The list of famous companies founded during economic downturns is long and varied. It includes General Motors, at&t, Disney and mtv, all founded during recessions. A 2009 study found that over half of Fortune 500 companies got their start during a downturn or a bear market. A recession, it seems, may not be an entirely bad time to start a company. Indeed, busts (and booms) cast a longer shadow on the business landscape than is commonly realised, because they influence both the rate of business formation and how existing firms are run. Some argue that recessions speed up the process of productive economic chum-what Joseph Schumpeter called "creative destruction". The destruction part is easy to see: downturns kill businesses, leaving boarded-up windows on the high street as their gravestones. But recessions may also spur the creation of new businesses. When people suddenly have less money to spend, clever entrepreneurs may see an opportunity to set up businesses that give them what they want more cheaply or efficiently. Downturns may also swell the ranks of potential firm creators, because many who might otherwise have sought a stable salary will reinvent themselves as entrepreneurs. A recent study by Robert Fairlie of the University of California, Santa Cruz found that the proportion of Americans who start a new business each month is on average about half as high again in metropolitan areas where unemployment is in double digits as in those where it is under 2%.
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