Business & Technology

3 U.S. states poised for business breakouts after COVID-19

Statue of Liberty, New York, United States (©Andrew Hubbert)

Statue of Liberty, New York, United States (©Andrew Hubbert)


The recent news that the new coronavirus (COVID-19) vaccines are both effective and rapidly approaching a distribution phase has changed the outlook for society’s return to something ordinary. Pfizer’s announcement of an impending vaccine back in September 2020 was the first sign of real optimism on this front and we have since seen multiple highly effective vaccines complete their trial phases and begin to seek Food and Drug Administration approval.

It is important that we all keep in mind that this news does not represent a silver bullet against the pandemic. Distribution will take many months, and precautions will still be necessary for at least that long. That said, the news that vaccinations will soon begin does mean that normalcy is on the horizon and while this is a huge deal for all of us, it may be particularly interesting for the small business community.

Small businesses have been hit extremely hard by the pandemic with many having to stop operating altogether but we have seen in the past that there are often upticks in startup creation and small business activity at the tail end of crises. As problems fade and economies recover, businesses seem to emerge almost automatically.

Here, we wanted to consider this phenomenon a little bit more closely, and specifically look into some of the United States markets in which this kind of uptick may be most likely. Three states namely North Carolina, Texas and New York all stand out.

 

North Carolina

North Carolina is one of the first states to come to mind for a handful of reasons. The first is that it’s one state where there are multiple hubs of innovation that were thriving before the pandemic as opposed to just one major metro area producing a disproportionate number of startups, as we see in so many states. The city of Charlotte, the Research Triangle area around the capital of Raleigh and the beloved mountain town of Asheville have all seen significant business growth, and should again with finance, tech and healthcare being the main areas of focus.

Another point in North Carolina’s favor is that in recent years, it has consistently ranked high among states attracting new residents and a young workforce. Business Insider’s top 10 states people are moving to as of 2019 had North Carolina at third overall and while it chalked some of the state’s allure up to retirement opportunities, it also noted that by some measures, the state has one of the strongest economies in the nation. That, plus affordable urban living space and a huge number of respectable educational opportunities, has North Carolina popular among younger generations as well.

A final factor with specific regard to the present situation is that North Carolina has also handled COVID-19 relatively well. There have certainly been outbreaks, and the state is far from unscathed. But it has also avoided the very worst situations we’ve seen in some other states, which may make for a speedier recovery come 2021. For this and the other reasons just cited, we see potential for a business breakout in North Carolina after the pandemic.

 

Texas

With or without consideration for COVID-19, Texas has actually become something of staple in conversations about up-and-coming startup environments. This may not have been the case in years past, save for with regard to a few specific industries (most notably energy). But lately, the Lone Star State has gained a great deal of attention for actually drawing entrepreneurs away from traditional West Coast hubs and becoming something of a secondary tech capital to Silicon Valley.

One city in particular has driven this narrative: A write-up on Austin by Bloomberg in 2019 went as far as to call the city a “Mini Silicon Valley.” And though the article noted that there are some problems with this distinction, even the notion of the comparison was significant. Austin has become a big enough tech hub to be mentioned in the same breath as California’s tech Mecca, and that alone is enough to put all of Texas on the map among potential thriving business environments post-COVID.

On top of the tech hub narrative though, it should also be mentioned that Texas has some very welcoming conditions for new entrepreneurs. The actual red tape of starting a new business, in fact, is even somewhat forgiving compared to some other states. ZenBusiness’s piece on starting an LLC in Texas describes just five simple requirements that need to be fulfilled with the state before a brand new business is officially registered. And the process for launching a business with a different structure (like a corporation or sole proprietorship) is just about as simple. Meanwhile, in addition to offering these startup perks, Texas is also famously attractive from a pure financial standpoint: The state charges no income tax, which means entrepreneurs can start businesses there with a little bit more financial freedom.

 

New York

The main reason New York comes to mind as well is that in some ways it has had the most impactful experience with the virus itself. When COVID-19 came to America, New York (and particularly New York City) became the epicenter. Things got extremely dark in the city. But ultimately, this also meant that New York in effect gained the most experience handling an outbreak. Many months later, the state and city alike are looked upon as relative success stories so much so that Healthline wrote that New York had “gotten control” of the virus.

There remain concerns about how the city in particular will cope with COVID-19 during the winter. But the fact remains that the city and state alike are fairly well suited, and thoroughly experienced, to handle any subsequent outbreaks that might occur as we ease into 2021 and wait for widespread vaccine-driven immunity. That, plus the tired but accurate notion that New York has an indomitable tendency to bounce back from tragedy, would seem to bode well for business post-COVID.

Beyond the COVID side of things, we should also note that New York has an underrated startup scene to begin with. It’s taken for granted that the city does a world’s worth of business, and in an odd way this stops people from focusing on fresh innovation there. But the truth is New York is among the leaders in various aspects of tech and startup culture, and will almost certainly continue to be moving forward.

Hopefully, many more states will ultimately stand out for post-COVID small business success but as we look ahead to the business environment we expect to see as the pandemic is wrestled under control, North Carolina, Texas and New York look particularly promising.

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