Job creation and employment generation are among the core relevance of small
and medium enterprises (SMEs) in any economy. The business environment in
which SMEs operate is of considerable relevance to their capacities to create jobs
and provide employment opportunities. This study employed descriptive
approach to examine job creation and employment capacities of SMEs in
relation to the Lagos State business environment. Analysis was based on ten
elements of the business environment and two indicators of SMEs’ relevance.
The study used a composite of survey and co relational research designs to
gather relevant information from which data for analysis were derived. Through
survey, target population and sample size were determined. The definitional
criteria adopted for the study restricted the population to 456 SMEs. The World
Bank scientific model for sample size determination was used to select 228
SMEs through judgmental and convenience sampling techniques. Appropriate
survey instrument was developed and used to elicit responses respondents. The
instrument was validated through scrutiny and evaluation by experts.
Cronbach’s alpha coefficients were computed to assess reliability of the
instrument. Pre-response scales in the instrument were used to processed
responses into quantitative data used for descriptive analysis. The analysis
revealed male-dominated SMEs sector, sole proprietorship and services
subsector dominant and small-enterprises-dominant sector. The analysis further
revealed that inadequate access to external finance, competitive pressures,
multiples taxes and other fees and corrupt practices were among the militating
factors against the SMEs, while socio-cultural elements availability and costs of
labour services did not constrain the enterprises. The constraints
notwithstanding, the SMEs created jobs and expanded employment in the
State. The study recommended practical policy measures to drive the traditional
measures of providing external finance, tax and other incentives and
infrastructure.