Current in Entrepreneurship Blog

Have you noticed more people talking about starting their own businesses lately? There's a good reason for that. Data shows a record number of people are filing applications to launch businesses, and a surprising factor might be behind this trend.

More Applications, More Businesses

The U.S. Census Bureau recently reported a whopping 5.5 million applications to start businesses in 2023 – that's half a million more than the previous year! Even in the first few months of 2024, the trend continues strong, with over 1.7 million applications already submitted.

Why the Rise in Entrepreneurs?

According to Columbia Business School professor Angela Lee, a key factor could be the recent wave of tech industry layoffs. With many talented people suddenly available, entrepreneurship becomes a more attractive option.

Lee also points out a historical trend: during economic downturns, the appeal of starting a business increases. This is because the "opportunity cost" – what you give up for entrepreneurship – goes down. In other words, if traditional jobs are less secure, taking a chance on your own venture might seem less risky.

Layoffs Hit Tech Giants

The professor's theory is supported by the significant layoffs in tech companies over the past few years. Layoffs.fyi reports that a staggering 263,180 tech employees lost their jobs globally in 2023, with companies like Amazon, Meta, Google, and Microsoft leading the pack.

Interestingly, the U.S. unemployment rate remains low, hovering around 3.7% to 3.9% over the past nine months. This suggests that many laid-off tech workers might be using this time as an opportunity to pursue their entrepreneurial dreams.

So, is this a trend that will continue? Only time will tell, but one thing's for sure: the business world is seeing a surge of new ventures, and it will be interesting to see what innovative ideas emerge from this wave of entrepreneurship.