How COVID Has Improved New Business Start Ups

While Covid was an difficult challenges for the U.S. it also offers a few opportunities to reset the economic system and give access to business opportunities to a wider group of Americans. Some are frustrated by a growing gap between the rich and poor and lack of access to wealth and opportunity. This is even more apparent in minority communities hit hard by the pandemic. This may be an opportunity to rese the economic system to something more sustainable.

One of the ways to equalize income and wealth is a bottom up approach where small businesses and old fashion entrepreneurship work to create opportunities and business ownership across the country. This would have positive implications for the economy, tax revenue, and ensuring people have access to capital that can help to level the growing income equality gap. 

Government should balance the need of small, medium, and large businesses without passing laws that skew legislation and create economic instability. Too many large corporations and we lack innovation 15 years down and often fight the tax implications when companies ditch the people who helped build them and move overseas to shave a few fractions of more wealth. Our economy grows best when there is a fountain of new businesses (some will succeed, some fail, for self sufficiency) that regenerate the system in a wider distributed manner. 

An article entitled "What America's Startup Boom Could Mean For The Economy" provides a solid explanation. You can read about the ideas the researcher John Haltiwanger from the National Bureau of Economic Research in his working paper (meaning its not finished but some information is important to share) on new business applications. 

"Nonstore Retail (alone accounting for 33% of the surge), Personal Services, Professional, Scientific and Technical Services, Administrative and Support Services, Truck Transportation, 23 Fazio et al. (2021) offer some evidence in support of this hypothesis. 21 and Accommodation and Food Services," (Haltiwanger, 2021, pg 20.)

The author talks about 3 Digit industries so you might need a little more info. See 3 Digit Classification. What we see is that business applications are rising and while the paper doesn't necessarily indicate this that there may be a future boom coming as some of these businesses become successful and develop new opportunities (whether hiring employees or simply as cottage businesses).

Our economic system has essentially turned increasingly oriented toward Digital GDP (See Digital GDP and Economic Platforms)  and that will change how wealth is generated and who can generate it. As access to capital changes there may be new opportunities for those who were traditionally locked out to the means of capital through the formation of businesses. All paradigm changes impact wealth distribution making it a great time in history for the U.S. to focus on becoming and economic powerhouse in the new digital world. You can read my rough working paper at Economic Clusters

Haltiwanger, J. (June, 2021). Entrepreneurship during the Covid-19 Evidence from the business formation statistics. National Bureau of Economic Research. (Working Paper). Retrieved nber.org