Digital Capital of Germany

No other factor is as important for the performance of a given real estate market than the local industry structure. The main question is, does the city or region attract industries of long-term viability or not? For many years, the economic outlook of the German capital was bleak.
While Frankfurt was seen as the German financial hub, Stuttgart as home of the German auto industry, Düsseldorf the German fashion capital, Berlin was associated with welfare recipient and student activists. There have been massive changes, though, in recent years. A survey on the digital economy in the city that was recently published by the IBB Investitionsbank Berlin shows: Berlin has evolved into the most important centre for Germany’s digital economy. Today, the sector accounts for 59,000 jobs in our city. Nearly 18,000 new jobs have been added in this sector in Berlin since 2008. This means that one in every eight jobs created since 2008 was created in this industry.
Especially when you compare the situation with other major cities, the employment figures in Berlin’s digital economy are quite impressive, as the survey shows. The only other city where jobs were created on a similar scale (14,000 since 2008) was Munich. The figure for Hamburg is only 9,000, that for Frankfurt am Main just 7,800. At the same time, Berlin has increasingly turned into a start-up location attracting bold young entrepreneurs from all over the world. In 2013, the year referenced by the aforesaid survey, 436 new businesses were formed in the digital sector. Berlin’s higher education institutions play a key role here. The “Tagesspiegel,” a local daily, quoted a poll on the subject of start-ups at the ten universities in the region when reporting that the interviewed companies had created 17,000 jobs and generated 1.7 billion euros in combined revenue. Private equity (or “venture capital”) lenders have also been stepping up their commitments in Berlin-based companies. A survey by the University of Münster has tracked the funds invested in the city in 2012/2013. It suggests that especially those lenders who support internet startups have tired of Munich. In 2012 and 2013, two billion euros were invested in start-ups in Germany, with companies in Berlin and Potsdam accounting for 873 million euros thereof. Only 378 million euros were earmarked for Munich. An increasingly important job generator in Berlin is digital trading. The number of jobs n online retailing is more than ten times as high as it was in 2008, currently totalling around 8,000.
It is no coincidence that the company Zalando originated in Berlin. The legendary Samwer brothers, who made a cool billion with their Rocket Internet and various companies, built up their business in Berlin – rather than in their native town of Cologne. And where do they put their money? Anyone familiar with Berlin’s apartment building market knows that the Samwer brothers are highly active investors here. The money made in the online sector is invested in Berlin’s residential property market – quite as it should be!