Is Berlin the new technology hub of Europe?

Berlin sets the pace for percentage growth of new start-ups as London experiences a slowdown after Brexit.

100 years ago, Berlin was the Silicon Valley of its time. It was known as Elektropolis because of the profusion of electrical gadgets being invented and developed by Siemens and AEG, which were both rooted in the city. The electric tram and electric lifts were two inventions which originated there.

The damage caused by the Second World War and the consequent break up of Germany saw its technical innovation decline as the city sucked in it’s stomach and pulled its belt tight during economic strife. Many cities are beginning to take on the moniker of ‘Tech Hub of the World’, but you shouldn’t count Berlin out so quickly.

Fast-forward to 2017 and innovation is booming for the German capital. It has the fastest growing start-up eco-system in the world, receiving some of the largest venture capitalist investment in Europe. Since the demolition of the wall in 1989, Berlin has been re-inventing itself to contend with some of the biggest giants of technology innovation, providing great opportunities for entrepreneurs on companies to take advantage of hike in development.

Recent political discourse has given entrepreneurs a reason to pause and decide whether they want to pursue new ventures in business, particularly in the UK. In the six months following the result of the EU referendum, a Creditsafe report discovered that London saw a 13 per cent decline in the number of new start-ups, while other European cities experienced an upsurge in new enterprises.

London is struggling to counter the effects of Brexit and in many ways reflects the uncertainty felt by many German entrepreneurs 70 years ago. It is a huge risk to walk into an unknown market even if you are certain of the political and financial platform you are planning to move into and London, alongside the rest of the UK, is finding it difficult to get a foothold.

This dip in British entrepreneurial spirit provides excellent opportunity for the rest of Europe to carve their own path to success. Indeed, much of what used to be considered as slowly developing, eastern European countries, like Poland for example, are flourishing under a free and open market, quickly pushing the boundaries of business to new heights.

Drastically outstripping any other city in Europe however, is Berlin, boasting a nine per cent increase in active businesses since July 2015. Several things factor into this newfound confidence. For example, the cost of living is an extremely attractive bonus for businesses, with London being 43 per cent more expensive in living costs than the German capital.

Phenomenally, a start-up business is being founded in Berlin on average every 20 minutes. Berlin is the epitome of stereotypical German efficiency, fast tracking start-ups to success with vast investments coming in from around the globe. Investors sent in £1.7 billion to Berlin’s start-ups, significantly outperforming London’s investments of £1.4 billion.

Rachel Mainwaring, operations director at Creditsafe, thinks that Berlin is following through on its threat to tempt start-ups and replace London as the post-Brexit start-up capital.

She says, ‘It was arguably inevitable that in the short term there would be fewer start-ups in London following the result of the EU referendum and ensuing uncertainty, but the capital does appear to be at risk of falling behind the likes of Berlin and Paris. While these cities still have some way to go to surpass London as a start-up hub, these figures suggest they are doing everything they can to create an environment to nurture and encourage start-up enterprises.’

For those that are too daunted by the prices of London and Paris, Berlin’s speed of processes, low living costs and heavy investment could kickstart the transformation of Berlin into the technology hub of Europe.

See also: Berlin is the new start-up capital of Europe, but can you set up there?

Owen Gough

Owen Gough

Owen Gough is a reporter for He has a background in small business marketing strategies and is responsible for writing content on subjects ranging from small business finance to technology...

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