A new class of SMEs emerging in Berlin

Half-yearly report of Berlin Partner for Business and Technology

Record employment, a rising influx of skilled workers and a booming start-up scene – all indicators of the German capital’s economy point to growth. Berlin Partner for Business and Technology supports companies in their move to Berlin and their expansion at the location, and therefore contributes actively to this growth: in the first half year of 2016, Berlin Partner assisted companies in 144 projects that involved an investment of around 200 million euros and the creation of 4,232 new jobs in Berlin – more than one third compared to the same period last year. Berlin Partner was also able to increase the number of settlements: 60 companies were settled in Berlin over the first half of 2016, as many as in the whole of 2014.

Companies are attracted to Berlin mainly because of the unique composition of its ecosystem which brings together established business, science and start-ups. This dynamic has become the driving force behind innovation in the German capital. “Companies see Berlin as a creative laboratory and powerhouse for ideas. This is the image of Berlin that we see reflected around the world. Anyone looking to break new ground or to shape the future simply has to do it in Berlin”, says Andrea Joras, CEO at Berlin Partner for Business and Technology. 13 of the DAX 30 companies already have innovation centers in Berlin. Bosch is yet another technology company to open an innovation center in the German capital: the branch of Bosch SoftTec is tasked with building partnerships with start-ups and universities and hence to drive forward the development of cloud-based services for infotainment and mobility. Around a dozen developers work at the new office. Berlin Partner provided advice on recruiting young talents and put Bosch SoftTec in touch with the science and start-up scenes. Another example is Testo AG. Looking to continue strengthening its operations in the area of the Internet of Things, the world market leader for portable and stationary measurement technology opened its own branch for software development this year in Berlin, a move that will create around 30 new jobs. Berlin Partner provided assistance in finding the right location and recruiting talent.

Innovative drive is not the only characteristic of the booming start-up scene in the German capital. “The start-ups create their own sustained growth and are establishing a new class of small to medium-sized enterprises in Berlin. A large amount of the founders are aiming for technology leadership. Instead of exiting the market in the foreseeable future, most of them want to grow here in Berlin”, emphasizes Dr. Stefan Franzke, CEO at Berlin Partner for Business and Technology. “This is reflected in the projects in which Berlin Partner is involved: start-ups now account for every fourth new job.” Investments in the city are designed for the long term: start-ups have invested roughly 55 million euros in the business location, equivalent to roughly one quarter of total investments. Looking to provide meaningful support for this growth, Berlin Partner has created new services – such as weekly matchmaking events with companies in the industry, a fast-track visa process for skilled foreign workers and a start-up exchange program with the largest founding capitals around the world.

Outlook: Brexit and its consequences for Berlin
Many companies from Great Britain have faced uncertainty since the British decision to leave the European Union. The enquiries that Berlin Partner has received since the referendum vote indicate that young companies and international talent in particular are questioning their current location. “The most definite enquiries are coming from Fintechs in London. They are considering a move to Berlin to make sure they retain access to the continental European market“, says Dr. Stefan Franzke. “But it is currently impossible to predict how many companies will actually leave Great Britain. If they do, though, Berlin will become their preferred location. With its growing economy and a creative, international environment, Berlin is a convincing location for start-ups and young talents alike.” Berlin Partner will visit London for one week this autumn to promote the German capital.