Everyday entrepreneurs and their millions of ventures in the U.S. were resilient in the face of the punishing economic climate of the first two months of COVID-19, according to new data from Venture Forward, GoDaddy‘s multi-year research project that demonstrates and quantifies the impact that ventures have on local communities and the U.S. economy.
The new data reveals that these micro-businesses helped communities withstand the economic impact of shuttered shops and lost jobs during March and April. Also, in communities that have more ventures the data shows that average growth in median income for everyone is higher, unemployment is lower and recovery from prior economic downturn is faster. A venture is defined as a discrete domain name with an active website, representing a business, service, non-profit, cause or idea.
“This new data from the COVID-19 pandemic not only reinforces previous research on the impact of micro-businesses on local economies, but also affirms that ventures play a critical role in buoying communities during difficult times,” says Karen Mossberger, Professor, Arizona State University School of Public Affairs. “Venture Forward provides valuable insights for local policymakers into the importance of nurturing micro-businesses, whether supporting entrepreneurs who use technology to quickly adapt in the new stay-at-home world, or cultivating the success of existing ventures who have remained nimble and resilient in the face of change.”
GoDaddy’s Venture Forward initiative quantifies the impact of everyday entrepreneurs and their ventures on the U.S. economy throughout the nation’s 900+ metro-/micropolitan areas, 3,100+ counties and 30,000+ zip codes.
Venture Forward Updates
- Ventures are associated with helping reduce the unemployment rate. Adding 1 new venture per 100 people is associated with reducing unemployment by .05 percentage points.
- Ventures stay resilient and agile during COVID-19. The new data shows that between February and April, while the number of small businesses closures increased nationally, the number of ventures remained steady and relatively flat.
- Small businesses and ventures together can offset unemployment for low income jobs, despite the fact that small businesses saw greater low-income job loss overall and were hit the hardest during COVID-19 . After controlling for other factors, counties with a higher density of small businesses had the largest job losses in April; however, counties with both lots of small businesses and lots of ventures were hit less hard than those counties with lots of small businesses but fewer ventures.
- Ventures and broadband work together to offset job loss. Counties with high broadband penetration didn’t display meaningfully lower job loss than counties with lower broadband accessibility, but counties with high broadband penetration combined with high venture density did.
- Conclusions from Venture Forward data help civic leaders find ways to focus on ventures. Leaders in Gilbert, Ariz., and Denison, Texas, have both implemented programs focused on helping individuals start and grow micro-businesses as an acknowledgment that ventures have unique needs apart from small and large businesses.
“Amid a global pandemic, everyday entrepreneurs are finding ways to create business opportunities to benefit themselves, their families, and their communities,” said GoDaddy CEO Aman Bhutani. “The impact of these micro-businesses is collectively very large and represents a critical – if often overlooked – contributor to local economies and the national economy.”
The research was conducted in partnership with social scientists at the Univ. of Iowa and Arizona State Univ. as well as economists at UCLA Anderson Forecast Center, and combines information about 20 million US ventures built off GoDaddy web domains – a customer could (and often does) have more than one venture – with data from the Census Bureau, Bureau of Labor Statistics and similar sources. The latest findings are updated with 2020 data and analyzes both the impact of ventures during COVID-19 and the impact the pandemic has had on changes in the number of ventures.
Venture Forward’s mission is to bring into focus the benefits of building a more inclusive economy for communities by providing valuable information on the impact of ventures, which are often too small or too new to show up in traditional methods of capturing economic data.
Methodology
The research team used venture density (the number of ventures per 100 people), and then a subset density of highly active ventures, to model effects on economic outcome measures like regional prosperity scores, change in annual household median income and recovery from the Great Recession at the county, city region, and zip code levels. These predictive, multivariate regression models controlled for many additional variables including broadband subscriptions, educational levels, age cohorts, demographics, population, occupational data, poverty, and other relevant economic indicators.
GoDaddy is empowering everyday entrepreneurs around the world by providing all of the help and tools to succeed online. With 19 million customers worldwide, GoDaddy is the place people come to name their idea, build a professional website, attract customers and manage their work. Our mission is to give our customers the tools, insights and the people to transform their ideas and personal initiative into success.
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