Berlin vs London: both cities balance centuries-old culture with vibrant tech scenes. And both claim to be Europe’s #1 hub for digital startups, but only one can take home the silicon crown. We compared the numbers to help you decide where it’s best to locate your hot new unicorn company.
Berlin has a reputation for nurturing creative people and lifestyles. Every year, its galleries, museums, music venues and theaters attract millions of tourists. It also features several charismatic neighborhoods, like the Bergmannstrasse, which are filled with activity, culture and entertainment—the perfect breeding ground for creativity. It is also increasingly becoming a multicultural city, with an estimated 44 percent of new business started by entrepreneurs who are not originally from Germany.
The city also offers creative minds a wide range of incubators, co-working spaces and innovation labs. And it’s not only the private sector that’s in on the game: the German federal government has outlined a high-tech strategy that provides resources to help tech companies succeed. These conditions provide startups—as well as established—companies optimal conditions in which to grow.
In 2010, there were almost 43,000 startups in the German capital—an impressive number for a relatively small city. In fact, this corresponds to a whopping 124 startups per 10,000 residents. Overall, an estimated 60,000 people work in the digital domain.
According to the Global Startup ecosystem ranking, in 2015 Berlin was the fastest growing startup city in the world. Data tells us that:
- Every 20 minutes a startup is founded in Berlin
- By 2020, the startup ecosystem will create more than 100,000 jobs
That’s sounding pretty good—and we might be a tiny bit biased because 99designs’ European office is headquartered in Berlin—but we’re going to be fair and give London its shot, too.
The United Kingdom has recovered from the global financial crisis, and the tech industry has become a key contributor to the country’s economic growth. In the first quarter of 2015 alone, 459 million pounds of venture capital was invested in emerging digital companies. This represents an increase of 66 percent over the first quarter of 2014.
It’s hard to believe, but five years ago there were only 250 digital companies in the British capital. Since then, development has exploded: there are now over 3,000 such companies in London, employing a total of 1.5 million workers. This growth is projected to continue in the coming years. Accordingly, it is not surprising that London has the biggest startup ecosystem in Europe and the fourth largest in the world. Entrepreneurs in London will benefit from easy access to wealthy consumers and large corporations, ambitious British government initiatives and an established funding landscape.
Like Berlin, London has always been known for being on the cutting edge in art and culture. In the past few years, however, the city has witnessed a migration. The city’s population is growing disproportionately fast, resulting in an increased demand for residential and commercial properties, which drives up prices. And as property prices keep going up, the creative classes are forced out.
And the winner is… Berlin
Both cities have a lot to offer entrepreneurs: there are booming creative scenes with great cultural activities and nightlife for employees; the governments are helping to fuel tech growth with economic incentives; and there’s a large, educated, eager workforce. London has the edge in terms of technical ease of starting a business—it’s cheaper and faster. However, the fact that salaries are approximately even across the two cities makes the significantly lower cost of living in Berlin a smarter place for a startup to put down roots.
Links to studies cited:
Berlin Startup Hub: The Rise to europe’s Startup Capital: http://startupgeist.com/berlin-startup-hub/
Information about the European Digital City Index: