Is Berlin the next Silicon Valley

Silicon Valley versus Berlin-Mitte

For four years, Willem Jonker has been the head of the ICT division of the European Innovation and Technology Institute EIT ICT Labs, where IT company founders can receive further training and which is responsible for coordinating various projects with industry and startups. The Dutchman previously worked for KPN and Philips, where he was Vice President responsible for research and development. He is also a professor of computer science at the University of Twente in Enschede. Jonker sees the size differences between the US market and Germany as one of the big brakes on growth for startups: "Especially for Internet-based solutions, a market with 80 million inhabitants like Germany is too small to become a profitable global player," he explains . "In addition, the European market is very fragmented."

Another problem in Germany is the low level of investment. "There is a difference in investment culture for startups," says Jonker. It is more difficult to get "significant investments" in Europe. Anyone who needs ten or 15 million euros in capital has a much better chance of obtaining it in the USA. At the same time, he observes that more and more investments are being made by large companies in the USA. From this point of view, however, it is positive that many large companies such as SAP, Deutsche Telekom or Siemens are based in Germany. In this country and in Europe one can benefit from the fact that these donors are better networked with the European startups.

Attract investors and startups to Europe

However, the computer science professor warns against trying to imitate Silicon Valley in Germany: "Silicon Valley is unique. We should understand the basic principles of success and apply them in a way that corresponds to our own DNA." EIT ICT Labs also recently opened a branch in San Francisco to build a bridge between Silicon Valley and its EU ecosystem and to ensure that more investment, talent, ideas and startups find their way to Europe. Because Europe has a lot to offer.

So the question arises as to whether a successful startup like Google or Facebook could also come from Germany in the next ten years? Jonker says yes and cites SAP as an illuminating and successful example. Europe needs more of it. Growing into a global player is difficult in Europe because many companies on the old continent are only nationally oriented. But there are also success stories such as Skype or Booking.com. This shows that it is possible, but German startups would also need more investment, especially in the growth phase. Jonker: "We talk a lot with investors in the US and Europe and find that in the US the risks and the investments are higher."

California entrepreneurship is in demand

What is still lacking with founders in Germany is the Californian entrepreneurial spirit: "The entrepreneurial mindset is something we have to work on," warns Jonker. The EIT ICT Lab is therefore aligning the programs to train this entrepreneurial spirit and to make the participants aware of how they can set up their own companies. "We need entrepreneurs, we need people who take these risks," the professor appeals.

Silicon Valley cannot be copied

Lindsay Eyink knows one of these data companies very well. The American studied visual communication and history, lived in San Francisco for eleven years, seven of which worked at Apple. The Silicon Valley expert led several teams there that worked on iTunes and the App Store, central points in Apple's digital revenue chain. Today she coaches founders and organizes startup workshops at the Software Campus in Berlin. Here she helps to solve problems and also advises on issues relating to management, personnel and design.

  1. Facts and figures about Berlin
    Yourfirm.de compared 10 major German cities in its 2014 Career Atlas. Everything you need to know about the startup metropolis Berlin can be found here:
  2. Bronze medal
    In the overall ranking, Berlin is in a good third place.
  3. Munich ...
    ... is in first place with a total of 73.7 out of 100 points. Thanks to the long-term economic planning and the good location conditions, the economy is growing continuously and makes Munich an ideal location for a career.
  4. Dusseldorf
    ... in second place profits economically from its branch diversity and the location advantages compared to other large cities.
  5. salary
    At € 3,280, Berlin ranks 9th in a salary comparison.
  6. Only in Leipzig ...
    ... earn even less with an average of € 2,850 per month.
  7. Job growth
    In addition, there is no higher job growth in any major German city. According to the Federal Employment Agency, the average annual growth between 2007 and 2013 in Berlin was 2.48%.
  8. Rental prices
    The m² of living space in Berlin costs an affordable € 8.82.
  9. Culinary specialties
    The currywurst is available in countless stalls in Berlin. It is so important to the city that it even has its own currywurst museum, where visitors can discover the history of German currywurst.
  10. Berlin has ...
    ... 3.52 million inhabitants and is thus ...
  11. Germany's largest city ...
    ... and of course the capital.
  12. education
    With 150,000 enrolled students and the Adlershof Technology Park, Berlin has the largest science and technology cluster in Germany.
  13. recreation
    The capital on the Spree offers its citizens more than 2,500 green spaces and recreational facilities for relaxation.
  14. Startups
    With currently 2,500 startup companies, Berlin is number 1 nationwide as the startup capital and the most popular contact point for founders.

Mainly historical reasons have made Silicon Valley a unique place for startups. "There are a few things that brought venture capital to Silicon Valley," explains Eyink. "Stanford University began closely linking defense and education in the 1950s. There are many entrepreneurs in the field today."

Even Eyink does not believe that it makes sense to build a European Silicon Valley: "Exporting Californian culture in order to imitate it here is the wrong way." Rather, according to the expert, it is about finding a better balance for work, life and money. In San Francisco, people are very fixated on their cause, with one exception: at Apple. In Germany and Berlin, on the other hand, the working approach is more "measurement-oriented", says Eyink, which is a good thing. "If you combine that with the high-risk approach, you get a new business model for innovation and technology." The chances for Germany in an international comparison are not bad: "Germany has a long history when it comes to innovations, research, science and technology. And it is not that this country will not continue this history."

Nevertheless, US business models cannot simply be transferred to Germany: "Business models like Uber are a cool idea in theory, but in practice they cause great damage," warns Eyink. The sharing economy makes sense overall, but it also reduces wages and social responsibility. There is a lack of business ethics. The SharingEconomy is currently heavily criticized in the US media.

In the ethical and social area, Germany can therefore score points, says Eyink: "People in Berlin I meet have more social consciences. Perhaps that's more a culturally European attitude compared to a more individual American one," she suspects. In Berlin people are more considerate of themselves and their health, while in the USA many people work until they drop.

Professionals without passion

Eyink sees a big difference between Germany and the USA in the area of ​​qualifications and training: "If you do your doctorate in economics in Germany, you get a job as an economist and do it for a lifetime," she says. In her team at Apple, on the other hand, there was a woman who studied photography and worked as a HR manager. She was interested in web design and development, worked on interactive iBooks and talked about it at the WWDC developer conference.

In US culture, people who have developed a passion for something are given a chance to do it instead of always sticking to their field. "My boss at Apple was a German, he never went to school," says Eyink. Another member of her team studied theater, but everyone was able to invent things and develop products. Steve Jobs is another good example: He didn't go to university and just did what was his great passion. And this culture and obsession, according to the American, has remained at Apple to this day. "If you're really obsessed, this is a good place for you. Nobody is going to stop you." (pg)