Talent and growth head for the cities

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Talent and growth head for the cities

The depressed rural areas of eastern Germany where economic growth is practically nil, should be taken as a stark warning for western regions of the country, an economic institute said on Wednesday.


Well-qualified people are moving to the cities such as Berlin, Dresden and Leipzig, enabling those areas to do well, while leaving rural areas empty.

“Aside from Berlin, Dresden and Leipzig, eastern Germany does not have much to offer,” the Cologne Institute for Economic Research (IW) said, presenting a study on economic growth across the country for the first six months of the year.

The absence of qualified workers makes the difference between the eastern rural areas -- with an average growth rate of less than half a percent -- and cities, which do much better.

And the trend is not just limited to the east, according to the institute. "Western German states without densely populated areas should look carefully at the problems in the east, because they could be in store for something similar," the institute said.

Despite the ongoing debacle over the yet-to-open new international airport, Berlin had the highest economic growth rate in the country during the first half of the year.

“Berlin is losing its negative image with a lot of companies,” IW economist Klaus-Heiner Röhl told the Die Welt newspaper. Service providers were particularly attracted to the capital he said, even if their customers, often large corporations, were not based there.

“The most important plus for the firms is that many qualified workers want to come to Berlin,” Röhl told the paper.

The capital topped the list with 1.8 percent growth, followed by Baden-Württemberg and Lower Saxony, both registering 1.6 percent economic growth.

And although the non-Berlin eastern states had an average growth rate of less than 0.5 percent, western German states had average growth of 1.2 percent.

Eastern Germany suffers from qualified workers moving to urban areas, with a higher concentration of the population and more economic power.

The Local/mbw


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