If you're a TikTok addict like myself (unfortunately), you're well up to speed on all this talk about "quiet quitting."
But while the boomers use this trend to feed the fire of their "every young person is lazy" narrative (like every older generation throughout history says), nobody is talking about the exact opposite phenomena occurring right now as well.
Skip down to Data Peel real quick.
You back? Perfect. That Data Peel chart shows a massive uptick in new business formation brought on since the pandemic. I don't know about you, but I'd say starting a business is the exact opposite of "quiet quitting."
That's not to imply that all the job leavers out there are the next Steve Jobs or Sam Bankman-Fried (lol), but during times of economic hardship, we often see the formation of new businesses pump through the roof.
Anecdotally, Airbnb, Uber, Stripe, Slack, Square (aka Block), Instagram, WhatsApp, and even BTC itself were all founded in the throes of the GFC. Hard times make strong companies, or however the expression goes.
You get the point now (I hope). Since mid-2020 and continuing up until now, the New Business Formation rate has held relatively steady on a higher plateau than pre-pandemic. Maybe it's WFH, maybe it's all the layoffs, or maybe it's just OnlyFans, but something in the air seems to have changed.
In December, New Business Formation rates did tick down slightly from November across almost all US regions. The one where it didn't? The same one that everyone's moving to-the great American South.
While the big upswing in New Business Formation bodes well nationwide, it's particularly beneficial for the region hogging all the entrepreneurs. Cities like Atlanta, Miami, Charlotte, Raleigh, and Nashville have seen both an influx of people and, along with that, an influx of new business.
Historically, those two factors have been leading indicators for a multi-year, secular trend of positive data ranging from employment figures to general well-being among the population.
This is one of those trends that won't move markets on a daily basis but leads to economic growth over the long term-our favorite kind of economic growth.
To speculate wildly for a moment, coming out of the GFC, California and the North East (aka Boston and NYC) hogged all the new businesses. As a result, we got a whole lot of new SaaS, fintech, and biotech firms.
Coming out of the South, especially in regions like the Research Triangle in North Carolina, we could see an outsized amount of new agritech or industrial companies, for example.
There are a lot of possibilities, and it's not like the South is dominating so much that the rest of the country will be left behind. NYC, SF, Boston, and Chicago, to name a few, will likely remain on trend, which is great for them, but it's particularly advantageous for the previously named cities like Miami and Raleigh.
Maybe it's WFH, maybe it's inflation, or maybe it's just OnlyFans, but as entrepreneurship is seen as the key to the American Dream, this is a huge sign that the Roaring '20s 2.0 could be a lock. Place your bets now.
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