A new white paper from UNLV’s Center for Business and Economic Research (CBER) shows that Nevada experienced one of the most significant rises in small business creation in the United States during and after the COVID-19 pandemic.

While the state endured some of the nation’s deepest job losses in 2020 due to its tourism-dependent economy, the disruption sparked an entrepreneurship boom that continues to redefine Nevada’s economic landscape. 

The report finds that new business filings increased at a pace not seen since before the Great Recession, and that Nevada outperformed the United States in several key measures of new business activity throughout the post-pandemic recovery period. 

According to the report, Entrepreneurship and the Covid-19 Pandemic, business filings surged in 2020 and by 2021 had reached their highest level since 2006. At the same time, business closures remained relatively flat, signaling a very different recovery pattern than experienced during 2008-2012. 

How Nevadans Met Economic Disruption With Entrepreneurship

“This research helps us better understand how Nevadans responded to the economic disruption caused by the pandemic,” said Andrew Woods, report co-author and director of CBER. “The increase in entrepreneurial activity during this period demonstrates how the state's economy adjusted when traditional employment pathways were interrupted and opened the door for new companies in industries such as healthcare, professional and business services, and real estate.”

Small businesses make up roughly 99% of Nevada firms. Small businesses, defined as businesses with fewer than 500 employees, comprise a similar percentage of business entities nationally and, combined, make up more than 45% of the national workforce. Following the COVID-19 recession, they became the backbone of Nevada's labor market rebound.

• Small employer firms added 54,520 jobs in 2022, a 10.4% increase, outpacing national small-firm employment growth. 
• Nevada’s nonemployer and employer firms each grew at nearly identical rates between 2019 and 2022 (12.9% and 12.8%). 
• Nevada’s ranking in employer firms per 1,000 residents improved from 38th in 2019 to 27th in 2022 - one of the fastest climbs in the nation. 

Updated Analysis Shows Who Helped Drive Nevada’s Small Business Growth

The updated analysis examines business ownership by gender, ethnicity, race, and county. Among the findings: 

• Women-owned small businesses grew faster overall than men-owned small businesses. From 2019 to 2022, women-owned small businesses in Nevada increased by 17.1%, or 20,638 firms, compared with 10.8% growth among men-owned small businesses.
• Hispanic-owned, Black or African American-owned, and Asian-owned small businesses saw some of the fastest growth. Hispanic-owned small businesses increased by 31.1%, compared with 10.5 % growth among non-Hispanic-owned businesses. Black or African American-owned small businesses increased by at least 35.4%, while Asian-owned small businesses grew by 27.2%. These higher growth rates should be read in context because these businesses started from a smaller base.
• Clark County accounted for much of Nevada’s small business growth. This may reflect the deeper and longer-lasting economic impact of the pandemic in Southern Nevada compared with Washoe County. In Clark County, the share of employment among small businesses increased from 41.4% in 2019 to 44.6% in 2022, though the gap between firm growth and employment growth suggests many new businesses were small in scale.

The Data Show a Structural Shift, Not a Temporary Spike

A large share of today’s businesses are post-pandemic creations. According to the report, 40% of businesses currently operating in Nevada were created after the onset of COVID-19. This reflects a strong shift toward entrepreneurship during a period of economic uncertainty. Additionally, small businesses in Nevada increased sharply after the pandemic and stayed above the 2017 to 2020 trend line through 2023. This reflects a strong shift toward entrepreneurship during a period of economic uncertainty.

“Nevada’s surge in a new business creation wasn’t just a short-term response to the pandemic - it may reflect deeper structural changes, driven by increased accessibility of online platforms prior to COVID-19 and accelerated by government support " said Jinju Lee, associate research director at CBER and co-author of the report. “We see growth across nearly every major sector, with especially strong gains in transportation, professional services, and healthcare. The consistency in both nonemployer and employer firm expansion suggests long-lasting changes in how Nevadans pursue economic opportunity." 

Other key findings from the original report:

• Small businesses supported the state’s economic recovery. Small businesses with employees accounted for 45.0 percent of private-sector jobs in 2022. This represents an increase from 42.8 percent in 2019. Firms with 20 to 99 employees contributed the largest share of jobs among small businesses during this period.
• Business closures remained steady. Nevada did not see a meaningful increase in business closures during or immediately after the COVID-19 recession. This stability differs from the large number of closures that occurred during the Great Recession.
• Nevada outpaced the national average in small business growth. Small business growth increased across the United States, but Nevada recorded higher gains when measured per 1,000 residents.
• Nevada ranked 11th in growth of non-employer firms. From 2019 to 2022, Nevada ranked eleventh in growth of non-employer businesses per 1,000 residents. 
• Strong improvement in employer-firm growth. Nevada’s national ranking in small employer firms improved from 38th in 2019 to 27th in 2022 and was the 3rd fastest in growth for employer businesses per 1,000 residents over the same time period. This represents a notable increase in employer-based entrepreneurship.
• Micro-businesses powered the expansion. Much of the expansion in small employer businesses came from firms with one to five employees. These micro-enterprises played a central role in the overall increase.

For 50 years, CBER has been Nevada’s premier applied economic research center for business, government, and the community. CBER is a public resource that seeks to extend the benefits of UNLV’s expertise throughout Nevada and the U.S. 

Publication Details

The white paper, Entrepreneurship and the COVID-19 Pandemic, was released this week by the UNLV Center for Business and Economic Research in the Lee Business School. CBER-based authors include director Andrew Woods; professor and research director Stephen M. Miller; associate research director Jinju Lee; and graduate research assistants Mina Rezaeian Jam and Amanda-Joy Lee.