Post-pandemic, the Case for Dynamism is Clear
Resilient societies are made possible through dynamism. At Kaiju, we explore the role of dynamism in fostering economic and social prosperity that is widely accessible. Here, you’ll find informative discussions on efforts to promote robust dynamism that radiates into social and civic resiliency.
After the Great Recession of 2008-2009, we saw a retrenchment of public and private sector systems in the United States. A similar reordering of public-private investment and overall thinking is on deck following the coronavirus pandemic of 2020-21, which stripped billions from the United States GDP, and dramatically widened income and wealth inequality between the owner/investor class and working and middle-class Americans.
Even before the onset of the pandemic in March 2020, some economists were noticing signs of diminishing growth and downstream gains that typically emanate from regional entrepreneurship and other aspects of a healthy, dynamic ecosystem.
As The New York Times’ Eduardo Porter explained in 2018:
The pattern is particularly striking in the United States, where the share of adults with a job remains well below its peak at the end of the 20th century, and productivity growth has trundled along over the last decade at the slowest pace since the end of World War II.
But signs of lethargy are showing up elsewhere in the industrialized world. Productivity is at a crawl in most rich economies…
Most notably, the economy’s ability to generate and support new businesses — agents of creative destruction that bring new products and methods into the marketplace — appears to be faltering across the world. In the United States, the rate of company formation is half what it was four decades ago. And it is slowing in many industrialized countries.
After the pandemic-induced economic losses, the early 2021 passage of the $1.9 trillion American Rescue Plan Act brought the case for boosting dynamism in local and regional ecosystems into stark relief.
The economic crisis spurred by the pandemic created an opening to inject the nation’s ecosystem with a range of mechanisms to increase dynamism, primarily in the business environment, which in turn serves to radiate to civic dynamism.
Data Informs Solutions: Crisis Spurs Opportunity to Boost Dynamism
Pre-pandemic, the nonpartisan Economic Innovation Group had been tracking the erosion of U.S. dynamism.
To add context to the importance of dynamism, in March 2020 EIG released an analysis of fresh data from the U.S. Small Business Administration indicating the urgency of renewing public-private investment in local and regional entrepreneurs.
Here are the top five takeaways based on review of the SBA data:
- The share of firms increasing revenues is scaling up, especially in the accommodation and food services and retail trade sectors.
- The gap has closed between the shares of firms cutting headcount and hours and those adding them.
- Just over 30 percent of small businesses expect they’ll need to hire new employees in the next six months.
- New Orleans, New York, San Francisco, and Los Angeles are the metros where the highest share of businesses report a large negative pandemic effect.
- Since the end of December, 35.4 percent of surveyed businesses have applied for PPP funds for the second time.
In light of these preliminary post-pandemic findings on regional dynamism — which points toward national dynamism in coming years — we encourage creative thinking about how, and where, to support smart growth in coming months.
As America climbs back from a massive public health emergency that blew a hole in overall GDP — while also creating openings for renewed dynamism — we see growing opportunities in local economies, including green energy, micro-lending enterprises, and healthcare cooperatives that leverage trust-based technologies and sustainable alternative housing.
Amy Alexander's reporting and commentary on demographics, cultural politics, and the innovation economy has been published in The Atlantic, The New York Times, NPR, and other outlets. She lives in Montgomery County, Maryland.