Small-business expansion and innovation in the United States are near all-time highs. And it’s artificial intelligence – despite concerns over AI possibly shrinking the workforce – that appears to be driving this resurgence.
Recent data shows an average of 466,000 new business applications filed in the U.S. each month since the beginning of 2024. In June, that number reached 531,000 – nearly double the prepandemic rate. Payroll platform Gusto reports that 60% of new business owners used AI to help launch their enterprise in 2025 – with 75% of them using it to develop business ideas, and about half applying it to legal and setup tasks.
For Americans who might be short on finance but brimming with business ideas, AI is changing the calculus for the better. “A lot of the big-picture thinking about AI and productivity has focused on how it will change workflows at large companies,” Nasdaq economist and senior director Michael Normyle said in an interview on the stock exchange’s news site in July. The thousands of startups that wouldn’t have existed without AI, he indicated, “are being underappreciated.”
“These companies start out as one-person operations, but there’s no rule saying they stay that way,” Mr. Normyle pointed out. “More businesses mean more potential sources of job creation.”
Such insights and supporting data can help pierce the gloom in some quarters that AI is destined to be an engine of large-scale job losses and devaluation of human skills. Instead, the trend highlights how sometimes-latent creativity and innovation are often reignited by tectonic shifts in technology and know-how.
“A more hopeful possibility,” as The Economist observed, “is that the technology democratises the ability to put ideas into practice and become a successful business owner.” Bank of America statistics, the magazine noted, show that “a rising share of new entrepreneurs are low-income” – a finding on expanded opportunity confirmed by the 2025 Global Entrepreneurship Monitor.
“A broad cross-section of Americans [is] starting businesses, including veterans and active-duty military, immigrants and Americans born abroad, and also demonstrating gender and racial/ethnic diversity,” the GEM report noted. “Collectively, these entrepreneurs contribute to job creation, innovation and global competitiveness for the United States.”
Typically, about 1 in 5 new businesses fail in their first year. But in the U.S., as The New York Times pointed out nearly a decade ago, “the freedom to innovate is inextricably linked to the freedom to fail.” Venture capitalists are often willing to fund an entrepreneur who has persevered and improved an idea or product through trial and error.
“Technology can just as readily create opportunities for high-quality work as it can automate it,” according to Massachusetts Institute of Technology economist David Autor. “Around 60% of all jobs that people do in the US today didn’t exist in 1940,” but were sparked by technological and social innovations, he said in a 2023 talk.
At a time of rapid and uncertain change, humanity’s innate capacities to tap fresh opportunities and to innovate still challenge outgrown ideas of what’s possible for progress and prosperity.