Entering the Entrepreneur Economy

U.S. new business applications were already on the rise before COVID-19. The upward trend in entrepreneurship has accelerated, with over 5 million start-ups in each of the past two years – a whopping 53% increase over the rising trendline pre-pandemic.

Of course there was a reactionary instinct for many people locked up in their houses during COVID-19 to start something new, and of course there was a similar reaction from the great reductions and layoffs in 2022 that particularly impacted the knowledge workforce. Those two mass impact events brought a new reckoning to worker trust (or mistrust) and to work expectations.

What might be missed in all this reaction is the impact on entrepreneurship brought on by shifting consumer technology and the way knowledge-class workers use it to their personal economic advantage.

We have entered into the Entrepreneur Economy. It will be marked by a proliferation of the self-employed and small business ranks, at the expense of corporate America. It will feel faster, more nimble, more diverse, and more personally rewarding, while also bringing more uncertainty and instability to workers and employers alike.

There will be three main areas that drive this shift, but the shift will impact nearly all industry sectors in expectation, form, function, and final delivery.

  • Rise of Artisan Retailers: The demand for unique, personalized, story-backed products is increasing. Hobbyists, makers, and small-batch producers are finding buyers for their goods thanks to the many accessible tools at their disposal for commercializing their talents. With technology from business management tools to e-Commerce tools to the instant-access social media platforms and digital retail environments, it has never been easier for artisans to sell directly to consumers.
  • Rise of Micro Influencers & Creators: As more time shifts to platforms where the community of individuals are the main contributors, that has opened the door for a mass influx of new-school “celebrities,” or Micro Influencers. They aren’t movie stars or professional athletes, but they do have a voice and a following big enough to care about if you are a business that aligns to their voice and the topics they cover. These Micro Influencers are Creators, building and growing their own personal brands across a bevy of social platforms, creating videos, photos, articles, and events that cater to their fans and please the engagement algorithms of social media. Big companies are attempting to use them, but the nature of their following also lends well to the Artisan Retailers noted above.
  • Rise of Freelancers: Networking technology and new online marketplaces that pare project needs to experienced talent are blossoming at the perfect time to take advantage of the demand for remote work and the erosion of employee/employer trust. The ranks of well-sought-after freelance talent will continue to rise in professional services like consulting, advertising, analytics, data science, programming, engineering, design, photography, and more. Big and small companies will all benefit from this low-cost, high-quality, and flexible access to the talent they need as they face uncertainty ahead around every corner of their business’s future.

Just take a look at the data playing out in the time series view below from the U.S. Census Bureau. In it, you can see the steady rise of professional service startups, continuing to move even-higher than the COVID-19 high point seen in most other sectors for the same new business application chart.

The data shows that we are entering a new and exciting time, shaped by recent events, but also the steady progress of technology and individualism. The Entrepreneur Economy is here in America.