More people are starting businesses now than ever before, and the reason could also be because the opportunity cost, or what they have to present up in exchange for entrepreneurship, is lower than ever.
Data published by the US Census Bureau earlier this month shows that last yr the total number of applications for starting a business reached a record number of 5.5 million.
This is half a million applications greater than in 2022.
Census Bureau data from the first 4 months of this yr show that the startup boom is also still going strong, with greater than 1.7 million new business applications from January to April.
Why are more and more people applying to start out a new company?
Professor at Columbia Business School Angel Lee he said Entrepreneur that the reason could also be “the unprecedented number of layoffs at large technology companies over the past few years, freeing up a large pool of talent to pursue entrepreneurship.”
Columbia Business School professor Angela Lee (left) and Plum Alley Investments co-founder Andrea Turner Moffitt (right). Photo: Monica Schipper/Getty Images)
Lee, director of the Eugene Lang Center for Entrepreneurship, also noted that “entrepreneurship has always been countercyclical because the opportunity cost of starting a business declined during recessions.”
In recent years, big tech firms have laid off employees in record numbers.
According to the tracker, layoffs in the tech industry affected 263,180 employees worldwide last yr Layoffs.fyi.
Amazon fired the most people (27,410) last yr, but Meta (21,000), Google (12,115) and Microsoft (11,158) also contributed to record numbers.
The U.S. unemployment rate has remained stable at 3.7% to three.9% over the past nine months, based on the latest report from the U.S. Bureau of Labor Statistics.
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