The North American Startup Ecosystem In A Post-Pandemic Era

North America’s startup community is in the midst of generational change. Established and emerging ecosystems are adjusting to a new era of entrepreneurship birthed from the side effects of the COVID-19 pandemic. Influencing factors include the decentralization of work, mass job losses, and a surge of diverse founders with distinctive needs and motivations.

The widespread exodus from offices in 2020 normalized a work-from-anywhere culture and allowed millions of North Americans to relocate from metropolitan cities to smaller communities. As more entrepreneurs and their employees shift to remote work, vibrant startup ecosystems are emerging in communities of all sizes. Consider Montreal, which climbed four spots in the GSER ranks. Or Kansas City, which now claims a spot in the GSER’s Top 100 that it did not hold two years ago. At the Global Entrepreneurship Network, we are also seeing new demand to support and connect founders in areas not (yet) represented in the GSER. That includes Hawaii where, in 2021, all five counties will participate in Global Entrepreneurship Week for the first time. 

Equally influential is the diverse cohort of entrepreneurs who have started companies in recent years. After record job losses in 2020, millions of North Americans considered entrepreneurship for the first time. In the United States alone, more than 551,000 startup applications were filed in July 2020, a 96% increase from the same month in 2019. While many of these founders were motivated by innovative ideas, new market opportunities, and newfound time, research from the Kauffman Foundation shows that the “opportunity share” of new entrepreneurs dropped 17% in 2020, suggesting a sharp increase in those starting businesses out of necessity to replace lost income.

Diverse genders, races, education levels, and professional backgrounds are represented in this group of new founders. The rate of new entrepreneurs grew across demographics, with the highest jumps among the Latino, Black, and immigrant communities, as well as among those with less than a high school education, according to Kauffman. These entrepreneurs are bringing unique perspectives and a fundamental mindset shift about what it takes to build the more resilient, inclusive, and sustainable entrepreneurial ecosystems needed for a strong post-pandemic economy.

As a result, we are starting to see market-driven demand for more accessible startup resources, such as investment and other financial support, for founders in communities traditionally underserved by the entrepreneurial support ecosystem. In 2020 and 2021 the Global Entrepreneurship Network partnered with Hello Alice; global investment firm KKR; and Baltimore Gas and Electric (BGE) to provide over $3 million in emergency funds to entrepreneurs. I am proud to report that approximately two-thirds of the recipients of that money are female, and more than half are of diverse ethnicities. That is just one example of greater representation in founder financing. But it is a hopeful one that signals growing inclusion in the broader startup ecosystem.

Entrepreneurs and the skills and ideas they hold are North America’s greatest asset as we strive to build back our economy stronger than before. Highly intelligent, industrious, and innovative founders—whether or not they are new to entrepreneurship—are saying, “Let’s go.” They are eager to put in the work to create jobs, opportunities, and wealth for themselves and others. The startup ecosystems that adapt to their needs and to the needs of the post-pandemic economy will leave a strong legacy in what is sure to be a defining period in world history.