Brookings Podcast on Economic Activity
Is the post-pandemic surge in business dynamism here to stay?
Nov 30, 2023
The podcast explores the surprising surge in new business formations and expansions during the pandemic. It discusses the potential long-term impact on business dynamics, employment growth, and city center activity. The speakers delve into the concept of business dynamism and its slowdown in recent years. They also examine the link between business formation and the job market, emphasizing the positive outcomes and opportunities for individuals. Additionally, the significance of young businesses and startups in the economy is highlighted, emphasizing the need for policies that support their entry and growth.
34:16
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Quick takeaways
- The surge in new business applications and expansions observed during the COVID-19 pandemic has been sustained, indicating a potential long-term shift in business dynamics and a reversal of the decline in business dynamism observed prior to the pandemic.
- The surge in business formation, particularly in innovative and technology-intensive sectors, provides an opportunity for future innovation, productivity growth, and job creation, suggesting the potential contributions of startups to the economy in the long-term.
Deep dives
Surging Business Formation During the Pandemic
During the COVID-19 pandemic, there was a significant increase in new business applications and business expansion. This surge in business formation, contrary to expectations, was sustained and not just temporary. The paper examines the causes behind this jump and explores whether it signifies a long-term shift in business dynamics. It also highlights the decline in business dynamism observed prior to the pandemic and the importance of young firms for employment growth. The findings show that the surge in new business applications has translated into actual new businesses creating jobs, indicating a positive trend in business dynamism.
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