Berlin is boomtown for young entrepreneurs
By Dr. Rainer Zitelmann
On average, a new Internet company is set up in Berlin every 20 hours and last year, the German capital took the lead among the major German cities in the context of the digital economy, with 469 new business start-ups or 2.8 new businesses for every 10,000 gainfully employed persons.
Between 2008 and 2012, the number of newly formed Internet companies in the German capital rose by more than 44% while all other major German cities reported substantial drops in the number of start-ups. With a gross value added of 3.9 bln euros, the Internet sector as a whole contributed 4.2% of Berlin's total economic output. For the sake of comparison: Berlin's building trade generates an economic output of 3.3 bln euros or 3.7%.
The number of people working in Berlin's digital economy totals 62,400 – and more than one out of five is self-employed. The sector's turnover grew even faster than the number of businesses. While the latter increased by 16.5% between 2009 and 2011, the turnover for the same period rose by 21% to nearly 9 bln euros.
Berlin is developing more and more into a boomtown for young entrepreneurs and is considered the most attractive location for the Internet scene. Hasso Plattner, co-founder and chairman of the supervisory board of SAP quipped recently that his company should commit itself more in Berlin: “You simply reach a different crowd here. Fact is that young people prefer to spend the next years in the big city.” The SAP founder conceded that Walldorf near Heidelberg, the company's seat, is “slightly out of the way.”
Be that as it may, Berlin is attractive mainly for young people – and the demographic trend suggests as much. “The increased inflow of young people appears to be bearing fruit,” the Berliner Morgenpost recently wrote. “The majority of those moving to Berlin is aged between 20 and 30. Those who migrated here a few years back have settled down in the meantime and started a family.” As a result, Berlin has registered a positive birth rate since 2007, defying the national trend.
At the same time, incoming migration is accelerating – and is now higher than ever. What matters, though, is the type of people who are attracted to Berlin. More and more young, creative people and an increasing number of risk-sensitive people choose to realise their dream of their own business in Berlin. It goes without saying that all of this is very good news indeed for Berlin's residential property market.
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