As the Great Resignation was underway, many economists and market analysts wondered where all of those employees would go, especially since many companies initiated hiring freezes or planned mass layoffs. While people left their jobs for various reasons, recent data from the US Census Bureau tells us where many of them went: their own businesses.
In 2022 in the US, over five million new business applications were filed [1]. In 2021, some 5.4 million applications were sent out, while in 2020, 4.3 million new businesses opened their doors. This is a remarkable streak [2], especially considering that the US had been experiencing a 40-year decline in entrepreneurship before 2020.
It’s taken over two years to realize, but the pandemic created enormous economic opportunity even as it crushed others. New business owners used the pandemic lockdowns to educate themselves on running a business, while others realized how vulnerable [3] their jobs were when they worked for someone else. Stimulus payments from the government also provided some of the necessary capital businesses needed to get off the ground.
Plus, looking around their homes, it seems that many entrepreneurs sought to fill the needs in their lives through business: the computer and informational technologies, retail, and personal care services industries saw the greatest percentage of new businesses. How new businesses operate is split almost between in-person, e-commerce, and a mix of the two. No doubt that the time spent indoors and online helped people master the transfer of goods online.
While many of these businesses will fail, the current moment is a rather good time to flex those entrepreneurial muscles. Many big corporations accelerated the move towards automation and offshoring because of the pandemic, which will put many people out of work and leave customers looking for businesses with a unique, personal touch that big businesses can’t necessarily replicate [4].
As we can see, the pandemic’s effects are continuing to manifest in surprising ways. If you have a good business idea, maybe this time is right for you to test it out.