The coronavirus pandemic has had a strong but unpredictable impact on the economy. Nearly two years into the age of COVID-19, we are seeing the effects of supply-chain issues, higher-than-usual inflation and a vastly altered workforce that has created labor shortages in many industries.
So it is interesting that a recent Columbian article details a counterintuitive repercussion of the pandemic: A boom in the issuing of business licenses. Battle Ground, for example, issued 137 new business licenses in 2021.
While economic uncertainty would make it seem like a risky time to launch a business, entrepreneurs are taking the plunge. As the World Economic Forum reported about the U.S. economy: “Applications for new businesses plunged in the early months of the pandemic-induced recession, but rebounded before long. In July 2020, applications surged to historic heights.”
That has continued. The U.S. economy grew by an annualized rate of more than 6 percent during the first half of 2021, before slowing under the weight of the COVID-19 delta variant.
“The strength in economic output was, in part, a result of the enormous legislative response to both the pandemic and to the human hardship it caused,” the Brookings Institute reported in September. “Successive rounds of substantial fiscal support have boosted economic activity since March 2020 and are projected to continue to do so through 2023.”
Globally, the economic future does not appear as bright as in the United States. The Wall Street Journal reported Tuesday: “The World Economic Forum’s annual risk report showed a significant increase in pessimism about global prospects. … Many respondents expected the next three years to be characterized by consistent volatility and surprises. … The pandemic has also eroded social cohesion in many nations, worsened mental health and widened the gap between rich and poor countries.”
The report also says a failure to effectively address climate change remains the biggest economic concern in the medium- to long-range future.
Economic projections are difficult during the best of times. They are more difficult during times of unprecedented upheaval. But the number businesses startups is an encouraging sign that says as much about the American psyche as it does the American economy.
Analyses show that a record number of Americans quit their jobs last year, and for a variety of reasons. Government assistance made it more tenable for many to be unemployed for an extended period. The pandemic reordered personal priorities, leading many to ask whether their job was worth the effort. And many workers decided now was the time to pursue that dream job.
“Part of this ‘Great Resignation’ was Americans deciding that they didn’t want to work for anybody — they wanted to work for themselves,” Kenan Fikri of the Economic Innovation Group told CBS.
That entrepreneurial spirit long has been the backbone of the American economy. It is the foundation of capitalism, and it has built the largest economy in the world.
It also is the backbone of Washington’s economy, despite the presence of major global corporations such as Amazon, Boeing and Microsoft. More than 600,000 small businesses in Washington employ about 1.4 million people — more than half the state’s private-sector workforce.
The strength of those businesses — and their impact — is being seen every day in Clark County.