Microbusinesses flourished during the pandemic. Now we must tap into their full potential.

By Jeremy Hartman and Joseph Parilla
Brookings | Originally published January 4, 2022

A mid the economic tumult of the past two years—with nearly 30% of small businesses closing their doors at the height of the pandemic, workers quitting their jobs at historic rates, and ongoing disruptions to the global supply chain—one positive trend shined through: A record number of Americans started online microbusinesses.

According to Venture Forward, a multiyear research program from GoDaddy to quantify this entrepreneurial activity, Americans created 2.8 million more online microbusinesses in 2020 than in 2019. Online microbusinesses are defined as businesses with a discrete domain name and an active website. About 90% of these online businesses employ fewer than 10 employees, and nearly 17% of the 20 million microbusinesses tracked in the U.S. were started after the onset of the pandemic, per Venture Forward’s latest national survey.

This increase aligns with larger entrepreneurial trends. The number of unincorporated, self-employed Americans reached 9.44 million in October—one of the highest numbers since the 2008 financial crisis, only trailing July and August of this year. This came one month after 3% of the U.S. workforce (4.4 million Americans) quit their jobs—an all-time high.

There are several factors that may explain the online microbusiness boom. Soaring unemployment rates in the early months of the pandemic forced millions to look for new income streams. Pandemic relief checks likely helped some people start new businesses. And compared to previous recessions, potential entrepreneurs now have more widely available broadband, greater digital fluency, and a more mature e-commerce marketplace that simplifies website creation, marketing, and online sales. Today, it’s much easier to translate an artisanal hobby or creative passion project into an online venture than it was in 2008.

Recent research from Venture Forward suggests that these lowered barriers—which make it easier for microbusinesses to generate new jobs and income—help the economy weather economic shocks such as the pandemic. Many recently launched microbusinesses are either too new or too small to show up in traditional economic data such as jobs reports or new business registrations. But a unique dataset of 20 million microbusinesses with domain names registered with GoDaddy has unveiled their economic impact, which was largely invisible to policymakers… (CONTINUED)

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To read the entire article by Jeremy Hartman and Joseph Parilla, visit Brookings:  Microbusinesses flourished during the pandemic. Now we must tap into their full potential