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Illustration: Aïda Amer/Axios

When the pandemic forced cities to shut down, millions of businesses moved their operations online — a shift that is having lasting impacts on hiring, real estate and the way we buy goods and services.

Why it matters: Small businesses are the engines of the economy. While many did not survive the last 15 months, new businesses have popped up and found ways to find customers in the new, all-online-all-the-time environment.

Data: Axios research; Chart: Axios Visuals

By the numbers: Tech giants say they saw massive growth in online adoption by small businesses during the pandemic.

  • Stripe CEO Patrick Collison tweeted Thursday that "more businesses launched on Stripe since the start of 2020 than did in the rest of Stripe's history before then." For reference, Stripe launched in 2009.
  • Facebook CEO Mark Zuckerberg said in April that the company now has more than 200 million businesses that use its free services — more than double since 2019 — and that more than 1 million businesses have set up shops on its platform.
  • Etsy: The number of active sellers on Etsy soared from 2.7 million in 2019 to 4.4 million in 2020, the company said in May.
  • GoDaddy: The world's largest internet domain registrar, GoDaddy said last year it added 1.4 million net customers — nearly double the amount it added in 2019.
  • Other firms, including Snapchat, say ad revenues have increased dramatically thanks to more small businesses buying self-serve ads.

Be smart: While most people think of the pandemic's digital revolution in terms of e-commerce, the services sector has perhaps experienced the most fundamental changes during COVID.

  • New products and tools from tech platforms have made it much easier for people to obtain services online, like doctor's visits or fitness classes.
  • "We can see in our dataset that services businesses are doing the best right now (digitally) and stores are starting to open," GoDaddy CEO Aman Bhutani told Fox Business last month.

The big picture: The digital small business boom has been a great opportunity for tech giants to prove their value to society while facing record regulatory scrutiny.

  • Google, Facebook and others have spent millions on advertising touting ways they've helped small businesses survive during the pandemic — and helping the overall economy to recover.

Between the lines: The digitization of small businesses wasn't all positive. As companies moved their presence online, many closed up their brick-and-mortar shops, leaving empty storefronts in shopping centers and main streets.

  • The workforce needed for all-digital companies is different than what's needed for an office or in-person retail store.
  • A recent Facebook survey of more than 30,000 small businesses showed that nearly a third of small- and medium-sized businesses have had to lay off workers as a result of COVID-19. Half say they don't plan to rehire employees in the next six months.

The bottom line: "Overall rate of migration to the internet economy is hard to overstate," Collison noted.

Go deeper

White House urges businesses to step up ransomware defenses

President Biden speaking during an event at the White House on June 2. Photo: Alex Wong/Getty Images

The Biden administration is urging businesses to take "immediate steps" to increase their ransomware defenses in the wake of several high-profile cyberattacks, according to a White House memo obtained by Axios.

Why it matters: The U.S. government's former top cybersecurity official Chris Krebs has described ransomware as a "global pandemic" — a crime that is increasingly common, but highly disruptive.

Jun 3, 2021 - Technology

Facebook names longtime exec Marne Levine as chief business officer

Photo: Facebook

Facebook has promoted Marne Levine, its current vice president of global partnerships, business and corporate development, to the newly created role of chief business officer, Axios has learned.

Why it matters: Levine, who has been at Facebook for more than a decade, is a close confidant to Facebook's chief operating officer Sheryl Sandberg. She replaces outgoing chief revenue officer David Fischer, who was in that position for more than 10 years.

Jun 3, 2021 - Axios Twin Cities

Will Gov. Tim Walz let Minnesota's COVID rule-breakers off the hook?

Alibi Drinkery opened in December despite Gov. Tim Walz's orders. Photo: Aaron Lavinsky/Star Tribune via Getty Images

A small handful of Minnesota businesses whose owners flouted Gov. Tim Walz's coronavirus orders are still facing lawsuits from the state, but some lawmakers want their violations dismissed.

Driving the news: Republicans in the Legislature introduced a proposal to give those businesses amnesty. It's part of a larger $52 billion budget negotiation with the governor.

  • State lawmakers, who've been negotiating behind closed doors, are expected to hash out details during a June 14 special session.
  • Walz hasn't ruled out leniency for the business owners, but has said they should face consequences, according to MPR News.