US Sees Surge in Startups, Fueling Self-Employment Growth
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US Sees Surge in Startups, Fueling Self-Employment Growth
- The number of nonemployer businesses in the U.S. grew to 30.4 million in 2023, marking a significant increase from previous years.
- This boom in self-employment, which began during the COVID-19 pandemic, is increasingly being linked to advances in artificial intelligence, as noted in research by Liya Palagashvili of the Mercatus Center.
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The United States is experiencing a notable surge in new business formations, leading to a rise in self-employment across the nation. This trend gained momentum during the COVID-19 pandemic and has continued to accelerate. As of December 2025, approximately 16.63 million Americans were self-employed, representing about 10.3% of the total workforce. This includes both incorporated and unincorporated individuals, such as freelancers and independent contractors.
The increase in self-employment is partly attributed to the growing accessibility and capabilities of artificial intelligence. Research from the Mercatus Center suggests that AI is making it easier for individuals to start businesses by reducing operational costs. Industries with high AI adoption rates, such as professional services, information, education, finance, and insurance, have seen a significant increase in solo self-employment. For instance, the number of independent workers earning over $100,000 annually rose by 19% since 2024, reaching 5.6 million.
This shift aligns with a long-held American ideal of economic independence, a concept historically championed by figures like Thomas Jefferson, who viewed the self-sufficient farmer as the model citizen. While a record 3.23 million business applications were filed in the first half of 2026, concerns exist about the number of these that will become businesses with employees. However, experts note that many new entrepreneurs prefer to remain small, owner-operated companies, and AI tools are enabling founders to build and run businesses with minimal staff. Small businesses utilizing AI are also four times more likely to report increased hiring than cuts, indicating that the technology is fostering growth rather than job displacement.