5 Reasons Tech Businesses Love Berlin
Berlin has risen the European tech hub rankings in recent years. The city’s ability to attract entrepreneurs, tech talent and investors might even see the city take London’s top spot in Europe.Insights + resources
In 2018, $23bn was invested in the European tech sector, up from $5bn in 2013. In recent years a number of European cities have become thriving tech hubs, some rivalling Silicon Valley. While London is leading the pack, Berlin has been attracting a growing portion of tech founders, workers and investors. In fact, 54% of founders say they would start their next venture in Berlin. There are a number of reasons why. Here are the top 5.
Lots of tech talent
Not only is the office rent more affordable, but the living costs are also far more forgiving than other leading tech hubs. A month of transport, an apartment and a beer all cost more than 50% less in Berlin than in London; and salaries are only 15% lower. In fact, software engineers in Berlin get paid $58,750, more than in any other European city. It is largely for this reason that Berlin attracted 15.2% of migrating talent in 2018. London is the only European city that attracts more migratory talent with 20.9%.
The laid-back culture
It’s not only the lower living costs making Berlin so popular among tech workers, the city’s culture also plays a strong role in attracting talent. Berlin became home to a great number of immigrants throughout the late 20th century. This diversity contributed to Berlin’s unique culture as it became a hotspot for music, art and food. Today, this is one of the key reasons young entrepreneurs and tech workers are setting up shop in the city.
Berlin is renowned for being ‘cheap but cool’; which is a perfect fit for much of today’s young tech workforce who enjoy the pop-up cafes, street art, quirky outfits and friendly culture of say, Shoreditch, without the £8 drinks and sky-high living costs that they would face in London. It is for these reasons that Berlin ranks 2nd in Europe’s Startup Experience rating.
English speaking city
If you’re an English speaker who can just about order a drink in German, you can easily have a career in Berlin as 80% of Germans speak English. Berlin-based tech teams will likely work and socialise in English. This plays a strong role in attracting a higher portion of international tech talent as they won’t need to speak the local language.
Speaking English doesn’t just help foreign tech talent looking to work in Berlin. English is the international language of business and tech hubs who speak the language fluently will be able to capitalise more effectively on the interconnectedness of Europe’s tech ecosystem. 73% of tech workers in Berlin have exchanged useful ideas and info with counterparts from other hubs.
Growing tech sector
With the combination of affordable rent, lower living costs and unique culture, it’s no wonder Berlin has attracted tech founders and workers from across the globe. From 2015 to 2017 Berlin saw a 9% increase in the number of startups being founded, more than any other European city. The investment was fast to follow; in 2017, Berlin attracted $3.65 billion, $300 million more than London, as it looked to take the top spot as Europe’s leading tech hub.
Even while the German economy seems to be teetering towards recession, the tech sector remains strong with champion startups across multiple sectors, especially FinTech, MedTech and IoT. Berlin has also hosted a number of tech unicorns throughout their growth such as N26, SumUp and Auto1 Group. With the most patent applications of any European country, Germany has proven itself as an innovation hub, with Berlin at its core.
Affordable office space
One of the main reasons for Berlin’s growth not only as a tech hub, but as a hub for scale-ups in general, is the affordability of office space. The average annual cost of office space per square meter in Berlin is €432, compared to €872 in London City, €845 in Paris and €475 in Amsterdam. This is complemented with the rise in flexible office space providers, making office space more attainable to young businesses.
While some European cities have more affordable office space than Berlin, they are typically not as well connected to the rest of Europe, have lesser infrastructure and less developed technology sectors. Berlin is unique in that it is one of Europe’s leading economies without being one of it’s most expensive, as we’ve seen, that applies to more than just the office space.