Posts Tagged ‘germany’
Feargus O’Sullivan at CityLab noted a recent study observing that Berlin, unique among major European capitals, is poorer than the national average. This does highlight Berlin’s particular problems, he suggests, but also notes the extent to which Germany outside of its capital is prosperous.
Germany would actually be better off without Berlin. That, at least, might be the skim-read conclusion to be drawn from a challenging new report from Cologne’s Institute of German Economy. The report, released Tuesday, notes that Germany’s per capita GDP would actually be higher if Berlin and its population were removed from national economic figures.
[. . .]
Before we look at why Germany’s figures skew differently, it’s worth looking more fully at the figures the report provides. They don’t, for instance, actually suggest any inherent relation between the size of a capital’s contribution to national GDP and the overall prosperity of a country. Of all capitals surveyed, it’s actually Athens that shows the greatest national dominance. If that city and its habitants were removed from national figures, then Greece’s GDP per capita would drop by 19.9 percent. The Paris region shows similar levels of national contribution: its absence would slash French per capita GDP by 15 percent. In the U.K., no London would mean a drop of 11.2 percent in per capita GDP. A Madrid-free Spain’s per capita GDP would drop by 6 percent, while even Rome—known for playing second fiddle to the economic powerhouse of the North Italian Plain—would cause Italy’s per capita GDP to drop 2.1 percent if it were removed from the country’s economy.
It’s only in Berlin that these figures appear to suggest Germany would actually be better off without it. Removing Berlin and its residents from German economic tallies would, according to the report, actually boost the country’s per capita GDP, albeit by a meager 0.2 percent.
The reasons for this are as distinctive as Berlin’s standalone negative performance. Certainly, a rather sluggish economy doesn’t help. Without its capital status, Berlin might be just another rustbelt city, an ex-industrial metropolis whose swing towards an economy based on the service, technology, tourism and creative sectors has (as so often is the case) failed to fully compensate for the decline of the city’s industrial base. It’s not for nothing that Berlin had until recently a reputation as a cheap place to live. Prices long remained low because jobs were often scarce and wages relatively meager. As of this July, Berlin’s unemployment rate of 9.5 percent was the second highest (after Bremen) of any German federal state. If there is a loser hidden behind Berlin’s relatively poor performance, it’s unemployed, underpaid Berliners who are struggling despite living cheek-by-jowl with the government of Europe’s most powerful country.
Berlin’s unusual performance is still arguably as much an example of the strength of Germany’s regions at the weaknesses of the city itself. While in other countries, capitals suck in all the wealth, talent and investment, Germany remains a mosaic of prosperous cities scattered throughout its territory. Its largest metropolitan area (as opposed to its largest city) is not Berlin but the huge Rhine-Ruhr region, an industrial conurbation that’s home to over 11 million residents. Munich and Hamburg are both major economic and cultural centers with higher median wealth than the capital, while the heart of continental Europe’s finance industry is in Frankfurt. The Federal Constitutional Court is in the modest city of Karlsruhe, while the city with the highest per capita GDP is actually Wolfsburg, home to Volkswagen.
Adam Satariano and Stefan Nicola wrote for Bloomberg BusinessWeek about Berlin’s emergence as a startup hub. This is not mentioned in the article, but I wonder how Brexit will help or hinder this.
The Factory would feel pretty much like any big Silicon Valley headquarters, if you couldn’t see the death strip. In the 19th century, this 130,000-square-foot Berlin warehouse held a brewery. In the 20th, it was an air raid shelter, then rested in the shadow of the Berlin Wall. East German watchtower guards gunned down people trying to scramble across the border. (Hence the term “death strip.”) Today the retrofitted space is home to dozens of tech companies, including Uber and Twitter, and is the headquarters of the music streaming service SoundCloud.
Inside, the Factory is packed with all the perks of a Silicon Valley campus: nap rooms, scooters, 3D printing stations. Headphone-wearing millennials hunch over MacBooks or mill around a lounge where guitars hang from the wall near books with titles such as The Lean Startup and The Startup Game. Conference rooms are named for the regulars at Andy Warhol’s Factory. There are 700 people here; in addition to the full-time employees, a lot of individual tech workers pay €50 ($55) a month for access to a common work area.
“It’s a social club for startups,” says Factory co-founder Lukas Kampfmann, 30, wearing a T-shirt bearing the names Steve (as in Jobs), Elon (Musk), Bill (Gates), and Mark (Zuckerberg), printed in the font Helvetica like the familiar Beatles shirt. On the roof of the warehouse, with a clear view of the former death strip, Kampfmann says his community’s emulation of Silicon Valley isn’t an accident. “We admire American movies, culture, fashion, music,” he says, and this is the logical next step.
Across Berlin, young tech workers from throughout Europe are flooding into cafes and rehabbed Soviet-era buildings, drawn to the German capital by the promise of foosball-casual work environments, cheap rent, and an uninhibited party culture. It’s a package deal that can be tough to match elsewhere in Europe. A decade ago there were a few dozen tech startups in Berlin. Now there are 2,500, and the Investitionsbank Berlin, the government’s regional economic development agency, says there are 70 percent more digital jobs there than there were in 2008.
Although a handful of old-school conglomerates such as Siemens and SAP remain Germany’s most visible technology companies, they’re no longer the country’s main draw for aspiring hardware or software developers, says Martin Hellwagner, a 27-year-old coder who moved to Berlin from Austria in early 2014. “I really wanted to work for a startup,” says Hellwagner, who spends 60 hours a week working on Uberchord, a guitar-lessons app. “You have more responsibilities. It’s not just a 9-to-5. You actually change something, and your opinion matters.”