Entrepreneurs are at the constant mercy of a variety of macroeconomy factors. At the start of the pandemic, lockdowns and stay-at-home orders implemented in countries all over the world drove down profits of existing firms, causing cashflows to turn negative for companies that were unable to reduce operating costs. The pandemic also dampened innovation, with access to capital becoming even more difficult to come by for new business start-ups.

1. H O W D I D T H E C O V I D - 1 9 PA N D E M I C I M PA C T
NEW BUSINESS
FORMATION?

2. HOW DID THE COVID-19
PANDEMIC IMPACT NEW
BUSINESS FORMATION?
M A R K L Y T T L E T O N
2
The pandemic also dampened in-
novation, with access to capital be-
coming even more difficult to come
by for new business start-ups.
Data from the World Bank Entre-
preneurship Database suggests
that most economies saw a re-
duction in new business creation
as a direct impact of COVID-19.
The World Bank Entrepreneurship
Database’s longitudinal study of
entrepreneurial activity revealed
that the number of newly regis-
tered limited liability companies
declined in 58% of economies in
2020 compared with 2019.
Entrepreneurs are at the constant mercy of a variety of macroeconomy factors.
At the start of the pandemic, lockdowns and stay-at-home orders implemented in
countries all over the world drove down profits of existing firms, causing cashflows
to turn negative for companies that were unable to reduce operating costs.

3. Central Asia and
Europe saw the biggest
drop in 2020, with
the number of newly
registered firms falling
in 78% of Central
Asian and European
economies.
3
M A R K L Y T T L E T O N
The World Bank Entrepreneurship Database’s longitudinal
study of entrepreneurial activity revealed that the number of
newly registered limited liability companies declined in 58%
of economies in 2020 compared with 2019.
The COVID-19 pandemic had an
even bigger impact on entrepre-
neurship in developing countries.
Central Asia and Europe saw the
biggest drop in 2020, with the
number of newly registered firms
falling in 78% of Central Asian and
European economies. This was
followed by the Middle East and
North Africa, with 75% of coun-
tries seeing a decrease in busi-
ness entry.

4. M A R K L Y T T L E T O N .
YOU CAN LEARN
M O R E A B O U T W H A T I T T A K E S T O F O U N D A N D G R O W A C O M P A N Y B Y
V I S I T I N G T H E B L O G O F M A R K LY T T L E T O N .