I have seen a sea change for new business formation. Since the pandemic, hybrid work has taken off and has created a paradigm shift in how the world functions.
Since 2020, the United States has average around 400,000 monthly new business applications. Pre-pandemic this future was about 300,000… and often in the mid 200,000s.
This 33% lift in monthly new business applications has a lot to do with four underlying trends.
- The shift to digital products and services
- The growth in the creator economy
- The acceptance of remote work
- The growing interest in finding work via marketplaces
For example, the creator economy refers to the increasing trend of individuals creating and monetizing their products or content and doing so through various online platforms and communities.
Last week, we shared data around the amount of time spent within social apps growing 17%. That data point is in large part due to improving content. Creators can be content creators, developers, designers, makers, influencers, and more. They use platforms such as YouTube, TikTok, Instagram, Twitch, and Substack.
Potential Investment Implications
New business formation is often called the “lifeblood” of the economy and is at the core of innovation and drives economic progress. New businesses bring new ideas, products, and services to the market, which can lead to increased competition and ultimately better products for all of us.
Many companies serve the new businesses, new creators, or the well-recognized professionals ready to leap. Companies like Canva allow the designer to flourish. Wix enables a company to get a digital presence. Block provides a point of sale for the new cafe down the street, and Intuits QuickBooks provides businesses visibility into their financials.
The author or his firm have positions in the mentioned companies and underlying securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.