COVID-19 hit the world’s economy from all possible angles. It did so by creating huge unemployment, forcing solid small businesses to close, disrupting the way people work, and threatening the very functionality of our societies.
Think of all the things you used to do before the pandemic and now. Think of the goods and services you spent your income on before the pandemic and now. Finally, think of how much you traveled before and now. That all changed and will likely remain like this for a while.
However, beyond this doom and gloom, a ray of hope comes from an unexpected place. Humankind is fighting back on all fronts – from finding a cure and promoting social distancing to stop the spreading of the disease to adjusting to the new economic reality.
An encouraging sign comes from the private sector. Business creation in the third quarter of the year exceeded all expectations. Not only in the United Kingdom, but also in France and, likely, in other parts of the world.
U.K. New Businesses Number on the Rise
The third quarter of the year brought something interesting – the number of new businesses registered in the United Kingdom exceeded the one in the same period of last year. This is interesting because the dynamism in the industry was declining continuously in the last two decades ending 2019. By dynamism, we talk about the difference between business closures and new openings.
But now, with the coronavirus crisis, the dynamics changed. People start new businesses in sectors not hit by the coronavirus, taking advantage of easy money from the banks and advantageous conditions from the government.
Historic New Businesses Number in France
France just reported a record high of new businesses established in the third quarter of 2020. And this is not only about auto-entrepreneurs or one-man firms.
The sectors’ diversity also is interesting. Transportation and warehouse, trade, real estate are in the lead, while personal services, finance and construction follow closely.
Naturally, this is solid economic news. But one cannot stop wondering what drives the sudden interest in becoming an entrepreneur.
Definitely, monetary and fiscal policies help. If there was a time in recent history where credit was so cheap, it is today, which makes it improbable to find similar credit conditions in the future.
However what if the drive to entrepreneurship comes from a lost job? What if people simply lost their jobs and they must do something to make ends meet?
Regardless of the answers, this is more than welcomed news on the economic battle. It is terrific news!