NC saw another record year for business creation in 2022
- “It is important to recognize that some of this growth in business formation is due to necessity entrepreneurship as more workers were displaced during the pandemic,” said Greg Brown, Director Of The Frank Hawkins Kenan Institute Of Private Enterprise.
North Carolina saw another record year of business creation in 2022. According to N.C. Secretary of State Elaine Marshall, 171,400 new businesses were created in the state last year, making it the second-best year on record, just under 2021’s record of 178,300.
2023 is continuing the trend with 15,959 filings, marking a 6% increase from the previous record set in January 2022, a 14% increase from creations in January 2021, and a nearly 80% increase from new creations in January 2020.
“While we saw slight moderation from 2021’s record-setting new business creations in 2022, filings outpaced every other year by a wide margin,” said Marshall. “It’s also great news for North Carolina’s economy that we are ringing in 2023 with record-breaking business creations that show just how enduring our state’s entrepreneurial spirit is.”
New business creations have seen more than 70% growth since 2019.
A study from the University of North Carolina Chapel Hill said much of the new business formation stems from the widespread government-mandated closures during COVID.
“It is important to recognize that some of this growth in business formation is due to necessity entrepreneurship as more workers were displaced during the pandemic,” said Greg Brown, Director of the Frank Hawkins Kenan Institute Of Private Enterprise. “According to the Kauffman Foundation, the rates of necessity entrepreneurship rose sharply in 2020, and rates of opportunity entrepreneurship experienced a 25-year low.”
Surveys taken during 2020 and 2021 amid state government orders that limited small businesses ability to operate at capacity, about 70% of small businesses were concerned about financial hardship due to prolonged pandemic closures, and 58% worried about having no choice but to permanently close.
“New business creation has returned in record rates, partially in response to the forced closures during the COVID pandemic lockdowns,” said Paige Terryberry, senior fiscal policy analyst at the John Locke Foundation. “Even so, this growth is good for the state. With our corporate income tax rate phasing out entirely, North Carolina will only improve on its business-friendly environment.”
Marshall credits a portion of the growth to the online creation “wizard” unveiled by her department in 2020, which has reduced customer errors in online filings.
The press release also touted the department’s Rural RISE NC (Resources for Innovators, Start-Ups, and Entrepreneurs) initiative and how newly created businesses now have a roadmap of the wide range of available free or low-cost professional resources to help them grow.