Keywords

Demographic Profile, Belief, Environmental Support, Small Business, Indigenous People

Introduction

The issue of entrepreneurship and small business has emerged as a topic of growing interest because of the vitality of start-up firms in high technology industries, the expansion of venture capital financing and the successes of regional clusters in the economic development of many countries (Jones and Wadhwani, 2006). The “creative destruction” (Schumpter, 1947) in the economy makes the analysis of demographic profile, belief in entrepreneurial characteristics and perceived environmental support to entrepreneurial activities desirable before starting the process of entrepreneurship and small business development. Therefore, the economic realities of many nations with the experience of economic hardship, unemployment and poverty in much recent time has made the role of entrepreneurs and small business owners much more recognized and the need for entrepreneurship and small business development have been very greatly emphasized in all nations, particularly in the developing world (AkporRobaro and Mamuzo, 2012). Entrepreneurship and small business can revitalize rural and economically depressed economies through job and wealth creation for the people because it explains between one-third and one -half of differences in GDP growth between countries (Singh-Knights, 2006). The importance of entrepreneurship and small business is more pronounced in the literatures. For instance, according to the Small Business and Entrepreneurship Council (2005), businesses with fewer than 500 employees accounts for 99.7 percent of all private sector employees, employ half of all private sector employees and pay 45 percent of U.S private payroll and produce more than 50 percent of non-farm private GDP. However, the effort to turn out entrepreneurs and small business in their mass faced a colossal failure because entrepreneurs’ personal and environmental factors and motivation have never been the same for all countries as the contexts play important roles in determining them. Jones and Wadhwani (2006) noticed that, the involvement of the people in business and their ability are the basis for socioeconomic transformation and prosperity of a given country. They further acknowledged that those countries and regions with low level of involvement of its people in business undertakings are most of the time underdeveloped and backward as compared to others with acceptable level of business involvement among its people (Jones and Wadhwani, 2006) In this study, the impact of demographic profile, belief in entrepreneurial characteristics and support of environmental factors to entrepreneurial activities of the indigenous people involvement in small business was described and analyzed. There are many demographic profiles, belief about entrepreneurial characteristics and support of entrepreneurial activities to indigenous people that were described for proper understanding of their effects on business involvement by indigenous people In Ethiopia, small business development is at its early stage. According to EEA (2013), local entrepreneurs and small business owners exist in very limited number in Ethiopia because of previous regime’s anti-private sector policy and long-lasting lack of trust between government and private operators. In Gambella people’s National regional States, there is almost no business culture to initiate and maintain small business among the indigenous people but nations and nationalities from other parts of the country are doing lucrative small businesses that are improving their standard of living. Nevertheless, nowadays, in Ethiopia, the policy environment is very favorable to start new businesses to improve the standard of living but, there is lesser engagement of the indigenous people in Gambella region to initiate and maintain small businesses. Although many studies have been done in the country, the results are area and contexts specific and there are no studies undertaken in this region to look into these issues concerning the impact of personal and environmental factors on involvement in business among indigenous people. The purpose of this study was to describe the personal and environmental factors for understanding of entrepreneurial characteristics for involvement in small business among the indigenous people for socio-economic transformation in Gambella Regional State and determine the level of involvement of indigenous people in small business development. Entrepreneurial characteristics of indigenous people for small business involvement was studied by analyzing the belief and support of business environment to indigenous people for recognizing that these people are at early state of their entrepreneurial development. Hence, entrepreneurial and small business involvement is very low. Despite the fact that these people sometimes initiate small businesses, it is hardly maintained for long time. Therefore, this problem needs to be studied in its context to understand the personal and environmental factors, realities, constraints and opportunities therein. Surprisingly, nations and nationalities from other parts of the country together with other nations and nationalities that were born there are initiating and maintaining their businesses. So in the long-run, they will become richer and richer but these indigenous people will become poorer and poorer. This will lead to serious conflict over the resources so the problem is worth researching in order to provide policy recommendations to motivate the indigenous people to involve in doing businesses for their development. Gambella people’s National Regional State is located in South-Western part of Ethiopia. It is one of the nine Regional states that constitute the Federal Democratic Republic in the country. As it is one of the emerging regions, it is characterized by low level of economic, social and infrastructural development. According to Dewett (2001), the people in underdeveloped regions like Gambella are economically backward, that is, the quality of the people as productive agents is low, the people have struck a balance with nature at an elementary level and they have been relatively unsuccessful in solving the economic problem of man’s conquest of his material environment. Moreover, particular manifestations of this are low labor efficiency, factor immobility, limited specialization in occupations and in trades, lack of entrepreneurship, economic ignorance and a value structure and social structure that minimize the incentives for economic change (Dewett, 2001: ibid). In addition, he pointed out that the entrepreneurial culture of the people is not fully developed to take risks that are needed for modern small business development and thereby take advantages of the favorable business environment in the country and beyond. So these personal and business environmental factors need to be studied in relation to involvement in business in their context in order to understand this scourge. In Gambella Regional State nationalities and nations from other parts of the country are doing businesses to improve their standard of living. Nevertheless, to dismay of many, the indigenous people are standing idle in this regards. The reasons as to why the indigenous people in the region not taking part in business undertakings are unclear. Therefore, the need to undertake such a study arises as the result of the fact that no research of a kind has been done in the region to look into these problems although there are studies that had been done on factors affecting involvement of indigenous people in small business development in the other parts of the country.

This study would help policy-makers to design appropriate strategies that can kick-start entrepreneurial change of indigenous people for small business development in the region and the private sector development to foster economic and social transformation so as to achieve economic growth and development objectives of the Gambella Regional State in particular and Ethiopia at large. The indigenous people in Gambella region are at elementary stage of development; hence are very close to the nature which result in resorting to fishing, hunting, collecting wild fruits and roots and collecting wild honey to smooth out consumption in case there is food shortages during crop failure in some seasons due to erratic rainfall. Nevertheless, relying on nature is not sustainable because of increase in the population and the concomitant exhaustion of natural resources. Therefore, there is a need for change towards initiating and maintaining small businesses for socioeconomic transformation in the Region. Several attempts to engage these indigenous people in small businesses by organizing them into cooperatives have been done but failed because of different reasons like lack of training and know-how in doing businesses; although there are few which are functional with minimum capacity utilization. The proposed work adds to these attempts. It can also make policy-makers to be aware of motivational incentives to these nations and nationalities to involve in small businesses to improve their standard of living in particular and develop the region in general.

Statement of the problem

The general problem of the study was: How do demographic profile, belief on entrepreneurial characteristics and perceived environmental support on entrepreneurial activities affect the involvement in small business among indigenous people in Gambella?

Specifically, the study sought answers to the following questions:

How may the demographic profile of the indigenous people be described in terms of:

  • age;
  • gender;
  • civil status;
  • educational background;
  • religion;
  • family size;
  • ethnicity;
  • type of business;
  • experience in business?

What is the belief of the indigenous people about their entrepreneurial characteristics described in terms of:

  • innovativeness;
  • locus of control;
  • need for achievement;
  • pro-activeness;
  • risk-taking,
  • assertiveness?

How may the perceived environmental support to the entrepreneurial activities be described in terms of

  • politics;
  • economic;
  • technology;
  • socio-cultural;
  • legal?

How many of the indigenous people are involved in the following types of small business:

  • trading;
  • manufacturing;
  • services;
  • construction?

Is there a significant relationship between the indigenous people’s demographic profile and their involvement in small business? Is there significant difference in the involvement of the indigenous people in small business when grouped according to their belief on the entrepreneurial characteristics?

Is there significant difference in the involvement of the indigenous people in small business when grouped according to perceived environmental support on entrepreneurial activities?

Materials and Methods

Research Design

This study analyzed the effects of demographic profile, belief about entrepreneurial characteristics and the perceived environmental support to entrepreneurial activities affecting involvement in small business among indigenous people in Gambella. The effects were measured based on the number of indigenous people involved in small business and its significant difference when grouped according to demographic profile, belief about entrepreneurial characteristics and the perceived environmental support to entrepreneurial activities. Since in this study, cross-sectional data were collected using questionnaires or structured interview with the intention of generalizing from sample to a population, quantitative strategy of inquiry were used. The quantitative strategy of inquiry exhibits objectivity and independence of researcher’s biases and values, maintains positive interpersonal relations with the research subjects and at the same time attempts to be personally detached to secure data through use of objective instruments and involves a sample of people rather than a few individuals to deduce generalization to the entire population (Borg and Gall, 1989).The data that were collected through primary methods which were summarized using descriptive statistics such as tables, frequency distribution, mean and percentage to give a consolidated picture of the data and finally, inferential statistics was used to test the hypotheses of the study.

Locale of the study

The target population of this study was primarily the indigenous nationalities and nations in the state of Gambella People’s National Regional State in the South- Western Ethiopia. For this study, the sample was drawn using two stages of stratified random sampling method. In the first stage seven district towns are selected based on the nations and nationalities zones in Gambella Regional State. In stage two, a total sample size of 250 households were selected from the list of household from respective town administration using ethnic background as a strata. The total sample size of the survey was determined following a standard statistical procedure which include the factors the number of households in the district towns, the level of statistical significance, the variation of population and the level of statistical power. The respondents for this study were selected from the seven accessible district towns in Gambella people’s National Regional State. To this end, 55 respondents were selected from Gambella town which is the largest of the towns as it is the capital of the state. In Gambella town one can find all the indigenous people. Moreover, 30 respondents were from Itang town in which one can find Anywaa, Nuer and Opo ethnic groups and in Nyinyengang and Mattar towns 35 respective indigenous people were selected; these towns contains Nuer ethnic group. In addition, in Abobo and Pinyudo towns one can find only Anywaa ethnic group and 30 respondents were selected from each. Finally, in Metti town, only Majang ethnic group is found and 35 respondents were selected for this study.

Instrumental Analysis

According to Lynch (1996) as reported in Zapata (2012), questionnaires are time-effect means to gather data from a large number of people as they are written interviews used as a data-gathering technique with a naturalistic evaluation design that can be used to be assured of obtaining roughly the same information across the various respondents and therefore, easier to analyze. Moreover, the study involved both primary and secondary data. Primary data were collected using structured questionnaires and interview. Prior to conducting the survey, the secondary data and information were collected from published and unpublished documents such as government reports, books, periodicals, newspaper, journals, articles, thesis and dissertations in order to supplement the primary data. Data collection instruments were developed based on their reliability to answer the general and specific questions of the research in order to arrive at the objectives of the study. The instrument focused on the conceptual framework for the study. Primary data were gathered using structured questionnaires. Moreover, interview was made use of as the participants can provide historical information about the problem and also allows the researcher to control the line of questioning. Interview type of data collection, a pilot testing was conducted before the scheduled interview to test the appropriateness of the questions to increase the reliability and responsiveness and also validation was made by experts in the field. After successful pilot testing, the experts in the field found that it was satisfactory for scientific investigation with minor modifications after which a full blown interview was conducted by using inperson interview using five research assistants who were trained for three days on the data collection procedures and contents of the questionnaires in order to take advantage of time. In the questionnaires, an introduction that discloses the identity of the researcher and the purpose of the research and reassurance of confidentiality and instructions to respondents were given. Reliability analysis was used to measure both consistency and internal stability of data and this instrument has acceptable level of Cronbach’s Alpha Coefficient internal consistency and reliability because Peterson (1994) suggested that the acceptable level of Cronbach’s Alpha coefficient need to be 0.70 and higher to be considered reasonable for scientific purposes. Cronbach’s Alpha for six independent variables and the dependent variable were above .70. Therefore data that were collected for this research were considered to be internally stable and consistent. The result can be found in the appendix. A five-point Likert scale was adopted to measure the responses in this study because it has the advantage of being easy to construct and simple to administer. In this study each item has a scale ranging from 1 to 5, with 1 representing “disagree strongly”, 2 representing “disagree” 3 representing “neutral”, 4 representing “agree” and 5 representing “agree strongly”. The data collection for this study were by means of self-administered questionnaires using experienced five research assistants who were recruited and trained on the contents of the questionnaires and how to ask questions.

Data Analysis

The data that were gathered were cleared, coded, analyzed and interpreted using descriptive and inferential treatments. The demographic profile of the indigenous people and their involvement in small business were analyzed using frequency, percentage, and mean. For the analysis of the indigenous people’s belief about entrepreneurial characteristics, frequency, mean and FivePoint Likert Scale were used presented as follows:

Scale Range Verbal Interpretation
5 4.50-5.00 Strongly Agree/Very Strong
4 3.50-4.49 Agree/Strong
3 2.50-3.49 Neutral/Moderate
2 1.50-2.49 Disagree/Weak
1 1.00-1.49 Strongly Disagree/Very Weak

The perceived environmental support to entrepreneurial activities was analyzed using frequency, mean and Five-Point Likert Scale presented as follows:

Scale Range Verbal Interpretation
5 4.50-5.00 Strongly Agree/Very High
4 3.50-4.49 Agree/High
3 2.50-3.49 Neutral/Moderate
2 1.50-2.49 Disagree/Low
1 1.00-1.49 Strongly Disagree/Very Very Low

The researcher had employed experienced statistician to analyze the data collected using Statistical Package for Social Sciences (SPSS version-17).

Results and Discussion

The highest number of the indigenous people that is 25.6 percent, considered in the study fell in the age range of 26- 30 years, while the lowest number of the respondents, 1.6 percent is in the age range of 51-55 years. Gender. In terms of gender, 35.2 percent were female while 64.8 percent were male. Ethnicity. With regards to ethnicity, the sample of respondents consisted of 36.8 percent Anywaa, 36 percent Nuer, 17.2 percent Majang, 4 percent Komo and 6 percent Opo. Religion. The majority of the indigenous people in terms of religion were protestant (92.8 percent) while orthodox (1.2 percent), Catholic (1.8 percent), Muslim (0.4 percent), traditional (2.4 percent) and other religions consisted of 1.6 percent of the total respondents. Civil Status. Civil status of the respondents consisted of 28.4 percent unmarried, 62 percent married, 4.4 percent divorced and 5.2 percent widowed. Educational background. The educational background of the respondents was that 19.6 percent illiterate, 11.6 percent were from grade 1-8, 28.8 percent were from grade 9-12, 29.2 percent have diploma and 10.8 percent have bachelor degree and above. Types of Business. In terms of types of business involved in, 54.4 percent of the respondents did not have businesses, 24.8 percent were traders, 1.2 percent were manufacturers,19.2 percent were engaged providing services and 0.4 percent were doing some sort of construction works. The fact that there are few indigenous people in construction sector is that it is capital intensive and most indigenous people are in trade and service sectors because these sectors need less capital for start-up. Family Size. It can be gleaned from the table that, most indigenous people have a family size that fell between 1-5 members and least have family size that fell in the range of 16-20 members. This indicates that most of the household do not have large family size and it is normal because most indigenous people do not follow traditional way of life as in the previous period in which households have large size. Experience in Business. As can be seen from the table, most indigenous people considered in this study have experience in business the fell in the range of 0-5; while there were no indigenous people with the experience that fell n the range of 16-20 and 21-25 years. Innovativeness and Involvement in Small business. Innovativeness is one of the key personal factors that was tested using T-test. According to the result, the belief on entrepreneurial characteristics as described in terms of innovativeness significantly affects involvement in a small business among the indigenous people in Gambella because the calculated T has a value of -3.320 with the Pvalue of 0.001 which is less than 0.05 significance level. When people become innovative, it become easily for them to try new things that are helpful to the society at large (Schumpeter, 1934, Darroch, 2006; Kibassa, 2012; Coklar, 1012). Locus of Control and Involvement in Small Business. According to this study, the belief on entrepreneurial characteristics as described in terms of locus of Control significantly affects the involvement in the small business among indigenous people in Gambella because the T value of -2.380 has p-value of 0.018 which is less than 5 percent level of significance. Internal locus of control helps people to perceive that they can control events in their lives like initiating small businesses for socio-economic transformation. This idea is supported by Chell (2008) and Kibassa (2012). Need of Achievement and Involvement in Small Business. It was hypothesized that involvement in small business could be dependent on the need for achievement. As the result turned out, the belief on entrepreneurial characteristics described in terms of the need for achievement significantly affect the involvement in small business among the indigenous people in Gambella because the T value of-5.702 has p-value of 0.000 which is less than 5 percent significance level. This study is supported by Kibassa (2012) who acknowledged that there is a connection between the need for achievement and various aspects of entrepreneurship in both the western and non-western context. Moreover, the disposition ‘need to achieve’ has been hypothesized to be the dominant characteristic of entrepreneurs because high need for achievement make individuals avoid routine, and seek out information to find better ways of doing things; they excel at moderately challenging tasks; they like to take responsibility for their own performance; and they also prefer working in environments where feedback is given (Langan-Fox, 2005). Pro-activeness and Involvement in Small Business. According to the study, pro-activeness on part of the indigenous people, significantly affect the involvement in small business because T value of -2.271 has p-value of 0.024 which is less than 5 percent significance level. Assertiveness and Involvement in Small Business. As the result showed, the belief on entrepreneurial characteristics as described in terms of assertiveness significantly affects involvement in small business among indigenous people in Gambella because it has the T value of-3.901 with the pvalue of 0.000 which is less than 5 percent level of significance. Risk-taking and Involvement in Small Business. According to the result, the belief on entrepreneurial characteristics in terms of risk-taking behaviour of the indigenous people in Gambella, significantly affects involvement in small business because it has the T value of-2.591 with the pvalue of 0.010 which is less than 5 percent level of significance. These imply that indigenous people have to take risks if they want to improve their standard of living through involvement in small businesses in Gambella. Several studies done in different parts of the world confirm this (Keh, et al, 2002; Keh, et at, 2006; Siropolis, 1994). Risk taking may explain why entrepreneurs step forward to undertake the process of entrepreneurial new venture formation while others hang back and instead choose employment with established businesses or other organizations (Douglas, 2009). Therefore, as the result showed, the indigenous people in Gambella should be bold enough to take risks that are needed for modern small business development in order to improve their standard of living.

Conclusions

The study reached at the following conclusions:

  • There is a significant relationship between the demographic profile of the indigenous people in terms of gender, ethnicity, type of business and experience in business and their involvement in small business. However, age, civil status, educational background, religion and family size showed no significant relationship.
  • There is a significant difference in the involvement of the indigenous people in small business when grouped according to their belief about entrepreneurial characteristics in terms of innovativeness, locus of control, need for achievement, pro-activeness, risktaking and assertiveness.
  • There is a significant difference in the involvement of the indigenous people in small business when grouped according to environmental support to the entrepreneurial activities like socio-cultural and technology and not significant in terms of politics, sociocultural and legal.

Recommendations

  • The findings of this study informs strategies aimed at supporting small business development in emerging regions like Gambella in order to take advantages of favorable business environment in the state in particular and the country in general.
  • Indigenous people with different ethnic background should be approached differently in terms of small business development because the socio-cultural conditions are different.
  • Attitudinally tune the indigenous people toward entrepreneurial venture through achievement-motivation training to develop the need to achieve, risk taking, innovativeness, pro-activeness, assertiveness and internal locus of control.
  • Explore ways to foster creativity and innovation friendly businesses environment for the indigenous people by introducing different technologies that support indigenous people with regards to small business undertakings.
  • Government must directly involve and intervene in encouraging the indigenous people to start involving in small businesses in the short-run but in the long-run, the supportive role of the government must be emphasized rather than direct involvement.
  • Demographic, belief about entrepreneurial characteristics and perceived environmental support to entrepreneurial activities affecting involvement in small business among indigenous people in Gambella state with other nations and nationalities as the control group can be one of the research direction in the future.
  • This study can be replicated for different places and/ or population.
  • Generally, factors affecting involvement in small business can be a line of future inquiry.
  • Determinants of small business in Gambella should be studied without discrimination