• Germany's news in English

'Poor but sexy' Berlin woos start-ups for jobs

AFP · 17 Nov 2013, 11:18

Published: 17 Nov 2013 11:18 GMT+01:00

Facebook Twitter Google+ reddit

Penniless and without major domestic industry to call its own, Berlin is nevertheless bursting with energy and setting its sights on start-ups to generate the jobs it so painfully needs.

"The aim must be to become the number one place in Europe for start-ups," said Berlin's mayor Klaus Wowereit, who coined the city's slogan "Poor but sexy".

But "there's still some work to do," he conceded.

The German capital hopes these mini-companies that bet on innovation can become an economic engine, replenish the city-state's coffers and "bring jobs to the city".

Consultancy firm McKinsey estimates they could generate as many as 100,000 jobs by 2020.

That would be a welcome breath of fresh air for a region where more than one in 10 people are without a job, the highest unemployment rate in the country.

One such start-up, Kiwi, has created nine jobs in less than two years.

When she had her first child in 2005, Kiwi's founder Claudia Nagel was faced with the difficulty of rummaging for her keys when she arrived home with her arms full.

So she came up with the idea of a remote-controlled electronic access badge that automatically opens doors from a distance.

Employing just four people when it was launched at the start of 2012, Kiwi now has a workforce of 13.

There are some 2,500 start-ups in Berlin, working primarily in the areas of Internet and IT, according to the fledgling sector's own industry federation.

This could lead the way for the city to becoming Europe's Silicon Valley, a title that currently applies more to London, which ranks seventh worldwide in innovation, while Berlin ranks number 15 behind Paris or Moscow, according to

"Berlin has many advantages. Above all, it draws lots of young international talent," says Claudia Nagel, whose colleagues include an American, a New Zealander and a Spaniard.

There is also a "high concentration of start-ups", which can be a source of cross-pollination of talent.

Moreover, the city enjoys a convenient geographical location, lots of space, but perhaps the biggest asset is its relatively low cost of living.

Hence, a budding entrepreneur's start-up funds "will last twice as long in Berlin as in London," says Luis-Daniel Alegria, who set up a free social events app, Vamos, in 2012 with two friends using loans from his family.

Without speaking a word of German, the 26-year-old Swede of Chilean origin is looking to raise one million euros ($1.3 million) and hire "three or four" people.

Berlin's image as a trendy city with a bubbling student and arts scene is an ace in its hand for attracting entrepreneurial talent. But it can't dazzle with money, because the city doesn't have any.

Mayor Wowereit hopes major companies on the look-out for fresh new ideas will take the entrepreneurs under their wing.

This month, Microsoft will open up the top floor of its spanking brand new office on Berlin's chic Unter den Linden boulevard to start-ups.

Telecoms giant Deutsche Telekom has its own incubator, called hub:raum, while media giant Axel Springer and mail order group Otto have invested in Project A, which takes its inspiration from Rocket Internet, the world's largest Internet incubator.

Story continues below…

Set up by the brothers Alexander, Marc and Oliver Samwer, Rocket Internet helped e-commerce group Zalando and web-dating site eDarling get started.

"In these crisis times, start-ups and entrepreneurship are the only option," Marc Samwer told the technology conference TechCrunch Disrupt, which was held in Berlin in October in an old industrial hangar on the banks of the
Spree river.

The thorny question of financing remains the principal hurdle to Berlin's start-up ambitions, but another is the reluctance of students to become entrepreneurs. And the administrative difficulties can be daunting, even more so those who do not speak German.

Jens Begemann, developer of Wooga games, says the biggest rub is trying to find follow-up investors to finance the growth phase.

Germany's outgoing conservative government had tabled the idea of a stock exchange for start-ups.

But whether it becomes more concrete will depend on the current negotiations between the Social Democrats and conservatives to form a new coalition government after the September general election.

For more news from Germany, join us on Facebook and Twitter.

Facebook Twitter Google+ reddit

Your comments about this article

Today's headlines
Creepy clown scare spreads to Germany
Two of the clowns were apparently equipped with chainsaws. Photo: Pedro Pardo / AFP file picture

Police said Friday five incidents involving so-called scary clowns had occurred in two north German town, including one assailant who hit a man with a baseball bat, amid fears that Halloween could spark a rash of similar attacks.

Student fined for spying on women via their webcams
Photo: DPA

Student from Munich fined €1,000 for spying on 32 different computers, using their webcams to take photographs, or record their keyboard history.

This is how much startup geeks earn in Germany
Photo: DPA

A comprehensive new survey of 143 startup founders shows how much you are likely to be earning at a German startup, from entry level all the way up to sitting on the board.

Man dies after beating for peeing near Freiburg church
The Johannes Church in Freiburg. Photo Jörgens Mi/Wikipedia

A middle-aged man from southern Germany has died after being attacked by a group of men who took umbrage with the fact he was urinating in the vicinity of a church.

The Local List
Seven German celebrities with uncanny doppelgängers
Former Berlin mayor Klaus Wowereit and actor Alec Baldwin. Photo: DPA; Gage Skidmore, Wikimedia Commons

Check out these seven look-a-likes of well known German figures - we admit that some are more tenuous than others...

Israel seeks to buy three new German submarines: report
A Dolphin class submarine. Photo: DPA

Israel is seeking to buy three more advanced submarines from Germany at a combined price of €1.2 billion, an Israeli newspaper reported Friday.

Here’s where people live the longest in Germany
Photo: DPA

Germans down south seem to know the secret to a long life.

More Germans identify as LGBT than in rest of Europe
Photo: DPA

The percentage of the German population which identifies as lesbian, gay, bisexual or transgender is higher than anywhere else in Europe, according to a new study.

'Reichsbürger' pair attack police in Saxony-Anhalt
File photo: DPA.

A "Reichsbürger" and his wife attacked police officers on Thursday, just a day after another Reichsbürger fatally shot an officer in Bavaria.

Five things not to miss at the Frankfurt Book Fair
Photo: DPA

From consulting a book doctor to immersing yourself in an author's world with the help of virtual reality, here are five things not to miss at this week's Frankfurt Book Fair, the world's largest publishing event.

Sponsored Article
How to vote absentee from abroad in the US elections
10 things you never knew about socialist East Germany
Sponsored Article
Last chance to vote absentee in the US elections
How Germans fell in love with America's favourite squash
How I ditched London for Berlin and became a published author
Sponsored Article
How to vote absentee from abroad in the US elections
12 clever German idioms that'll make you sound like a pro
23 fascinating facts you never knew about Berlin
9 unmissable events to check out in Germany this October
10 things you never knew about German reunification
10 things you're sure to notice after an Oktoberfest visit
Germany's 10 most Instagram-able places
15 pics that prove Germany is absolutely enchanting in autumn
10 German films you have to watch before you die
6 things about Munich that’ll stay with you forever
10 pieces of German slang you'll never learn in class
Ouch! Naked swimmer hospitalized after angler hooks his penis
Six reasons why Berlin is now known as 'the failed city'
15 tell-tale signs you’ll never quite master German
7 American habits that make Germans very, very uncomfortable
Story of a fugitive cow who outwitted police for weeks before capture
Eleven famous Germans with surnames that'll make your sides split
The best ways to get a visa as an American in Germany
jobs available
Toytown Germany
Germany's English-speaking crowd