Berlin and London have a lot more in common than entrepreneurship, venture capital, growth and glamour. According to a panel of women from successful businesses in both cities, both Berlina nd London have similar issues with the lack of diverse culture in the business ecosystem, which could be stemming economic growth.
The speakers were Justine Powell, CEO of Handelsblatt global – also known as the “FT of Germany”, Mali Baum, the founding partner of W Lounge, a venture set up in Berlin to help big business attract more women to their C Suites, and Pip Jamieson, founder of The Dots, a London based creative recruitment agency.
All three agreed that both cities have a way to go in achieving diversity. In Germany particularly, the business culture is deeply embedded in traditional patriarchy. Berlin is bucking that trend by encouraging talent from all over the world to join its thriving hub of technology and creative start ups, but the white male intermediary still holds the wealth.
Berlin based Justine Powell pointed out that it is the overwhelmingly obvious that the provision of free childcare for each child over one year old is what makes Berlin successful at attracting women, but also in fostering startups.
In London the cost of childcare is far higher at around £1600 per month. This means that startups struggle to attract women.
Pip Jamieson said, “I’m a massive fan of Sadiq Khan but the cost of housing is far too high for most young people in London. We need affordable housing for it to be successful.”
She went on to add, “I love the fact that London is a melting pot of industry, culture and diversity including neuro-diversity (eg: dyslexic, autistic, ADHD). We have great creative solutions and products because of that mix of talent. We are celebrating that in London.”
However Mali Baum added that while we need to reach lower socio-economic groups and help refugees, there is a danger that the welcoming culture in Berlin could backfire. “The kids (refugees) will grow up to be European, but many others won’t have opportunities.”
“I am from Tel-Aviv and I have two teenagers, the problem we are facing is the potential ghettos of refugees in Berlin.” So the government needs to do more to address this long term.
The millennial workforce will create a new eco-system of diverse business according to Jamieson. She says, “The pay gap release has been great for diversity, the 8000 businesses we work with are looking for more diverse talent. Currently only 2.2% of funding goes to women, but a diverse board drives profit. The issue is churn; millennials will jump quickly. They are 43% more likely to stay with a business if it is inclusive and represents society as a whole.”
Baum echoes this saying that she would only invest in teams that are diverse. “This is a rational business move as well as a way to raise awareness.”
Powell is concerned, however, that the white male predominance in Germany is a problem. “The big corporates have the money, we need them to start adopting a diverse attitude to the workforce. Startups and small businesses do this already but the wealth still resides in the white male intermediary.”
“Companies in the top quartile for racial and ethnic diversity are 35 percent more likely to have financial returns above their respective national industry medians.”
Henning Ravn from Berlin Partner said of the discussion, “Diversity is clearly a critical factor for the success of a city. It’s also clear that the Trump administration and the Brexit vote have mobilised a global young population in politics. Social media has made this group more connected than ever.
“So if London and Berlin want to retain their status as hubs of technology and creativity they will have to address some of the issues raised by the panel to keep growing, or face a millennial back lash.”
“In Berlin we offer free childcare that undoubtedly helps keep female entrepreneurs in the economy, we also have a more fostering culture for immigrants and LGBT, but this attitude must spread throughout Germany,” Ravn added. “In London the high cost of living is prohibitive to many young people and this is a factor that will hold the city back when there are more affordable options elsewhere.”