Business Creation Boosts the Economy
Business creation involves the process of organizing, managing and assuming risk for a new venture. Entrepreneurs infuse wealth into a nation through the production of products or services that create new markets and increase national income, enabling greater government spending on public projects.
A new business can be a one-person operation or a large, complex company. The start-up process may be brief and intense or it might take years of trial and error to develop a successful product or service.
Traditionally, new business formation helps power economic recoveries. However, after a steep drop during the Great Recession, annual startup rates fell again and never recovered to pre-recession levels.
To some observers, this reversal is a blip; to others, it is a sign of the country’s underlying resiliency. Regardless of how it comes about, business creation remains one of the most promising signs of our economy’s strength and stability.
The business creation surge in 2020-21 has been driven by the transportation and warehousing, accommodation and food services and retail trade sectors. These industries have typically produced a substantial share of high-propensity business applications under normal economic conditions.
These industries are also likely to transition into employers in large numbers each year. While Florida is known for a high rate of new business openings, it is important to remember that a higher share of new businesses will not survive. It is equally important to note that a higher share of those businesses that do survive will become employer firms.