A record number of people are starting businesses, with the U.S. Census Bureau reporting 5.5 million new business applications in 2023, half a million more than in 2022. The trend continues into 2024, with 1.7 million applications filed from January to April. Professor Angela Lee of Columbia Business School explains this increase by pointing to the historically high number of big tech company layoffs, which have produced a vast pool of talent accessible to pursue entrepreneurship. Historically, entrepreneurship has been counter-cyclical, thriving during economic downturns when the opportunity cost of starting a business is lower.
Tech layoffs have significantly contributed to this entrepreneurial boom. In 2024, 263,180 employees globally were affected by tech layoffs. Amazon led with 27,410 layoffs in 2023, followed by Meta, Google, and Microsoft. Despite these layoffs, the U.S. unemployment rate has remained stable, ranging from 3.7% to 3.9% over the past ten months. This stability, combined with the availability of skilled tech professionals, has created a conducive environment for new business ventures, driving a significant increase in entrepreneurial activities across the country.
