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Berlin – German Capital of Start-ups

The number of new businesses set up in Berlin over the past two years is higher than in any other German state. This is one of the findings of a recent survey on start-ups by the KfW development bank (“KfW-Gründungsmonitor”). Between 2013 and 2015, the average number of start-ups in Berlin equalled 26 for every 1,000 residents and year. That is twice the rate reported from Bavaria and Baden-Württemberg for the same period of time. Berlin's appeal for people wishing to start a new business is explained not least by the synergy effects that are unique to large conurbations. Above all, start-up entrepreneurs appreciate the city's short distances and the great transport infrastructure. This is a particularly important aspect for the service and retail sectors. But Berlin is also highly attractive for the media and IT industries. Inversely, the lively start-up scene is a boon for Germany's first city. According to the KfW start-up survey, start-up businesses act as an incentive to well-established companies to invest in innovations. This in turn enhances the competitiveness of Berlin's economy as a whole, encouraging companies to take a forward-looking approach, and ultimately helping to create new jobs.

Continued Upward Trend in Q1 2016

The brisk upward trend of Berlin's start-up scene in 2015 carried over into the first quarter of 2016. This is the upshot of the “Economic Report. The Economic Situation in Berlin” published by the Senate Department for Economy, Technology and Research. Between January and March 2016, a total of 11,020 new businesses were launched in Berlin, which represents a 3.5-percent increase over prior-year quarter. The bulk of new businesses formed during Q1 2016 was registered in Berlin's service sector. In the tertiary sector, most new start-ups were retail businesses, with the segment registering no less than 1,900 start-ups by the end of the first quarter. And the flurry of new technical service providers, which represent a fast-growing sector in Berlin, was matched by a steep increase in the number of jobs created in this industry. It is generally safe to say that the majority of new jobs is created in the city's service sector. The up-and-coming information/communication service segment alone reported a one-year increase of 6,000 new jobs by the end of March 2016. 

In addition to being attractive for investors as the country's start-up hub, its brisk job growth thus makes Berlin a dynamic source of employment as well. Since 2012, the rate at which the city creates jobs has been higher than in any other German state, and this is due not least to Berlin's booming start-up scene.