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Spotlight: Why Do Tech Companies Love Berlin?

Berlin has risen steadily up the European tech hub rankings in recent years and is a major player on the global scale too, ranking 13th on the list in KPMG’s 2020 Technology Innovation Hubs report.

In fact, when it comes to European hub cities, only London tops Berlin as the most popular destination for technology companies, and close to 3,000 startups now call Berlin home.

While London clearly leads the pack, Berlin is certainly a major pull for tech founders, employees and investors. The city has a booming startup culture and pre-pandemic, a new business was founded every 20 minutes, and it’s easy to see why:

A hub for top tech talent

As the number of tech companies grows rapidly in Berlin, so too does its tech community.

The burgeoning Berlin startup scene has added thousands of jobs to the mix over the past decade and talent with digital skills are in high demand. With new companies being founded at such pace, and older tech companies becoming increasingly established in their markets, the opportunities for tech talent in the city are many.

The affordability of living is a huge draw for talent, making Berlin a genuinely attractive option to live and work. While salaries in London are higher (around 15% on average) the cost of rent, transport and everyday living costs is considerably lower.

Likewise, relatively favourable immigration rules attract foreign workers creating a melting pot of international talent. It’s believed almost 50% of Berlin’s startup talent are from abroad and the city’s openness is important in making Berlin a haven for global tech talent.

Availability of investment  

For startups looking for investment, Berlin is a great place to start with a host of investors ready to back innovation in the city.

Berlin receives the lion’s share of the funding available for German business founders, with 60% of all funding in 2019 (circa €3.7 billion) given to startups founded in the capital.

There are also many initiatives to provide funding and support for tech company founders and entrepreneurs in Berlin, with some offering packages that include living spaces, workspaces, legal advice and financial support.

Diverse ecosystem ideal for tech startups

Berlin has been open to innovative tech companies shaking up traditions and taking their industries by storm. This acceptance of change is the reason why Berlin-founded startups like Delivery Hero, Hello Fresh, Zalando and N26 have been so successful.

Acceptance to change, and the diverse and progressive attitude of its residents is also the reason why Berlin hosts the highest number of female founders (16.2%) compared to other start-up hubs, and Berlin has 50% more female founders than in other German cities.

With its unique combination of affordability, attractiveness to investors and openness to innovation, it’s no wonder tech companies love Berlin.

Berlin’s tech sector has remained strong despite the challenges faced in recent times, with champion startups emerging across the likes of the FinTech, MedTech and IoT sectors.

The good news is, there doesn’t seem to be any signs of this quest for greater innovation slowing down. In 2020, German businesses filed the most applications of any European city, and the 5th most globally.

However, with this booming tech startup economy, comes a potential strain on the talent pools and it’s thought that by 2023, around 700,000 additional tech specialists will be needed in Germany.

The solution is for investment into innovative tech companies in Berlin, and other cities across the country, in order to attract global tech talent as well as investing in upskilling existing talent.

In doing so, the city will maintain its place as a European tech hub and tech companies will continue to love Berlin.

If you want to speak to the Digital Republic Talent team about your recruitment / talent strategy or if you are looking for a new job opportunity in Germany, then we are on hand to help. Drop us a call on +44 203 637 3331 or email [email protected].

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