Central Massachusetts certainly hasn’t been immune to these problems, particularly within the life sciences and tech industries. Yet, when looking at the much broader picture for entrepreneurs and new businesses in Worcester County and MetroWest, 2023 will turn out to be a positive year.
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Last year held a lot of doom and gloom for the entrepreneurial ecosystem, particularly in Massachusetts. Silicon Valley Bank, which had significant business in the state, failed. The life sciences industry, once the darling of venture capitalists and economic development officials, is in the midst of a right-sizing, causing some pain. For the first three quarters of 2023, startups in the commonwealth raised $12.6 billion, down 26% from the same time period in 2022, according to the Boston Globe, which cited data from Pitchbook and the National Venture Capital Association.
Central Massachusetts certainly hasn’t been immune to these problems, particularly within the life sciences and tech industries. Yet, when looking at the much broader picture for entrepreneurs and new businesses in Worcester County and MetroWest, 2023 will turn out to be a positive year. Few small business founders will ever sit down with an angel investor or a venture capitalist. Most new business starts don’t come from high-profile industries, with public officials standing up to give long speeches about the jobs they are creating. Instead, these entrepreneurs are largely starting small businesses, choosing to take a risk and hang a shingle by opening cleaning companies, restaurants, construction firms, transportation services, and other non-headling-grabbing sectors.
Small businesses comprise the overwhelming majority of the Central Massachusetts companies, and in 2023, they were started in record numbers.
Coming out of the initial phase of the coronavirus pandemic in 2021, new business starts in Central Massachusetts, the state, and the nation were on a tear. That year Central Massachusetts saw a 15% rise in new incorporations while the state as a whole had a 10% increase, according to a WBJ analysis of Massachusetts Secretary of the Commonwealth corporate filings data. The next year, the state took a step back, with a 3% drop in new businesses in 2022, while Central Massachusetts posted a 1.5% increase for the year.
Now, the data shows for the first 11 months of 2023, Central Massachusetts is on track for 5.6% growth in new business starts for the year, again outpacing the state, which is returning to a growth rate of 2.9% for that same period.
Some of these companies undoubtedly will fail. Others may have been started by professionals who are in-between salaried jobs and looking to generate some revenue, or fulfill a lifelong dream. Others still may never grow beyond being sole proprietorships or having only a handful of employees. Yet, the cumulative effect of all these new business startups is an economy growing larger and more dynamic, led by a small army of entrepreneurs who are making a bet on themselves. The numbers show Central Massachusetts continues to expand its economic players at a more rapid rate than the rest of the state – a positive sign for the region for years to come.
