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It turns out people were starting much more than sourdough during covid — some were actually founding businesses.
New research published in the journal Brookings Papers on Economic Activity suggests that the pandemic fueled a surge in American businesses, ranging from restaurants to tech startups.
While the pandemic changed the way we live and work overnight, it also unearthed opportunities for hungry entrepreneurs:
- Trillions of dollars distributed by the federal government for pandemic assistance gave some folks the much-needed capital to finally start their business and hire employees.
- The work-from-home movement spurred new consumer and business needs.
- The Great Resignation freed workers up to leave large corporations for small new businesses.
All of these socioeconomic changes have created new opportunities for nimble entrepreneurs, who can pivot quicker than larger corporations.
Their scrappiness has seemingly paid off
Monthly applications for new businesses — which, in turn, create new jobs — are over 30% higher than they were in 2019.
As of August, there were 466k+ new US business applications.
And that’s all good news: The paper’s researchers say this could mean “a revival of business dynamism.”
It’s a big deal…
… because prior studies show that startup activity has been declining for decades.
But this new paper suggests that the pandemic might’ve actually broken these trends.
One caveat: It’s likely too early to know for sure whether the entrepreneurial surge will continue.
