Startups wield significant influence on the global economy, stoking household demand and spurring price competition alongside established firms in competitive markets. Technologically driven payment and delivery options intensify competition, propelled by innovation aimed at enhancing daily essentials needs. The post-pandemic outcome casts a shadow on global economic headway, leading to reduced job opportunities. This chapter emphasizes the urgent need for conceptual, empirical, and policy reform in the context of innovations and startups in the Nigerian context.
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In recent decades, there has been a significant increase in startup activity in advanced economies. These countries have their own unique characteristics that impact their startup ecosystems at different stages of development. It is logical to examine the evolution of organizations through the lens of small enterprises or startups. These organizations have rich histories filled with events and evidence that support their growth and development. However, existing research often neglects to focus on the crucial early stages of businesses, particularly the beginning phase, and fails to give sufficient attention to innovation (Salamzadeh, 2015a).
Startups play a vital role in entrepreneurial ecosystems and are essential for the success of emerging markets (Ferreira & Araújo, 2023a). They are responsible for identifying and capitalizing on unique market opportunities that would otherwise remain unexplored.
Startups that aim to expand often use cutting-edge technologies to provide breakthrough products and services. They adopt a quality-driven approach to meet urgent societal needs while considering their limited human and financial resources. Despite the crucial importance of the early stages of startups, there is a lack of comprehensive research into their success during the initial launch phase. Unfortunately, many businesses fail to overcome significant challenges and do not survive this critical stage (Salamzadeh, 2015b).
Obtaining the necessary support to develop a startup into a sustainable and profitable entity is challenging. In this context, a favorable environment encourages innovation and the generation of knowledge, which also affects the characteristics of knowledge and the overall ecosystem (Audretsch & Braunerhjelm, 2014b).
Nigeria's active population understands the importance of innovation, which is a key driver of the ongoing innovation revolution. The country's youth are increasingly tech-savvy and eager to embrace new ideas and technologies, leading the way in finding creative solutions to local problems and exploring new business opportunities. As affirmed by Nnadi’s (2014a) findings, technology posits a positive impact on startups’ success.
With a population of over 200 million people, vast natural resources, a diverse level of professionalism, and a strategic location, Nigeria has the potential for rapid corporate growth (World Bank, 2023). However, to fully tap into this potential, it is crucial to empower the youth to be innovative in their professional endeavors.
Nigeria's economy has traditionally relied heavily on oil exports as its main source of revenue. Yet, this dependence on oil makes the country vulnerable to global oil price fluctuations, resulting in economic volatility. The current termination of subsidies by Nigeria’s elected president (Bola Ahmed Tinubu aka Jagaban) has resulted in inflation, negatively impacting the average Nigerian (Nairametrics, 2023). Additionally, Nigeria's undiversified economy leaves it vulnerable to external forces, hindering long-term stability and growth (International Monetary Fund 2023).
Despite recent economic progress, Nigeria has the potential to become a significant player in the global economy. To fully realize this potential, policymakers must create an environment that encourages innovation and entrepreneurial development.
According to past findings, the main reason for Nigeria's slow enterprise growth is a lack of corporate innovation (Oke et al., 2009). Its widely believed that innovation not only enhances the quality of products and processes but also has a positive economic impact on small businesses (Tan & Nasurdin, 2011). Innovation plays a crucial role in driving economic development, enabling enterprises to create new products and services, improve operational efficiency, and gain a competitive edge in the global market. In Nigeria, fostering a culture of innovation is essential for accelerating corporate growth and overcoming the challenges faced by a developing country. The Global Competitiveness Index (World Economic Forum, 2015) indicates that a country's global competitiveness is closely linked to its stage of development.
One of the most pressing issues that Nigeria faces is the lack of infrastructure, which is a significant obstacle to progress. Thus, by establishing a strong foundation, the government can create an environment that encourages enterprises to innovate and thrive.