According to the latest information released by the World Economic Forum, the top five countries with the largest new business formation growth were:
- United Kingdom (101%)
- United States (86%)
- Australia (73%)
- Germany (62%)
- Canada (58%)
Why These Five Countries Are Seeing A Rise in New Business Startups
The global health crisis having disrupted businesses around the world in a variety of ways– particularly small and medium-sized businesses, which constitute more than 90% of the international total. Many businesses were forced to close their doors temporarily and others permanently– while other businesses were on the complete opposite end of the spectrum and saw unprecedented growth.
The innovation that stemmed from the worldwide disruption saw a host of new digitally native businesses being created to meet the globe’s ever-evolving needs. The new market opportunities fortified by a global shift to remote-work environments have enabled the entrepreneurial spirit to thrive.
Entrepreneurial Boom in the United States
The pandemic had dealt a serious blow to the American economy and pushed most businesses out of their comfort zones., Americans filed a record number of applications with the Internal Revenue Service to start 4.4m new businesses– a 24% increase from the previous year.
The boom followed through into 2021. The numbers released by the Census Bureau showed that new business applications rose by 23% in 2021 to a high of 5.4million- the most since the government had started collecting data in 2004. Florida came out on top with the most companies formed in the last year (Q4 2019 to Q3 20)– with nearly half a million new businesses formed (472,332).
Michael Myhre, CEO of the Florida Small Business Development Centers Network, stated that the Sunshine State is home to around 2.5 million small businesses that create almost “three out of every four new jobs, employ over 40 percent of the state’s private-sector workforce, and contribute to nearly 44 percent of the state GDP.”
By the year 2030, Florida is projected to add four million more residents. In order to sustain and economically support this rate of growth, the SBDC calculates that they will need to help their existing businesses as well as add an additional 500,000 net new small businesses to generate the additional 1.2 million net new jobs that are needed.
Why Florida is the Top State for New Business Startups
Florida has proven to be more than just sunny days, pristine beaches adorned with palm trees, and a hub of vibrant cultures. The state is also extremely business-friendly and provides an excellent work-play balance. According to statistics provided by Kauffman Indicators of Entrepreneurship, Florida has a startup early survival rate of nearly 78 percent.
According to the state, entrepreneurship along with the idea of the American dream is robust in Florida. According to the findings of the Business Formation Statistics (BFS) of the U.S. Census Bureau, Florida has long been the leading state in the number of new business applications filed in the United States– since the 3rd quarter of 2014.
“Nonetheless, keeping that dream alive for a small business owner has historically been challenging. Florida ranks in the middle of the pack in terms of five-year startup survival rates. Furthermore, only 80 percent of businesses created in 20 are said to survive the one-year mark.
While only 50 percent of businesses will make it to 2025, only one-third will still exist in 2030. There are a number of reasons why small businesses start then fail. However, the reason the vast majority fail can be attributed to one key reason: a lack of knowledge by the business ownership, key management, or both.”
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Survival expert Bear Grylls is noted for the motto “improvise, adapt, overcome.” And this is exactly what entrepreneurs have done around the world since the globe was forced into a pivotal shift. By finding new and innovative ways to fill gaps in the market, startups have managed to overcome and adapt to the new normal.
In the United States– Florida in particular–businesses have been stepping out of their comfort zones– with the support of the state– and are creating more jobs and improving the current economy in America.