Around 100,000 businesses shut their doors in 2020. Two-thirds of small business owners say it was their most difficult year in business.
Now that the worst of the COVID pandemic is behind us, organizations like the bipartisan Economic Innovation Group are watching closely for signs of how the recovery will play out. In their recent analysis of U.S. Census Small Business Pulse Survey data, EIG found that more than a third of businesses anticipate slow going. They don’t expect to return to their normal level of operations for at least six months.
The EIG analysis found that larger states like New York, California, and Texas had the most negative impacts during 2020. They are still feeling the most economic distress, while largely rural states in the South, Midwest, and Western interior were spared the worst of the downturn.
A WalletHub analysis of states with the most pandemic-proof small businesses went a step further and looked at some of the underlying factors. States that fared the best offered good access to resources for small businesses. Also, they had a business-friendly environment and workforce support. This was especially true in places like Arkansas, Missouri, and Kansas, where the financial conditions during the pandemic were among the least favorable in the nation.
This strength in small-town America could be good news in the long term.
Looking Back at Past Recoveries
During the 2010-2014 recovery, most growth centered in a mere 20 large, urban counties. It was fueled by computer systems design, programming, software publishing, electronic shopping, and other tech industries
Historically, however, small-town America has driven economic recoveries. For example, during the early 1990s, counties with fewer than 100,000 residents added new businesses to the economy at the highest rates in the country. A full 50% of the growth during that recovery came from 125 less-populated counties spread across the U.S.
One of the most important factors in any recovery is the strength of the underlying entrepreneurial ecosystem. In previous decades, this was an area that small-town America dominated – and thanks to work by state- and county-level organizations, as well as community educational institutions, there are a wealth of initiatives positioning small-town residents to lead the recovery during the “next normal” after COVID.
The Power of an Entrepreneurial Mindset
From southwestern Virginia to Kansas to North Carolina, trainings using our Ice House Entrepreneurial Program have been teaching people to look at entrepreneurship as the self-directed pursuit of opportunities to create value for others.
This does not necessarily mean starting a business; individuals with an entrepreneurial mindset often thrive within an established organization.
Those with an entrepreneurial mindset are constantly looking for ways to increase their knowledge and improve their skills. They see problems as potential opportunities, and, as a result, they become action-oriented, self-directed life-long learners. Over time, they become agile, resilient, and resourceful. They are constantly pushing themselves. They strive to find new ways to increase the value they provide and the number of people they serve.
This is the kind of thinking that helped us early in the pandemic, when creative approaches fueled innovations to coping with the shutdowns. It is even more crucial for a comprehensive recovery that doesn’t leave anyone behind.
Designing, creating, and nurturing an entrepreneurial ecosystem requires leadership from community colleges, local government and business leaders, and everyday citizens. We’re excited to see the tremendous impact these entrepreneurial thinkers will have during the post-COVID recovery.