Americans filed 5.7 million applications last year to start new businesses, according to the Census Bureau<\/a>, the most in the two decades the government has kept track. New business applications through the first half of this year continued to climb.<\/p>\n The strong run of business creation is one of the most surprising and welcome economic developments of the post-pandemic era. New businesses help drive innovation and productivity growth. Although many fail or remain small, some could develop into giants that spur job growth for years to come.<\/p>\n \u201cThe sustained high rate of both main street and growth-oriented entrepreneurship over the past five years is a piece of super good news about the future of the economy,\u201d said Scott Stern, an economist at the Massachusetts Institute of Technology.<\/p>\n Data on the number of business formed each year lags, so it will take time to determine whether the increase in new business applications translates to a rise in real-world businesses and hiring. In 2023, the most recent year for which the data is available, half a million businesses formed, according to the Census Bureau. That was down slightly from the previous year but broadly consistent with an upward trend.<\/p>\n Economists offer a range of factors that could explain the surge in entrepreneurship. First, layoffs during the pandemic left millions of Americans without traditional work and pushed some people to start businesses of their own. Generous government stimulus benefits and low interest rates lessened the financial burden. The pandemic may also have led to a realignment of priorities that made would-be entrepreneurs more willing to pursue long-harbored fantasies.<\/p>\n More recently, there are signals that A.I. is adding fuel.<\/p>\n A recent paper from economists<\/a> at the University of British Columbia and the Stockholm School of Economics found that generative A.I. was \u201cspurring entrepreneurial activity\u201d in the United States, both by giving rise to new ventures built around the technology and by making it cheaper to start enterprises.<\/p>\n \u201cA.I. tools can do very many different things very well,\u201d said Jan Bena, an associate professor at the University of British Columbia and one of the study\u2019s authors. \u201cThat\u2019s the reason why you see so much entry.\u201d<\/p>\n According to a recent report from Gusto<\/a>, a small-business payroll and benefits service, nearly 60 percent of founders on its platform who started businesses last year said they used A.I., and half said the technology made it cheaper and faster.<\/p>\n The technology appears to be greasing the path for entrepreneurs, removing some barriers and allowing them to get their enterprises off the ground more quickly. Chatbots are effectively serving as virtual collaborators that can answer questions, carry out tasks and write code.<\/p>\n Ms. Winkler, the founder of Revel Method Pilates, said she used A.I. to refine her communications with clients, conduct research and develop marketing. She often turns to chatbots for advice when she isn\u2019t feeling confident about a new concept and considers A.I. an indispensable thought partner.<\/p>\n \u201cI don\u2019t know how people did business prior to A.I. some days,\u201d she said.<\/p>\n Census data shows that the rise in business applications has been driven by start-ups that are not likely to hire workers rather than by those that are. That, some economists believe, is more evidence that A.I. is eviscerating obstacles to entrepreneurship.<\/p>\n Ernie Tedeschi, the chief economist at Stripe, a financial tech firm, said the government\u2019s data, as well as an analysis of Stripe users, indicated a jump in solo entrepreneurs<\/a> who might be using A.I. for tasks that once required human employees.<\/p>\n \u201cWe think that A.I. is actually assisting people with starting their own business,\u201d he said.<\/p>\n
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