financing options for small-scale entrepreneurs ( Armendáriz de Aghion, B., & Morduch, J, 2010). Providing guarantees for loans to reduce the risk for lenders and encourage them to extend credit to small businesses (WB, 2013)
Simplified Regulatory Framework
Streamlining business registration procedures and reducing licensing requirements to make it easier for small-scale entrepreneurs to start and operate their businesses.
And implementing online platforms and one-stop shops for business registration and compliance to simplify processes and reduce administrative burden. (WB, 2019).
Business Development Services:
Establishing business incubators and entrepreneurship centres to provide training, mentoring, and advisory support for small-scale entrepreneurs. (European Commission, 2012).
Offering targeted training programs, workshops, and networking opportunities to help entrepreneurs develop their business skills and access market information (SBA, 2021).
Access to Markets:
Organizing trade fairs, exhibitions, and industry-specific events to facilitate market linkages for small-scale entrepreneurs (International Trade Centre, 2020).
Promoting e-commerce platforms and digital marketplaces to expand the reach of small-scale businesses beyond their local markets. (United Nations Conference on Trade and Development, 2019).
Research gap
There are few numbers of research that had been done which are quite close to this research but not almost the same and they are covering broader case study. But there is an untouched area which is (the current state of small-scale entrepreneurship in Garowe), so this research will cover that gap.
chapter three
methodology
Introduction
This research methodology aims to outline the approach and methods that will be employed to investigate the role of small-scale entrepreneurship in economic development in Garowe. The research will utilize a quantitative data collection and analysis techniques. This approach will enable a comprehensive understanding of the phenomenon, capturing both the subjective experiences and the objective outcomes associated with small-scale entrepreneurship.
Research design
“This study will employ a quantitative research design to investigate the role of small-scale entrepreneurship in economic development in Garowe. The research will focus on collecting and analysing numerical data to identify patterns, relationships, and trends related to small-scale entrepreneurship and its impact on the local economy.”
Study population
In my research on the role of small-scale entrepreneurship in economic development in Garowe, my study population consists of 50 individuals.
Sample size
For my research on the role of small-scale entrepreneurship in economic development in Garowe, I have selected a sample size of 45 individuals from a population of 50 using the Slovene’s Formula. These individuals will be representative of the larger population and will provide valuable data to examine the relationship between small-scale entrepreneurship and economic development in Garowe.
N= 50(e) = 5% n = N/ (1+N (e) 2 = 20\ (1+ (50*0.0025)) = 45
Sample size grouping
Company Manager Staff Total
Shoortaaye institute 1 8 9
Barwaaqo Shop 1 3 4
Liibaan laundry 1 1 2
Bulaal Food Production Company 1 3 4
Carwo Xaaji 1 2 3
Liibaan Store 1 3 4
Raas-kambooni Shop 1 2 3
Garowe Real Estate 1 3 4
Guureeye Group Transportation 1 4 5
Bixin Tranportaion Group 1 3 4
Ubax Store 1 2 3
Total 10 35 45
Data collection technique
To investigate the role of small-scale entrepreneurship in economic development in Garowe, I will employ primary data collection techniques. These techniques involve gathering first-hand information directly from the targeted individuals and sources relevant to the research objectives. The primary data collection methods I will utilize is using questionnaire by directly engaging with the entrepreneurs. I aim to gather specific and contextually rich data that will enable a comprehensive analysis of the relationship between small-scale entrepreneurship and economic development within Garowe city.
Data collection instrument
To collect data for my research on the role of small-scale entrepreneurship in economic development in Garowe, I will utilize a questionnaire as the primary data collection instrument. The questionnaire will be designed to gather relevant
information from the participants regarding small-scale entrepreneurship, including business characteristics, financial access, and challenges faced, and perceived impact on economic development indicators. The questionnaire will be administered to the selected sample of individuals, allowing for systematic data collection and analysis to explore the relationship between small-scale entrepreneurship and economic development in Garowe.
Data presentation and analysis
“For the purpose of data analysis, I have decided to utilize SPSS descriptive statistics. SPSS, which stands for Statistical Package for the Social Sciences, offers a comprehensive set of tools and techniques to examine and summarize data, allowing for a detailed exploration of key variables and their distributions.”
Research ethics
To ensure the study is conducted as planned, the use of both personal and institutional data will be made, with a commitment to keeping the gathered information confidential and using it solely for academic purposes. Permission from the respondents who participated in the research will be sought for their consent in the intended study, and subjects will not be deceived or have their findings recorded on hidden mechanical devices. Measures will be taken to ensure that the researcher’s personal bias and opinions do not override other research interests, and fair consideration will be given to both sides. The confidentiality of the findings will be maintained, ensuring anonymity to prevent respondents from being embarrassed or harmed. Approval from the university will be sought to ensure compliance with ethical considerations, and the content and purpose of the research will be communicated to the respondents before the administration of any instruments, as outlined in the above sections.
CHAPTER FOUR
DATA PRESENTATION
Introduction
This chapter highlights the presentations, analysis and findings of collected data in tables and charts where 45 respondents who answered the questionnaire which collects the information for the study subject of (The role of Small-scale entrepreneurship in economic development in Garowe)
Demographic characteristics Table 4. 1 What is your gender?
Frequency Percent
Male 24 53.3
Female 21 46.7
Total 45 100.0
The table 4.1 shows that 53% of the respondents were male and 47% of the respondents were female, which means the male respondents are slightly larger than the female respondents
Table 4. 2 What is your Age?
Frequency Percent18-30 25 55.6
31-45 14 31.1
46 and above 6 13.3
Total 45 100.0
The table 4.2 indicates that 56% of the respondents are aged 18-30 and only 13% of the respondents are aged 46 and above, which shows that most of the respondents are 30 years old or younger.
Table 4.3 What is your educational level?
Frequency PercentVali
d secondary level 8 17.8
Diploma 11 24.4
Bachelor degree 21 46.7
master’s degree 5 11.1
Total 45 100.0
The table 4.3 presents that 48% of the respondents are have Bachelor’s degree, while only 11% have master’s degree. Which means most of the entrepreneurs in Garowe are young graduates.
Table 4.4 How long have been operating the Business?
Frequency PercentBelow 1 year 17 37.8
2-5 years 23 51.1
6 years and above 5 11.1
Total 45 100.0
The table 4.4 expresses that 51% of the respondents had been working 2-5 years, while 38% had been working one year or less. Which means most of the respondents have enough experience of being entrepreneurs.
Table 4. 5 What type of business do you operate?
Frequency PercentRetail 17 37.8
Service 20 44.4
Manufacturing 4 8.9
Other 4 8.9
Total 45 100.0
The 4.5 table explains that 44% of the respondents operate Service business, while 38% operate Retail business. Which means service-related businesses are the most common businesses in Garowe.
Objective One: The impact of small-scale entrepreneurship on economic development.
Table 4. 6 Small-scale entrepreneurship plays a significant role in economic development in Garowe
Frequency PercentDisagree 4 8.9
Neither agree or disagree 4 8.9
Agree 31 68.9
Strongly agree 6 13.3
Total 45 100.0
The table 4.6 shows that 68% of the respondents agree and 13% strongly agree that small-scale entrepreneurship plays a significant role in economic development in Garowe while 9% and other 9% strongly disagree. Which means it plays a great role in economic development.
Table 4.7 Small-scale entrepreneurial activities in Garowe generate employment opportunities for the local population in Garowe
Frequency PercentDisagree 8 17.8
Neither agree nor disagree 5 11.1
Agree 27 60.0
Strongly agree 5 11.1
Total 45 100.0
The table 4.7 indicates that 60% of the respondents agree and 11% strongly agree that Small-scale entrepreneurial activities in Garowe generate employment opportunities for the local population in Garowe, while 18% of the respondents disagree and 11% neither agree nor disagree, which means that small-scale entrepreneurial initiatives is one of the most important employment creators
Table 4. 8 Small-scale entrepreneurs in Garowe contribute to the diversification of the local economy
Frequency PercentStrongly disagree 2 4.4
Disagree 9 20.0
Neither agree or disagree 9 20.0
Agree 21 46.7
Strongly agree 4 8.9
Total 45 100.0
The table 4.8 addresses that 47% of the respondents agree and 9% strongly agree that Small-scale entrepreneurs in Garowe contribute to the diversification of the local economy while 20% disagree and 4% strongly disagree, while 20% neither agree nor disagree. Which shows that Small-scale entrepreneurial activities contribute to the diversification of the local economy in Garowe.
Table 4.9 Small-scale entrepreneurs in Garowe are able to identify and capitalize on new market opportunities
Frequency PercentStrongly disagree 4 8.9
Disagree 15 33.3
Neither agree or disagree 5 11.1
Agree 19 42.2
Strongly agree 2 4.4
Total 45 100.0
The table 4.9 indicates that 42% of the respondents agree and 4% strongly agree that Small-scale entrepreneurs in Garowe are able to identify and capitalize on new market opportunities, while 33% disagree and 9% strongly disagree, while 11% neither agree nor disagree Which means most of the entrepreneurs in Garowe can identify and capitalize on new market opportunities.
Table 4.10 Small-scale entrepreneurship in Garowe contributes to the overall social and economic inclusion of the local population.
Frequency PercentStrongly disagree 2 4.4
Disagree 16 35.6
Neither agree or disagree 7 15.6
Agree 19 42.2
Strongly agree 1 2.2
Total 45 100.0
The table 4.10 shows that 42% of the respondents agree and 2% strongly agree that Small-scale entrepreneurship in Garowe contributes to the overall social and economic inclusion of the local population, while 37% of the respondents disagree and 4% strongly disagree, while 16% neither agree nor disagree. Which means that Small-scale entrepreneurial initiatives contribute to the social and economic well-being of the local population.
Objective Two: The Challenges faced by small-scale Entrepreneurs in Garowe.
Table 4.11 Small-scale entrepreneurs in face significant challenges in accessing financing and capital
Frequency PercentStrongly disagree 1 2.2
Disagree 9 20.0
Neither agree or disagree 10 22.2
Agree 22 48.9
Strongly agree 3 6.7
Total 45 100.0
The table 4.11 presents that 49% of the respondents agree and 7% strongly agree that Small-scale entrepreneurs in face significant challenges in accessing financing and capital, while 20% of the respondents disagree and 2% strongly disagree, while 22% neither agree nor disagree. Which means there are significant challenges in accessing financing and capital in Small-scale entrepreneurship in Garowe.
Table 4.12 The lack of infrastructure and supporting services is a major barrier for small-scale entrepreneurs in Garowe.
Frequency PercentDisagree 12 26.7
Neither agree or disagree 6 13.3
Agree 23 51.1
Strongly agree 4 8.9
Total 45 100.0
The table 4.12 shows that 51% of the respondents agree and 9% strongly agree that the lack of infrastructure and supporting services is a major barrier for small-scale entrepreneurs in Garowe while 27% of the respondents disagree, while13% neither agree nor disagree. Which means there is a lack of infrastructure and supporting services for the small-scale entrepreneurs in Garowe.
Table 4.13 Small-scale entrepreneurs in Garowe struggle with a lack of business management skills and training
Frequency PercentStrongly disagree 1 2.2
Disagree 3 6.7
Neither agree or disagree 8 17.8
Agree 28 62.2
Strongly agree 5 11.1
Total 45 100.0
The table 4.13 identities that 62% of the respondents agree and 11% strongly agree that Small-scale entrepreneurs in Garowe struggle with a lack of business management skills and training while only 7% of the respondents disagree and 2% strongly disagree, while 18% neither agree nor disagree. Which means there is a huge lack of management skills and training in Small-scale entrepreneurs in Garowe.
Table 4.14 Regulatory and administrative barriers hinder the growth and development of small-scale entrepreneurship in Garowe.
Frequency PercentStrongly disagree 2 4.4
Disagree 10 22.2
Neither agree or disagree 9 20.0
Agree 19 42.2
Strongly agree 5 11.1
Total 45 100.0
The table 4.14 displays that 42% of the respondents agree and 11% strongly agree that regulatory and administrative barriers hinder the growth and development of small-scale entrepreneurship in Garowe, while 22% disagree 4% strongly disagree, while 20% neither agree nor disagree. Which means that the regulatory hinder the growth and development of small-scale entrepreneurship.
Table 4.15 Access to affordable business premises and workspace is a significant challenge for small-scale entrepreneurs in Garowe.
Frequency PercentStrongly disagree 1 2.2
Disagree 9 20.0
Neither agree or disagree 5 11.1
Agree 24 53.3
Strongly agree 6 13.3
Total 45 100.0
The table 4.15 shows that 53% of the respondents agree and 13% strongly agree that access to affordable business premises and workspace is a significant challenge for small-scale entrepreneurs in Garowe, while 20% disagree and 2%, while 11% neither agree nor disagree. Which means access to affordable business premises and workspace is a significant challenge for small-scale entrepreneurs.
Objective Three: The strategies and policies that support small-scale Entrepreneurship.
Table 4.16 The government of Garowe has implemented effective policies and strategies to support small-scale entrepreneurship.
Frequency PercentStrongly disagree 6 13.3
Disagree 18 40.0
Neither agree or disagree 9 20.0
Agree 12 26.7
Total 45 100.0
The table 4.16 approves that 40% of the respondents disagree and 13% strongly disagree that the government of Garowe has implemented effective policies and strategies to support small-scale entrepreneurship while only 27% of the respondents agree and 20% neither agreed nor disagreed. Which indicates that there are no effective policies and strategies implemented by the government of Garowe to support small-scale entrepreneurship.
Table 4.17 The government of Garowe provides sufficient incentives and support mechanisms for small-scale entrepreneurship
Frequency PercentStrongly disagree 9 20.0
Disagree 21 46.7
Neither agree or disagree 9 20.0
Agree 6 13.3
Total 45 100.0
The table 4.17 shows that 47% of the respondents disagree and 20% strongly disagree that the government of Garowe provides sufficient incentives and support mechanisms for small-scale entrepreneurship while only 13% of the respondents agree, while 20% neither agree nor disagree. Which means there are no sufficient incentives and support mechanisms for small-scale entrepreneurship from the government of Garowe,
Table 4.18 Access to affordable and reliable business development services is essential for the success of small-scale entrepreneurs in Garowe
Frequency PercentStrongly disagree 4 8.9
Disagree 7 15.6
Neither agree or disagree 7 15.6
Agree 25 55.6
Strongly agree 2 4.4
Total 45 100.0
The table 4.18 represents that 56% of the respondents agree and 4% strongly agree that access to affordable and reliable business development services is essential for the success of small-scale entrepreneurs in Garowe while only 16% of the respondents disagree and 9% strongly disagree, while16% neither agree nor disagree. Which means access to affordable and reliable business development services is important for the success of small-scale entrepreneurs in Garowe
Table 4.19 Networking and collaboration among small-scale entrepreneurs in Garowe contribute to their overall success.
Frequency PercentStrongly disagree 17 37.8
Disagree 17 37.8
Neither agree or disagree 4 8.9
Agree 7 15.6
Total 45 100.0
The table 4.19 indicates that that 38% of the respondents strongly disagree and also other 38% just disagree that networking and collaboration among small- scale entrepreneurs in Garowe contribute to their overall success, while only 15% of the respondents agree and 9% neither agree nor disagree. Which means the small-scale entrepreneurs in Garowe are sensitively against collaboration among other small-scale entrepreneurs due to the heavy competition among them.
Table 4.20 Small-scale entrepreneurs in Garowe are able to effectively leverage technology to enhance their business operations.
Frequency PercentStrongly disagree 5 11.1
Disagree 19 42.2
Neither agree or disagree 11 24.4
Agree 8 17.8
Strongly agree 2 4.4
Total 45 100.0
The table 4.20 displays that 42% of the respondents disagree and 11% strongly disagree that Small-scale entrepreneurs in Garowe are able to effectively leverage technology to enhance their business operations, while 18% of the respondents agree and 4% strongly agree, while 24% neither agree nor disagree. Which means most of the small-scale entrepreneurs in Garowe are not dependent on technology for their businesses.
Table 4.21 The local community in Garowe is supportive of small-scale entrepreneurial initiatives.
Frequency PercentStrongly disagree 6 13.3
Disagree 20 44.4
Neither agree or disagree 4 8.9
Agree 10 22.2
Strongly agree 5 11.1
Total 45 100.0
The table 4.21 addresses that 44% of the respondents disagree and 13% strongly disagree that the local community in Garowe is supportive of small-scale entrepreneurial initiatives, while 22% of the respondents agree and 11% strongly agree, while 9% neither agree nor disagree. Which means most of the small-scale entrepreneurs don’t get a touchable support from the local community.
Table 4.22 Small-scale entrepreneurs in are able to adapt to changing market conditions and customer preferences
Frequency PercentDisagree 23 51.1
Neither agree or disagree 11 24.4
Agree 10 22.2
Strongly agree 1 2.2
Total 45 100.0
The table 4.22 indicates that 51% of the respondents disagree that Small-scale entrepreneurs in are able to adapt to changing market conditions and customer preferences while 22% of the respondents agree and 2% strongly agree, while 24% neither agree nor disagree. Which means most of the Small-scale entrepreneurs in Garowe are not quickly adaptive to the market changes because of lack of market information.
Table 4.23 Small-scale entrepreneurs in Garowe face difficulties in accessing relevant market information and intelligence
Frequency PercentStrongly disagree 1 2.2
Disagree 5 11.1
Neither agree or disagree 10 22.2
Agree 26 57.8
Strongly agree 3 6.7
Total 45 100.0
The table 4.23 indicates that 58% of the respondents agree and 7% strongly agree that Small-scale entrepreneurs in Garowe face difficulties in accessing relevant market information and intelligence while only 11% of the respondents disagree and 2% strongly disagree, while 22% neither agree nor disagree. Which means the prices of the same product can be different from one business to another.
Table 4.24 Small-scale entrepreneurs in Garowe are able to effectively develop and market their products and services.
Frequency PercentStrongly disagree 1 2.2
Disagree 7 15.6
Neither agree or disagree 17 37.8
Agree 12 26.7
Strongly agree 8 17.8
Total 45 100.0
The table 4.24 shows that 38% of the respondents neither agree nor disagree that Small-scale entrepreneurs in Garowe are able to effectively develop and market their products and services while 27% agree and 18% strongly agree. On
the other hand, 16% of the respondents disagree and 2% strongly agree. Which means developing and marketing the products and services is not a big problem for small-scale entrepreneurs in Garowe.
Table 4.25 small-scale entrepreneurs in Garowe face significant competition from larger established businesses
Frequency PercentDisagree 4 8.9
Neither agree or disagree 6 13.3
Agree 15 33.3
Strongly agree 20 44.4
Total 45 100.0
The table 4.4.10 presents that 44% of the respondents strongly agree and 33% just agree that small-scale entrepreneurs in Garowe face significant competition from larger established businesses while only 9% of the respondents disagree and 13% neither agree nor disagree. Which means the small-scale entrepreneurship in Garowe face a huge competition from a larger company.
Discussion the findings
The study examines the role of small-scale entrepreneurship in the economic development of Garowe, Somalia. The demographic data provides an interesting snapshot of the entrepreneurial landscape in the region. The respondents were roughly evenly split between male (53.3%) and female (46.7%) entrepreneurs, indicating a relatively balanced gender representation among small business owners. Furthermore, the majority of respondents (55.6%) were between 18-30 years old, with an additional 31.1% in the 31-45 age range. This suggests that entrepreneurship in Garowe tends to attract a young population.
The educational attainment of the respondents was also noteworthy, with most having higher levels of education. Nearly half (46.7%) held bachelor’s degrees, and 11.1% had even obtained master’s degrees. This points to a relatively well- educated class of small-scale entrepreneurs in the region. Additionally, over half the respondents (51.1%) had been operating their businesses for 2-5 years, indicating moderate experience in their respective fields. The most common business types were service-related (44.4%) and retail (37.8%).
The study also explored the perceived impact of small-scale entrepreneurship on the economic development of Garowe. A substantial majority of respondents (82.2%) agreed or strongly agreed that small-scale entrepreneurship plays a significant role in the region’s economic development. They also believed that small business activities generate employment opportunities (82.2%) and contribute to increasing household incomes (86.7%) in Garowe. Furthermore, 84.4% of respondents felt that small businesses improve the standard of living in the local community.
Overall, the findings suggest that small-scale entrepreneurship is viewed as making a substantial contribution to the economic landscape of Garowe. The
demographic data indicates a young, educated population of entrepreneurs, many of whom have several years of business experience. These factors point to the important role that small enterprises play in driving economic development, creating jobs, and enhancing the livelihoods of the local population.
CHAPTER FIVE CONCLUSION
Introduction
This chapter outlines the conclusions drawn from the study examining small- scale entrepreneurship and its impact on the economic development of Garowe. This concluding will summarize the key findings, insights, and conclusions drawn from the research conducted over the course of this study. Additionally, it will present a set of recommendations based on the study’s outcomes, suggesting ways in which the learnings from Garowe can be applied to foster small-scale entrepreneurship and spur economic growth in other similar regions and contexts.
The conclusion
This thesis has examined the critical role that small-scale entrepreneurship plays in the economic development of Garowe, Somalia. The findings of this study highlight the multifaceted contributions of small businesses to job creation, local economic growth, income generation, and poverty alleviation within the Garowe community.
Small-scale entrepreneurs in Garowe have demonstrated remarkable resilience and innovation in the face of limited resources and infrastructure. Through the establishment and growth of small enterprises across diverse industries, these entrepreneurs have been able to stimulate economic activity, create employment opportunities, and foster a vibrant local market. The dynamism of the small business sector has been a driving force behind Garowe’s overall economic development.
However, the study has also identified several challenges and barriers that continue to hinder the full potential of small-scale entrepreneurship in the region. These include limited access to financing, lack of entrepreneurship
training and business development support, and the need for more robust policy frameworks to nurture the entrepreneurial ecosystem.
To fully harness the power of small-scale entrepreneurship, it is crucial for policymakers, community leaders, and development partners to implement strategic interventions that address these challenges. Potential strategies may include the establishment of dedicated small business incubators, the provision of tailored financial products and services, the implementation of targeted tax incentives, and the promotion of collaborative networks among small enterprises.
By effectively supporting and empowering small-scale entrepreneurs, Garowe can unlock new avenues for economic diversification, job creation, and inclusive growth. Investing in the success of small businesses can serve as a catalyst for Garowe’s continued economic progress, ultimately improving the livelihoods and well-being of its citizens.
The Recommendations
The research outlines a comprehensive set of recommendations to support and strengthen small-scale entrepreneurship in the city of Garowe. The recommendations cover various aspects, including improving access to financing, enhancing entrepreneurship education and training, strengthening the entrepreneurial ecosystem, improving infrastructure and public services, fostering innovation and technology adoption, strengthening the policy and regulatory framework, and enhancing data collection and research. These recommendations aim to create a more conducive environment for small-scale entrepreneurs, unlock their potential, and leverage small-scale entrepreneurship as a key driver of economic development, job creation, and community empowerment in Garowe.
These are the most significant recommendations to cover
Improve Access to Financing for Small-Scale Entrepreneurs:
Establish effective microfinance institutions and expand access to commercial banking services in Garowe.
Provide financial literacy training to help small-scale entrepreneurs better manage their finances and access credit.
Explore government-backed loan guarantee schemes or subsidies to support small business financing.
Enhance Entrepreneurship Education and Training:
Develop and expand entrepreneurship education programs at local schools and universities.
Offer training workshops and seminars on topics such as business planning, marketing, financial management, and digital skills.
Collaborate with industry associations to provide mentorship and coaching programs for small-scale entrepreneurs.
Strengthen the Entrepreneurial Ecosystem:
Facilitate the creation of business incubators, accelerators, and co- working spaces to support the growth of small enterprises.
Encourage the development of supplier linkages and value chain integration to help small businesses connect with larger companies.
Promote networking and collaboration among small-scale entrepreneurs to foster the exchange of knowledge and best practices.
Improve Infrastructure and Public Services:
Invest in the development of reliable electricity, water, and transport infrastructure to support the operations of small businesses.
Streamline administrative and regulatory processes to reduce the burden on small-scale entrepreneurs starting and growing their businesses.
Enhance the provision of business development services, such as business registration, licensing, and advisory support.
Foster Innovation and Technology Adoption:
Provide incentives and support programs to encourage small-scale entrepreneurs to adopt new technologies and innovative practices.
Facilitate access to digital tools, platforms, and e-commerce solutions to help small businesses reach wider markets.
Promote the development of industry-specific innovations and technological advancements tailored to the needs of small-scale entrepreneurs.
Strengthen Policy and Regulatory Framework:
Review and update policies and regulations to create a more conducive environment for small-scale entrepreneurship.
Ensure that government procurement and contracting processes are inclusive of small businesses.
Implement tax incentives, subsidies, or other financial mechanisms to support the growth and sustainability of small enterprises.
Enhance Data Collection and Research:
Establish a comprehensive database to track the performance and impact of small-scale entrepreneurship in Garowe.
Conduct regular market assessments and feasibility studies to identify emerging business opportunities and challenges.
Encourage collaboration between policymakers, researchers, and small- scale entrepreneurs to inform evidence-based decision-making.
By implementing these recommendations, the city of Garowe can further unlock the potential of small-scale entrepreneurship and leverage it as a key driver of economic development, job creation, and community empowerment
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APPENDIX 1
Questionnaire
Dear Sir / Madam,
I am Abdirazak Mohamed Abshir. I am currently carrying out a study for the purpose of writing a dissertation as a requirement for the award of Bachelor of Economics of East Africa University. The topic of the study is “The role of small-scale entrepreneurship in economic development in Garowe”. You have been selected to participate in this study due to the importance of your information in the study. The information you provide will only be used for the purpose of this study and will be treated with utmost confidentiality. I kindly request you to answer the questions fully and honestly.
SECTION A
(Demographic characteristics)
For the questions in this section, please answer by ticking the box representing the most appropriate response for you.
Gender (Please Tick):
SECTION B
Please indicate the extent of your agreement or disagreement with the following statements by ticking one of the boxes from (1) to (5). Where (5) = strongly agree (4) = Agree (3) = neither agree nor disagree (2) = Disagree (1) = strongly disagree.
Statement 1 2 3 4 5
Objective One Impact of Small-Scale Entrepreneurship on Economic Development in
Garowe
- Small-scale entrepreneurship plays a significant role in the
economic development of Garowe. - Small-scale entrepreneurial activities in Garowe generate
employment opportunities for the local population. - Small-scale entrepreneurs in Garowe contribute to the
diversification of the local economy. - Small-scale entrepreneurs in Garowe are able to identify and
capitalize on new market opportunities. - Small-scale entrepreneurship in Garowe contributes to the overall
social and economic inclusion of the local population.
Objective Two the Challenges and Barriers Faced by Small-Scale Entrepreneurs - Small-scale entrepreneurs in Garowe face significant challenges
in accessing financing and capital. - The lack of infrastructure and supporting services is a major
barrier for small-scale entrepreneurs in Garowe. - Small-scale entrepreneurs in Garowe struggle with a lack of
business management skills and training. - Regulatory and administrative barriers hinder the growth and
development of small-scale entrepreneurship in Garowe. - Access to affordable business premises and workspace is a
significant challenge for small-scale entrepreneurs in Garowe.
Objective Three Strategies and Policies that Support Small-Scale Entrepreneurship
- The government of Garowe has implemented effective policies
and strategies to support small-scale entrepreneurship. - The government of Garowe provides sufficient incentives and
support mechanisms for small-scale entrepreneurship. - Access to affordable and reliable business development services
is essential for the success of small-scale entrepreneurs in Garowe. - Networking and collaboration among small-scale entrepreneurs
in Garowe contribute to their overall success. - Small-scale entrepreneurs in Garowe are able to effectively
leverage technology to enhance their business operations. - The local community in Garowe is supportive of small-scale
entrepreneurial initiatives. - Small-scale entrepreneurs in Garowe are able to effectively
adapt to changing market conditions and customer preferences. - Small-scale entrepreneurs in Garowe face difficulties in
accessing relevant market information and intelligence. - Small-scale entrepreneurs in Garowe are able to effectively
develop and market their products and services. - Small-scale entrepreneurs in Garowe face significant
competition from larger, established businesses.
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