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February 18, 2012

Berlin often makes headlines for its cultural cache and political prestige, but the city has, until recently, been outshone by Germany’s many thriving economic hubs. Munich and Stuttgart dominate the international auto industry and manufacturing. Hamburg and Cologne broadcast high-quality news and media. Germany’s stock exchange and financial powerhouses populate Frankfurt, and the Rhine/Ruhr is home to the country’s heavy industry. Berlin was for decades starved of its prewar capacity for business and industry, but has recently attracted a uniquely contemporary type of investment and prestige.

Upon reunification many predicted that metropolitan Berlin would see a massive renaissance, with industry and clout accompanied by millions of new residents flooding back. Chancellor Helmut Kohl predicted a “blossoming landscape” of investment, the cutting-edge frontier of capitalism. Almost none of this envisioned expansion materialized, and nearly two decades later the city was still trudging with a stagnant population, one of the highest unemployment rates in Germany, and an economic base that was neither diversified nor strong.

Although thousands of government workers made the move from Bonn to Berlin, bringing with them wealthier families and steady paychecks, the city saw little growth in anything but it’s pile of debt. The city was far from revived. Central neighborhoods were invigorated but a broad economic foundation was still largely absent.

In the second half of the 2000’s however, several factors coalesced to provide fertile ground for growth and allowed Berlin to confidently stride onto both the national and international stages as a rising star. For starters, Berlin is cheap. Rent and general cost of living are a bargain, especially when compared with London, Paris or Rome. The city is spacious and under-built, allowing for plenty of expansion in the coming years. Large new luxury apartment and office complexes are under construction in prime locations across the city center, priced affordably.

Cheap in Berlin, however, doesn’t mean inconvenient or unstable anyone who has been to this capital knows of its world-class infrastructure – everything from the trains to water and electricity are reliable and receive continuous investment. As Germany emerged as the economic engine of Europe after the financial crisis, Berlin’s importance as a political powerhouse also became recognized. This surge in political clout has helped make the city much more publicized and has undoubtedly raised its stature.

As a result of these factors, a supremely important engine of growth crowds the streets and fuels Berlin’s rise: Bright young talent. Berlin has succeeded in attracting hundreds of thousands of them, each arriving with a diverse list of aspirations. Some have come to study in the cities expanding research centers, while others have come to launch hundreds of innovative tech start-ups that have earned the city the new nickname “Silicon Avenue” and infused it with tens of thousands of jobs overnight. Still more have come to launch fashion and art careers, driven from London and New York by crushing overheads and a lack of resources. Since 2009 Berlin has also become a sort of refuge for many young victims, many Irish as well, of the European Debit Crisis searching for a way to pay the bills and ride out the crisis back home.

All of these people, and all of these reasons, have finally helped Berlin grow out of a seemingly insurmountable rut. The city is growing again, and unemployment is starting to edge down. While many doubt that Berlin will ever regain the industrial prowess or financial clout it once possessed, it now seems likely that the city will become the vibrant and youthful start-up/research/cultural capital of not only Germany, but the entire European continent.