Director, Global Employment Policy & Special Initiatives, U.S. Chamber of Commerce
February 14, 2023
American ingenuity and innovation is back in businesses. Entrepreneurship is booming in the United States. According to the World Economic Forum, total U.S. Business applications doubled in 2020 compared to recent years. In 2021 alone, a record breaking 5.4 million new business applications were filed, and nearly as many 5.1 million were filed in 2022.
For each state the interactive map below tracks:
- The increase in new business applications since 2019
- State’s ranking of business applications per capita in each state
- Number of new business applications filed in 2022
- The projected business formations within four quarters
- Percentage of applications projected to become employer businesses
New Business Applications by State
Click on a state for more details.
The Census Bureau’s projected business formations are based on a forward-looking econometric model. This model estimates the likelihood a business application turns into a full-fledged business utilizing data and trends from the preceding four quarters and eight quarters from the month of application. A complete list of the Bureau’s business formation statistics definitions can be viewed here.
The data for states that have significantly higher incorporation rates compared to their population may not accurately reflect projected business formations in those states.
Download the national, state, and county business formation data here.
Where did this spike in new businesses originate? Entrepreneurs solve problems, and when America experienced huge problems in a concentrated time frame during the COVID-19 pandemic, entrepreneurs rose to the occasion. New economic needs and changing consumer preferences created more circumstances for new businesses to start.
Many individuals laid off as a result of pandemic shutdowns turned their ideas and hobbies into a business that could be run from home. The number of non-store retailers skyrocketed as individuals sold goods from home.
Professional and business services was not far behind, as entrepreneurs tapped into the need for personal consulting services. This trend held true in 2022 with the most business applications being filed for enterprises in the retail trade and professional services industries.
America’s unique free enterprise system allows for this kind entrepreneurial growth. And the data clearly shows Americans are hungry to start their own small businesses.
There is a record high number of applications being filed, and the projected number of new business formations that could emerge from those applications is increasing, too. On average, 9.5% of business applications lead to business formations from 2016 to 2019. Between 2020 and 2022, there were 14.9 million business applications filed, so if past formations as a share of applications are comparable today, we’d expect or 1.4 million business, or 9.5% of applications, to result in businesses employing workers.
Congress and the Administration should be doing everything possible to ensure these new businesses grow and succeed.
The U.S. Chamber of Commerce details how elected officials can foster new entrepreneurs’ freedom to exist and thrive in the Small Business Bill of Rights. Government must support policy that supports the creation of new business, not hinder it as new businesses bring more opportunity to our communities. As new businesses grow, they are likely to employ more people in the community and fuel the local economy.
Small Business Resources
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