December 4, 2020 - 9:00 pm
The coronavirus pandemic and subsequent lockdowns have had an obvious effect on existing businesses in Nevada and across the country. But economic carnage and destruction also create opportunity — and new government numbers offer reason for optimism that our market economy is well suited to address the challenges of these unprecedented times.
The Census Bureau reports that the number of new business license applications filed in July, August and September was double the quarterly average of the past 10 years. In Nevada, applications were up 83 percent. In the week ending Oct. 24, the Silver State ranked third in the nation for new business formation.
Nor do these figures represent only concepts. The bureau noted that the number of “high propensity applications” — those that have a good chance of eventually becoming operating entities with employees and payrolls — have also significantly increased.
“The pandemic has shifted how Americans work, eat, play and socialize,” writes Eric Boehm of reason.com, “and it has upended consumers’ demand for products. That disruption has created opportunities for new businesses, and entrepreneurial types have responded in droves.”
Wharton Business Daily reported last month that “the startups or new businesses include both high-growth businesses that are funded by venture capitalists, sole proprietorships and mom-and-pop establishments.” Some business experts attribute the development to the fact that high unemployment numbers caused by the virus have created a climate in which more workers are willing to take risks by stepping out on their own. But whatever the reason, the pandemic has led to an unexpected jump in entrepreneurialism.
None of this will mitigate the disruption being felt by millions of business owners whose livelihoods remain at risk thanks to government edicts and a cautious consumer base seeking to minimize risk. But it does highlight the importance of state and local governments nurturing these entrepreneurs and their emerging businesses as a way to promote an economic resurgence when the pandemic recedes. That could take numerous forms, including streamlined permitting processes and even a relaxation of certain licensing requirements.
“There’s been this enormous shock to how we interact with each other, and it’s a positive sign there are lots of entrepreneurs out there trying to respond to that,” John Haltiwanger, an economics professor at the University of Maryland, told Bloomberg News in October. That’s a positive sign that economic dynamism remains a potent force and will help hasten the nation’s recovery from the coronavirus pandemic.