Washington, D.C. — One of the most overlooked signs of the strong economic recovery following the COVID-19 pandemic recession has been the boom in business creation. A new column from the Center for American Progress expands on existing research for the surge of entrepreneurship across the nation and reveals new analysis on the boom of new business and startups on a state and county level, partly in thanks to the Biden administration’s economic investment laws. The new analysis finds:
- Entrepreneurs filed 5.2 million “likely employer” business applications from 2021–2023, with growth in every state. This is a 34 percent increase compared with 2017–2019. Likely employer business applications have also grown in all 50 states and Washington, D.C.
- Entrepreneurs filed 450,000 likely employer applications in the fourth quarter of 2023, a 37 percent increase over the fourth quarter of 2019. The business application boom has shown no signs of slowing down, with likely employer applications remaining higher than in 2019 in all but one state.
- Startup businesses surpass their pre-Great Recession level for the first time, growing in 47 states. This is compared with only 34 states seeing increases between 2015 and 2019. The data also suggest that the burst of business applications is leading to actual business formation. The number of business startups—firms under one year old—grew 16 percent from 2019 to 2023—more than 2.5 times the 2015–2019 growth rate of 6 percent. The number did not fall noticeably in 2020 and 2021, so this surge is not making up for pandemic-era losses.
- More than 8 in 10 counties nationwide saw growth in the number of business establishments since 2019. Eighty-five percent of counties showed positive net business establishment growth, demonstrating that the explosion of business establishments was a national trend between 2019 and 2023.
“The strong economic recovery since 2021—in part a result of the American Rescue Plan—has helped deliver a surge of business application, startup, and business establishment growth across the country,” said Brendan Duke, senior director for economic policy at CAP. “This boom, which has the potential to reverse decades of stagnant business formation, could generate even more job creation, productivity growth, and wage growth for years to come.”
Read the column: “Entrepreneurship, Startups, and Business Formation Are Booming Across the Country” by Brendan Duke
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