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​Impact of Migration on Microbusiness Growth and Local Economy: 2024 Insights



01/13/2025


​Impact of Migration on Microbusiness Growth and Local Economy: 2024 Insights
GoDaddy's Venture Forward team conducted an internal study to examine whether regions that experienced higher migration during the pandemic also saw greater entrepreneurial activity. The results confirmed this hypothesis! By analyzing 2022 US Census data alongside 2023 Venture Forward microbusiness data, a distinct pattern emerged. Residents who relocated from other counties, states, or countries significantly influenced the density of microbusinesses in their new areas. The farther people moved, the greater the impact on local entrepreneurship.

Research indicates that higher microbusiness density is linked to improved economic outcomes, such as increased household median incomes, lower unemployment, and job creation. Therefore, a rise in microbusinesses fosters stronger economic conditions, and one contributing factor to this is an influx of new residents.

Key findings on new residents and microbusiness growth include:
  • A 0.03% increase in microbusinesses per 100 people for each 1% of the population that moved from a different county in the past year (limited to counties with fewer than 15 microbusinesses per 10 people).
  • A 0.09% increase for each 1% of the population that moved from another state.
  • A 0.42% increase for each 1% of the population that moved from a different country.
The regression model accounted for 23 variables, such as broadband access, race, industry employment, age groups, and education levels, and produced an R-squared value of 0.59.

Migration patterns and their impact on microbusiness density were clear:
  • Counties with significant migration saw a stronger rise in microbusinesses.
  • New residents from different counties, states, or countries all contributed to higher microbusiness density, with international movers having the most significant effect.
In 2022, the impact of adding 1% new residents from different regions on microbusiness density was:
  • 0.24% for those moving from another county within the same state.
  • 0.73% for those coming from another state.
  • 3.39% for those relocating from another country.
In terms of microbusiness density, counties with higher migration also had higher concentrations of microbusinesses. For example:
  • Clark County, NV: 4.4% of residents moved in the past year, with a microbusiness density of 20.7.
  • New York, NY: 3.9% of residents moved in the past year, with a microbusiness density of 34.6.
On the other hand, counties with lower migration rates had relatively lower microbusiness densities, such as Nassau, NY (0.5% migration, 12.6 density) and Sacramento, CA (0.9% migration, 8.3 density).

Additionally, GoDaddy collaborated with UCLA Anderson Forecast to launch the Microbusiness Activity Index (MAI) in 2021, which tracks the dynamics of online microbusinesses. The MAI shows strong correlations with economic indicators like employment and GDP, providing valuable insights into local economic trends. This report is updated annually, with the 2024 edition offering further analysis of microbusiness activity.

Click here to read the report.

Key Insights from This Year's Report by UCLA Economists William Yu and Thomas Ash:
  • The Microbusiness Activity Index (MAI) has risen recently, fueled by greater microbusiness involvement and the adoption of Generative AI tools. These advancements are helping resource-limited entrepreneurs enhance productivity and compete with larger businesses.
  • After adjusting for various factors, the report shows that the MAI, along with its sub-indices—the infrastructure index and participation index—are linked to local job growth. Specifically, a one-point increase in the infrastructure index results in 89 more jobs in a county.
  • On average, the presence of an additional entrepreneur correlates with a gain of 7.4 local jobs. Increased microbusiness participation also positively impacts local labor force engagement.
  • The participation index by state shows a relationship with state GDP growth. The horizontal axis compares changes in the state participation index from March 2023 to March 2024, while the vertical axis tracks real GDP growth from Q1 to Q4 of 2023.