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Why Entrepreneurship Is So Popular Now
Businesses are booming.
Five million new businesses got their start nationwide in 2022, more than a 40% jump from the pre-COVID number. You wouldn’t know it from gloomy economic headlines, but the U.S. is experiencing an entrepreneurship boom.
The movement is led by women and Black Americans: Female-founded companies are up about 10%; Black-owned businesses have increased by 30% percent since the start of the pandemic. Census Bureau data suggests we’ll continue seeing historically high business application rates this year.
Why has business creation exploded recently? Experts point toward various factors:
- Shoppers got used to e-commerce: During the pandemic, retail led the business-creation trend, particularly online retail. The high demand for online shopping will likely persist, even now that physical retail is back.
- The Great Resignation effect: Mass layoffs can galvanize business creation. A 2021 study from the Kauffman Foundation found that nearly 30% of new entrepreneurs were unemployed when they started their businesses. People had a lot of time and space during lockdown to reevaluate their lives and, perhaps, map out that business idea they’ve had since graduation.
- Stimulus and benefits: The federal government handed out unprecedented billions in economic assistance. Some aspiring entrepreneurs were finally able to save up enough cash to start their own businesses.
Will these historic rates of business creation persist, especially with the Great Resignation pretty much over? Only time will tell … but for now, ingenuity and ambition are alive and well.
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