Despite the pandemic and the resultant threat of a recession, the U.S. Census Bureau has found that the United States is in the midst of the biggest entrepreneurship boom in half a century. Unsurprisingly, the most significant catalyst for this uptick has been the pandemic itself. It has encouraged workers in less-than-desirable situations to branch out, and it has inspired others to create better solutions for common problems.
The same Census Bureau study showed that more than 5.4 million applications for new businesses were filed in 2021, an increase of 23% over the year prior. Whether people became entrepreneurs out of necessity, the desire to change their world, or some other reason entirely, lockdowns prompted many to steer their careers toward higher risk and potentially higher reward.
Accelerator programs have also reported booms in interest, with Silicon Valley’s Y Combinator recording 7,000 applications for each of its bi-annual intakes. Business schools have seen a similar increase in applications. Lori Rosenkopf, the Vice Dean of Entrepreneurship at Wharton School of Business, shared that their MBA students are now shifting to entrepreneurship rather than the traditional route of finding high-paying jobs at big companies.
This increased rate of entrepreneurship improves the odds that a major company will be built that could help uplift the economy through the creation of jobs and income for many. However, entrepreneurship does come with big risks, with half of new businesses reportedly failing in their first five years. Overall, however, increased entrepreneurship signals optimism for the economy and, in a pandemic, that is an ideal mindset to have.