The coronavirus pandemic has triggered a surge in the number of start-ups in several of the world’s largest economies, as entrepreneurs seek to meet the rapidly changing needs of individuals and businesses, and laid-off workers launch. their own businesses.
The US, UK, France, Germany, and Japan have all seen substantial increases in new company listings in recent months, despite the heavy blow Covid-19 has dealt to business global economy.
In the United States, business start-up applications rose 82% in the three months ending September compared to the same quarter a year earlier.
France registered 84,000 new businesses in October, up 20 percent from the same month last year and the highest on record – after already seeing a sharp increase in recent years. In Germany, company registrations have surpassed last year’s levels in recent months, after falling sharply in the early stages of the pandemic.
In Japan, 10,000 new businesses were registered in September, 14% more than in the same month last year.
In the UK, company incorporations rose 30 percent in the four weeks to mid-December compared to the same period last year, and the annual growth rate has been in double digits since June.
Many of these companies seek to meet the changing needs of a socially remote world, such as logistics, home delivery of goods and services, technology, digital wellness, and fitness.
In the United States, official statistics show online retailing is the driving force behind the rise of business applications, but many industries, including information, professional services, and logistics, have contributed to this. trend.
Gregory Daco, chief US economist at Oxford Economics, said the US push included many new businesses started by single people with no dependent workers. This “indicates that people will likely be laid off during the pandemic [and] start their own business, ”indicating that many businesses were created out of necessity, he said.
In the UK, online retail was boosting registrations, according to an analysis of official data for the first 11 months of the year by the University of Kent. Enrollments also increased in food and beverage production and take-out outlets.
Alfred Duncan, professor of economics at the University of Kent, said the numbers reflected “a change in the type of new businesses being started. . . this is probably a consequence of a change in consumption patterns during the pandemic ”.
Emma Jones, founder of Enterprise Nation, a UK company that helps start-ups and small businesses grow, said many people had spotted opportunities created by the Covid-19 restrictions. Now is a good time to start an online business “because [start-up] the costs are low and everyone is suddenly buying online, ”she said.
Paul Donovan, chief economist at UBS Wealth Management, said that new businesses “may be too small to provide the only income stream for their owners – but they can be part of a person’s income portfolio in the business. ‘small group economy’.
However, in the United States, the number of new businesses with planned employees has also increased, increasing by 52 percent over the same period. This is “very encouraging” and reflects the opportunity created by low interest rates and new needs, Daco said.
David Choi, economist at Goldman Sachs, said US data “suggests a much more positive outlook for new business creation than after the last recession.” This is “critical” for employment prospects, as “new and younger firms historically represent the lion’s share of net job growth,” he added.
Dante DeAntonio, economist at Moody’s rating agency, said: “The current low interest rate environment and the prospect of rates remaining low for an extended period is likely contributing to strong corporate formation. [in the US].
“While counterintuitive, some of the biggest and most successful businesses were started during recessions.”