When the pandemic began, one of my big fears was that it would lead to long-term economic damage. The financial crisis had already cost Americans more than $10 trillion in foregone income and spending—and I worried that we would experience yet another permanent downshift in the level of living standards relative to where they otherwise would have been. Alongside mass job losses and a wave of business liquidations, I was concerned that we would endure a sustained decline in entrepreneurship that would strangle productivity growth and hold back any post-pandemic recovery.

The good news is that this isn’t what happened, at least in the U.S. In fact, the latest numbers on applications for business tax IDs from the IRS suggest that this is the best time to be an American entrepreneur in many years. But the recent data from Europe tell a different—and less encouraging—story.