Employment Potentials, Innovation, and R & D Expenditure in Nigeria: Evidence from Indigenous Microenterprises

Abstract

This study examined employment potentials of indigenous micro-enterprises in Nigeria as an alternative approach to tackling the menace of unemployment in Nigeria. Nigeria is a country with a relatively young population, with a median age of 18 years, which is lower than the African and global averages of 20 and 31 years respectively. A youthful population suggests a strong labor force; with the labor force population of around 70 million in 2020. Providing enough productive jobs for this young demographic (aged 15-29 years) and rising labor force is a challenge; more than 30 million young Nigerians were reported to be unemployed in 2021. As a result of this rapidly growing labor force, job creation is frequently on the top burners of policymakers and governments' development agendas. The dataset employed in the study is a secondary survey data exclusively from the TETFUND Report (2020). In order to achieve our objectives, we employed ordered logit and ordered probit as well as descriptive statistics. We thus found that improved innovation capabilities of these firms were found to result in increase in their employment potentials. Also, increased investment in R&D leads to rise in employment generating potentials of these entities, and adoption of superior foreign technologies in their operations equally improves the chances of the firm to generate employment. As a result, we recommended that there is need for government to offer technical assistance to these enterprises through trainings and workshops to horn their skillsets and build innovation capabilities that result in improved employment potentials. They need to be motivated to commit a sizeable part of their lean resources into activities such as training and re-training of employees that enhance innovation capabilities and employment potentials of these entities.