A year of opportunities

Berlin Partner für Wirtschaft und Technologie: 2020 Annual Report

After a promising start to 2020, the pandemic surprised the Berlin economy in a moment of great joy, great motivation and an almost irrepressible zest for action. Suddenly we found ourselves in an unprecedented situation that has challenged us all and continues to challenge us as a society, as an organisation, and individually. Flexibility and spontaneity have been required. Also at Berlin Partner: overnight, the state's economic development agency became an aid organisation for the Berlin economy. We received thousands of calls to our new hotline, provided information about relief measures, and advised companies in need. Given the extraordinary circumstances and the expected dramatic effects of the mitigation measures, Berlin's economy has put its creativity and resilience to the test in the crisis and still delivered results in this exceptional year that allow us to look to the future with optimism.

The annual balance of Berlin Partner was no exception to this point of view: In the 262 projects that Berlin Partner successfully supported and completed, 6,866 new jobs were created, roughly the same numbers as we posted in 2016. The companies are investing around €872.8 million in Berlin, the most ever committed since Berlin Partner was founded. The reputation of Berlin as an innovation location remains good both at home and abroad. The city is and will remain attractive for companies, investors, and talent. In this past exceptional year, Berlin Partner was able to bring 80 companies to Berlin, 41 of them from abroad. In addition, the new arrivals set up 108 new projects with Berlin Partner. There are 48 interested parties from abroad, with companies from the USA making up by far the largest share, followed by Chinese and Japanese firms.

Ramona Pop, Mayor and Senator for Economics, Energy and Public Enterprises: “It makes me optimistic that in addition to crisis management, the demand for the core tasks of Berlin Partner supporting the establishment of businesses and expansion and promoting innovation remained almost unchanged. Despite the crisis, Berlin as a business location remains on the road to success in key sectors. The digital economy is impressively defying the crisis and remains the most important growth driver for the capital. The confidence of the companies and their commitment to Berlin as a business location are good signs and give hope for a swift economic recovery after the pandemic has been successfully contained."

Berlin has impressively made a name for itself as a hub for innovative technology and scientific research in Germany and thus as one of the most dynamic business locations in Europe. And that also applies to Germany as a whole: According to a study on behalf of the German economic development agency, Germany Trade & Invest (GTAI), Germany tops the list of the most trustworthy countries with the most investment-friendly economic plan in Europe.

Dr. Stefan Franzke, CEO, Berlin Partner: “I am proud of the way Berliners have reacted to the catastrophic events of the past year in their companies, in government, and also at Berlin Partner: with courage, with defiance, with ingenuity, and with understanding if something didn't work as planned. It shows that what we claim about Berlin are not just marketing phrases but reality: Berlin has always been a city of ideas, inventions, and experimentation. We have quite rightly established new routines and channels for communicating and staying connected. And it is now clear that the way out of the pandemic is no 'return to normal'. It will certainly not be as easy as it used to be and that's a good thing. We'll be more agile and digital, we'll keep what we've learned, and we'll keep improving. 'I'm always making a comeback but nobody ever tells me where I've been', Billie Holiday is supposed to have once said. Berlin has always been here but it's also always making its comeback. That will be the case again this year. And we will be right there, working for the Berlin economy."

In 2020, Berlin was again the epicentre of the German start-up scene: With 314 financing rounds, the start-ups in the federal capital recorded 42% of all financing rounds recorded in Germany, as many as Bavaria, North Rhine-Westphalia, Hamburg, and Baden- Württemberg put together. Four of the five largest deals were closed in Berlin. The Berlin start-up ecosystem has survived the pandemic well so far, even if the investment volume decreased slightly in 2020.

The projects supported by Berlin Partner also provide important economic impetus for the entire Berlin economy: In 2020, a year that saw an overall decline in private investments, 3.7% of all private investments in Berlin can be traced back to investments by companies supported by Berlin Partner according to calculations by economists at Investitionsbank Berlin (IBB). This additional stimulus in turn has a direct and indirect effect on economic variables such as growth and employment. However, this influence was much less pronounced in 2020 than in previous years, as the business activities of many supplier companies were severely restricted due to the pandemic.

Using a regional economic model calculation, IBB examined how the additional investment and employment effects triggered by Berlin Partner as well as investment in R&D will affect the overall performance of the Berlin economy in the medium term. They determined that Berlin's gross domestic product will be supported by a total of €1.6 billion in the period from 2020 to 2022, although this was limited to €400 million in 2020. The majority of the impact will be seen only later in the following years. In conjunction with the investments of companies advised by Berlin Partner, the newly created 6,866 jobs that have been reported will in turn create further employment in both upstream and downstream industries. The construction and property industries are especially benefiting, because new companies need commercial space and support services. In this way, some 1,500 additional jobs will be created or secured, but only starting in 2021. One should also note that some of these additional jobs will only be temporary. According to the IBB model, Berlin Partner's work is paying off for the city's budget, increasing Berlin's state income by almost €200 million in 2020 due to the added value created.