HUMAN CAPITAL DEVELOPMENT AND SMES SUSTAINABILITY IN THE 21ST CENTURY: AN EMPIRICAL EVIDENCE FROM NORTH CENTRAL NIGERIA

Abstract

Despite their critical role in fueling economic expansion, generating employment, and alleviating poverty across Nigeria, small and medium enterprises (SMEs) face a worryingly high failure rate, particularly within the country's North Central region. This study examined the influence of human capital development on 21st century sustainability of SMEs in North Central Nigeria under the major dimensions of human capital development for training and development of the workforce and skills acquisition. The study employed descriptive cross section survey design, and it was guided by the Resource Based View and Human Capital Theory. A sample of 350 SME managers and proprietors was selected in the Federal Capital Territory (FCT) and North Central states (Benue, Kogi, Kwara, Nasarawa, Niger and Plateau) using the Taro Yamane formula and multi-stage stratified random sampling method. Construct validity was achieved with expert validation, and internal consistency was checked with a Cronbach's alpha < 0.70 for all measures. The quantitative data were analyzed using descriptive statistics and multiple linear regression analysis in SPSS (Version 25). The results of this empirical study indicated that training and development had significant positive effect on SME sustainability (β = .412, t = 6.201, p < .05). Likewise, the skills acquired by employees had a statistically significant positive impact on the sustainability outcomes (β = .328, t = 5.114, p < .05). These two aspects of human capital explained 55.1% of the variance in SME sustainability (R² = .551, F = 71.328, p < .05). From the results, it can be concluded that the strategic workforce enhancement is very important to the business continuity of the region for the long run. Therefore, there is a need to strengthen the cooperation between SME leadership, government and vocational institutions to invest specifically and sustainably in professional mentorship, workforce training and capacity-building activities.