Entrepreneurship, Innovation, and Economic Development in Nigeria: A Macroeconomic Perspective

Abstract

Entrepreneurship, innovation, and economic performance in Nigeria are shaped by a mix of long-standing structural challenges and emerging trends. Understanding both helps explain why growth is uneven and what opportunities exist. It is against this backdrop that this study seeks to investigate the impact of entrepreneurship, innovation, and economic development in Nigeria, using secondary annual time series data from 1990 to 2024 from the Central Bank of Nigeria Statistical Bulletin and data from World Development Indicators (WDI). The dependent variable is the human development index (HDI), while self-employment rate (SEMP), access to credit to the private sector (CPS), technology export or digital economy indicator (TECH), ICT adoption (ICT), government expenditure (GOVEXP), trade openness (TOP), and inflation rate (INFL) were the independent and control variables, respectively. The test mechanism adopted was the unit root test, cointegration test, and autoregressive distributed lag (ARDL) technique. Findings revealed that there is a positive and significant relationship between access to credit to the private sector (CPS), technology export or digital economy indicators (TECH), ICT adoption (ICT), government expenditure (GOVEXP), inflation rate (INFL), and economic development in Nigeria during the period under review. However, a negative shock relationship exists between self-employment rates (SEMP), trade openness (TOP), and economic development in Nigeria. Therefore, for policy, the study recommended that government and stakeholders should focus on policies of transforming low-productivity self-employment into formal, innovative, and high-value entrepreneurship. Trade policy should be complemented with capacity-building, technology adoption, and value-added export promotion to enhance domestic competitiveness. Short-run strategies should focus on credit access, skill development, and market integration, while long-run strategies should strengthen innovation ecosystems, industrial capacity, and global market linkages for sustainable economic development.