Well it didn’t take long for somebody to start speculating when Berlin might surpass London for tech startups. Although I agree that the Berlin tech startup scene will continue to grow and do well, I am somewhat more conservative when it comes to overtaking London.
Back in 2013 to 2014, tech startups in Berlin totalled some 145 versus 187 in London over the same period. A 28% difference in London’s favour. Source: http://edukwest.eu/london-berlin-lead-european-startup-scene/
Now, some are speculating that Berlin will surpass London to take the number spot in Europe for new tech startup enterprises. Source: http://startuphook.com/venturecap/startup-capitals-london-vs-berlin/1109/
As a Berliner for almost 10 years, I remain skeptical of this claim for a couple of reasons. Yes Berlin remains relatively cheap compared to its peers, but it’s not as cheap as it was with rent and living costs of some central Berlin areas rising by as much as 100-150% in the past five years. Take Freidrichshain or Kreuzberg for example.
Secondly, there is still a big difference in language and communication skills, which tends to go both ways as a positive and negative, albeit with it tipping slightly in London’s favour. Being able to write and speak well in English can be the difference between presenting a successful business plan to international investors and getting the time of day to do so.
Lastly, German financiers remain somewhat fiscally conservative when it comes to doling out funds to tech starups and supporting their business plans. London remains more financially supportive and less risk averse.
The German government also tends to be quite famous for paperwork, bureaucracy and regulation. One needn’t look further than the trouble Uber has had launching its private taxi service in Berlin.
Still with all those considerations, Berlin’s tech startup scene looks set to continue to grow, and with some interesting innovation, may overcome some of the challenges mentioned above. To overtake London though might take a lot longer than five years and some much greater effort to simplify startup processes and access to funds.