It seems everyone wants to be an entrepreneur. There was a 20 percent increase in new business applications last year after applications declined for a decade.
In 2021, more than 5.4 million applications for new businesses were filed, according to the US Census Bureau. That’s up an impressive 23 percent from 2020. It was also about twice as many as 10 years ago, Wired reported.
African-American businesses also increased, although the pandemic disproportionality caused the closure of high numbers of Black-owned businesses. But there has been a recent surge to almost 1.5 million in December, up 38 percent from February 2020, according to Bloomberg.
“People have become disaffected with what they’re doing and might as well do the thing they’ve been wanting to do for a while,” Stewart Thornhill, executive director of the Zell Lurie Institute for Entrepreneurial Studies at the University of Michigan, told Wired. Some people who were furloughed or laid off near the start of the pandemic became entrepreneurs out of necessity. Others took stock of their good-enough jobs and decided they could do something better.
Why did the pandemic spark an interest in entrepreneurism? With many people working remotely, they questioned why work hard for someone else when they could work for themselves.
“Am I just supporting a company that makes widgets, or can I do something that actually has an impact?” Felena Hanson, the founder of San Diego-based business accelerator Hera Hub, told Wired. Hera Hub experienced a 50 percent boost in first-time entrepreneurs in 2021, with many of the new business owners entering the same field they had already worked in.
