Does New Business Creation Reduce Unemplyment? Examining the Schumpeter Effect versus the Refugee Effect in Nigeria and Indonesia

Lukman Raimi
Universiti Brunei Darussalam, Brunei Darussalam.

Tulus Tambunan
Center for Industry, SME and Business Competition Study,
Faculty of Economics and Business, Universitas Trisakti,
Jakarta, Indonesia

 

Abstract

This policy paper examines the relationship between new business creation and unemployment in Nigeria and Indonesia, focusing on the Schumpeter effect versus the refugee effect. With a descriptive analysis of secondary data from the World Development Indicators and National Bureau of Statistics, the finding indicates a complex interaction between entrepreneurship (measured by new business creation in Nigeria and newly established micro, small, and medium enterprises in Indonesia) and unemployment dynamics in both countries. While new businesses contribute to economic growth and job creation, the persistence of unemployment suggests there are critical underlying structural issues to be fixed by the policymakers such as insufficient access to capital, skills mismatches, and regulatory constraints.

 

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