The Great Depression was a great time for entrepreneurship. Many successful companies, like General Motors and Procter & Gamble were founded when the economy was at its worst. WhatsApp and Venmo were founded during the Great Recession. One silver lining of a bad recession is that many people, frustrated by a bad job market, use the time to start a new business. And only several months into the Covid-19 recession, there are already signs that the next big company may already be in a nascent stage. The number of business applications has been increasing since the spring.
We did not see a similar sustained increase during the Great Recession, suggesting this time may be an even better time for entrepreneurship. Alternatively, people may be more desperate or starting consulting firms in an effort to sell some part-time work. Or the working-from-home economy may make it easier to start a business.
This recession is also different because most of the new businesses were started in the south and midwest, even though these regions don't have the highest increases in unemployment. In past recessions there was more equal distribution across regions.
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