Take My Breath Away: How Berlin Can Become Europe’s Commercial Capital

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With the zeitgeist-defining British vote to leave the European Union via a non-binding referendum creating chronic uncertainty in London since 23rd June 2016, Berlin – which for much of the twentieth century was broadly sliced into two entities, one of which was communist, by a Cold War wall – now has the opportunity to supplant the former Centre of the Known Universe as Europe’s startup capital. And some might say it is already in the process of doing just that: in 2015, Berlin’s technology companies received €2.15bn in VC funding, significantly more than the €1.77bn allocated to their London equivalents.

However, Berlin still lags significantly behind London in plenty of lucrative associated sectors, such as financial technology (‘fintech’); in comparison with its counterparts in the United States, the gap is a chasm. Moreover, plenty of larger companies have a negligible presence in a German capital which is still often referred to as ‘poor but sexy’; for now, London continues to ooze corporate swagger.

So how can Berlin make the leap from tier-two metropolis to business base of choice? After some contemplation, we at Mediolana think we have a five-point plan to rival anything else doing the blogosphere rounds on this topic:

  1. Quality of Life. This should be a leitmotiv when pitching to the London business communities in the context of relocation; in particular, the prospect of a comprehensive, state-owned and above all reliable public transportation system. The concept of not being at the mercy of creaking infrastructure and wasting literally days each year stuck in delays is more than ever a thing of beauty, and can be appreciated by all those trying to get stuff done.
  2. Cost of Living. For at least fifteen years now, London has seemingly specialised in insulting the intelligence of its denizens when it comes gouging them for basic amenities such as shelter and transport – and because of both the eerie degree of apathy and the pronounced lack of social capital within the city, it has easily got away with it. By contrast, Berlin is a city of rent caps (€600/month for a decent 1-bed apartment, not €1,500/month) and affordable mass transit (€81/month for a Travelcard equivalent as opposed to fees north of €200/month for something approaching London-wide), things which any SME within the start-up sector cannot easily ignore.
  3. Cheap Commercial Space. For now, Berlin is still awash with former manufacturing and espionage facilities which are available to hire at prices which are lower than the cost of many London parking slots; the bits of Berlin which were in the German Democratic Republic are especially good value.
  4. Abundant Skilled Labour. While practically nowhere else on Earth can rival London as an education hub, Berlin does boast some marvellous institutes of technical education which can supply startups – not least those on the cusp of information technology and industrial applications – with an excellent talent pool.
  5. A Genuine Cosmopolis. Not long ago, the idea that the capital of dowdy Germany could somehow rival swinging and definitively international London in the tolerance stakes would have seemed faintly ridiculous, but the post-Brexit wave of lunacy has revealed that the capital of the United Kingdom is not necessarily the paradigm of open-mindedness that it needs to be to continue to attract the best talent from around Europe, let alone the rest of the world. Meanwhile, Berlin – while hardly free of discrimination itself – is nevertheless part of a country that, in the twenty-first century at least, is unlikely to embark on a needlessly divisive political trajectory which could have direct consequences for its own immigrant populations in quite the same way as the United Kingdom.

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Filed under Business, Economics, Finance, Political Science

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