Known for its multicultural communities and thriving art scene, the German capital is positioning itself as one of the best cities for start-ups
More and more millennials are becoming disillusioned with the idea of working a traditional nine-to-fi ve job. The appeal of remaining in a corporate setting until retirement is becoming less appealing to a generation who’ve lived through a global recession and have witnessed the impact of retrenchment on those who worked in a single organisation for decades and suddenly found themselves utterly unprepared for a mercilessly competitive job market.
In order to harness the boom in the start-up culture, cities around the world are moving their focus from being primarily tourist attractions off ering only recreational or cultural attractions to being more entrepreneur-friendly in order to attract new talent.
According to a paper from the Harvard Kennedy School, “places with an abundance of new start-ups also experience faster income and employment growth”.
One city that’s consistently been named as among the most conducive to the proliferation of successful commercial endeavours is Berlin. The German capital – which is responsible for several noteworthy start-ups, including Delivery Hero, SoundCloud, ResearchGate and N26, according to Entrepreneur.com – has caught the attention of young people looking to start their own enterprises.
According to the Berlin Senate Department for Economics, Energy & Public Enterprises, “Berlin is Germany’s start-up capital. In terms of the city’s share
of the national population, more people in Berlin set themselves up in business than in any other federal state.” It estimates that 40 000 start-ups spring up annually around the city, with a digital company being launched every 20 hours.
In order to facilitate an environment conducive to start-up culture, several factors need to work in tandem. These include access to capital, wifi hotspots, the availability of aff ordable offi ce-sharing spaces and governmentfunded initiatives to support small to medium enterprises.
Perhaps one of the biggest hurdles for people wanting to realise their entrepreneurial aspirations is access to capital. Money is vital for funding things such as “business licences, insurance, facilities, equipment, marketing collateral and the hiring of necessary talent”, notes Bizfluent.
In order to facilitate ease of access to funding, the Berlin Senate Department for Economics, Energy & Public Enterprises claims to have spent e2,1 billion (about R34,4 billion) investing in local start-ups.
In 2015, the city founded the Startup Unit in order to “improve the framework and working conditions for young and fast-growing companies”, Part of the unit’s mission is improving the availability of venture capital for start-ups.
“Forty thousand start-ups spring up annually around Berlin, with a digital company being launched every 20 hours.”
The availability of shared offi ce space is another essential for an entrepreneur-friendly environment. Renting a traditional offi ce space can be prohibitively expensive for small companies without spare capital. Moreover, according to a study titled Why Co-workers Like Their Coworking Spaces by DeskMag, people who work in shared offi ce spaces are more motivated, have a better work-life balance and earn more than traditional offi ce workers because they have more fl exibility to work for a range of clients.
Co-working spaces also allow entrepreneurs mobility, as they aren’t tied down to a single place and less stress, since they don’t need to put on an “employee face”. They also provide useful amenities such as desks, conference spaces and Internet connectivity at fl exible rental prices.
Berlin has more than 100 offi ce-sharing spaces, such as Betahaus, Ahoy! Berlin, Fritz46, Mindspace and CluboOffi ce, thanks in part to the number of old industrial buildings in the city which are being remodelled for this purpose. These spaces typically cost €100-600 per month to rent.
For those who can’t aff ord the rates of cosharing spaces, there are websites such as Laptop Friendly, dedicated to fi nding workspaces such as coff ee shops and hotel lobbies which provide free wifi , ample power sockets and comfortable seating. There are scores of such spaces around Berlin, which are rated according to diff erent criteria such as number of people working, group calls, stability of the wifi , amount of natural light and quality of the coff ee and food.
The relatively low cost of living is another big factor that puts Berlin ahead of other cities for people seeking to start a business. Apartment rentals in prime areas cost, on average, onethird of rentals for similar apartments in London, according to a 2018 study by property consultancy Knight Frank.
The Berlin State Department for Economics, Energy & Public Enterprises says it plans to do more to ensure that the city continues building on its reputation as a start-up-friendly hub. “Ten so-called ‘centres of future, local innovation parks for smart industries’ are currently being developed. Creating a network for electric vehicles, launching 5G sites for commercial enterprises and expanding 200Mbit Internet over the entire city are other focal areas to make Berlin a global pacemak er for innovation in the digital age,” it says.