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Berlin versus Britain: Entering an entrepreneurial utopia

Berlin has become quite a draw for tech entrepreneurs over the past few years. But is it really the entrepreneurial utopia it appears to be?
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Here, we put the German capital of Berlin under the spotlight to find out why exactly the city is currently so in-vogue.

More importantly though, we will identify the advantages for  tech companies – who are largely responsible for Berlin’s recent Renaissance – being based here in Britain rather than Germany.

Why Berlin?

Cost is undoubtedly the major factor. Tech entrepreneurs across the world are fully aware of the benefits of immersing themselves in London’s iconic tech hub, but the general consensus within the burgeoning community is that the Silicon Roundabout isn’t the “be all and end all” for a European base in 2017.

Other cities – with their substantially lower rent and living costs and better quality of life – can potentially offer a better base for startups to grow and flourish. Berlin has emerged as a popular alternative to London for companies large and small within the tech sector.

It also goes without saying that Berlin is a wonderfully vibrant city with plenty to offer a tech workforce in terms of entertainment and culture. A crucial factor when you consider the majority of tech startups will consist of a largely young and culturally diverse labour force.

Why Britain?

The UK has advantages that mean it is likely to retain the largest group of tech talent for years to come.

Britain has a growing number of innovative tech hubs (Birmingham, Bristol, Leeds, Manchester, Newcastle) to rival the capital. These cosmopolitan cities all boasts a multitude of benefits for tech companies.

For example, Birmingham was named as one of the best cities in the world and named ahead of the likes of London and Berlin as the top city in Western Europe to invest back in 2015.

Two years on, Britain’s second city has recently amassed further plaudits: named a startup hotspot, the most enterprising city in Britain, as well as one of the hippest destinations in Europe!

That’s without even mentioning the Bullring, five Michelin star restaurants in the city, Broad Street, the Balti Triangle, 571 parks (more than any other equivalent-sized European city), and the city boasting more miles of canals than Venice.

Of course, each British city has their own unique character to attract overseas investment. But here’s what we think are the key reasons tech companies will continue to open European offices in the UK:

Key advantages British cities have over Berlin

(1) No language barrier

English is the “international language” for both programming and traditional business. Tech companies in Britain are able to attract the best talent from across the world as a result.

(2) Transport

The UK is ideally placed for trips overseas. Britain is a leading aviation hub with 60 airports located across the UK. The Channel Tunnel is a useful gateway to Europe. The UK’s new high speed rail network will also be completed within 12 years.

(3) Brexit

The weakness of the pound is currently an advantage for American businesses looking to relocate. It’s also worth noting that prices in Berlin have drastically risen recently due to the city’s popularity in the tech sector.

(4) GMT

Greenwich Mean Time allows UK-based companies to trade with Asia in the morning and the East Coast of US in the afternoon. However, the time at 5pm GMT is 9am PST in San Francisco, leaving a small window if the UK office closes at 5:30pm-6pm.

Berlin is one hour ahead of us, which may be an issue for businesses that need an instant response from colleagues over in Silicon Valley during business hours.

We asked Phil Cox, the president of the UK branch of Silicon Valley Bank, which offers banking and loan services to the tech industry), for his thoughts on the Berlin/London tech debate.

“We don’t see Berlin as a rival to London – we think the innovation economy benefits from as many tech hubs as possible. In the US, sure, Silicon Valley is the epicentre but cities like Boston, Chicago, New York and Austin all have so much to offer in terms of generating ideas and great businesses.

“At Silicon Valley Bank we wouldn’t choose between Berlin and London, we want to work with businesses in both cities. Similarly, we want to ensure that Birmingham, Manchester and Edinburgh are thriving too. We don’t think about competitors – the technology industry is about fellow travellers solving real problems across the globe.”

Silicon Canal’s Simon Jenner has revealed why Birmingham can be a key tech hub in 2018: “The combination of Birmingham’s affordable living costs and the substantial investment into the city has seen a spike in the number of regional offices and European HQs springing up in Brum over recent years.

“In broad terms, British cities offer superb cost-effective homes for exciting tech talent.

“I do agree with the point raised by Phil though. Fresh and pioneering tech start-ups will seek to continue to utilise global talent, charging down the doors of opportunity for employment AND collaboration across a multitude of thriving tech hubs.

“There really has never been a more exciting time to be a part of this vibrant global tech community.”

Achtung, Berlin! While it’s true that tech has brought cities and communities together, it’s also fair to say that the UK is still firmly in pole position to attract innovative tech companies from America and overseas.

We just need to be courageous enough to talk up a post-Brexit Britain, not just London, as the best place for the world’s brightest minds.

Andy Parker is digital marketing manager at Custard Factory

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