Berlin is truly a 24/7 city, where a spirit of innovation, tolerance and levity roars with unapologetic abandon. Perpetually in flux, Berlin refuses to be pigeonholed, preferring to knit together a new identity from the yarn of its complex history. You can fairly feel the collision between past and future, what is possible and what is realistic, and the hopes and aspirations of people who’ve joined together from around the globe in one big experiment.
Economy on the Upswing
It's been a long road to recovery but Berlin is finally seeing slivers of sunlight on the horizon. Since 2005 its economic growth has consistently outpaced that of Germany as a whole, and the city is also leading the nation in job creation. Although still above the national average, unemployment dropped to 8.4% in 2017, the lowest since reunification in 1990.
Berlin's transformation from an industrial to a knowledge-based society is the cause. The growth of the digital economy especially has stimulated the job market. The city today attracts some of the world's brightest minds and invests heavily in such high-tech sectors as biotechnology, communication and environmental technologies and transport. In fact, Berlin is ranked among the EU's top three innovative regions. The creative and cultural fields are booming, too, and their financial impact, though less tangible, cannot be discounted.
Although visitor numbers have been affected by the demise of Air Berlin, tourism also continues to be a key force economically. In 2017 the city registered nearly 13 million visitors, accounting for a record 31 million overnight stays. And that's not even counting the roughly 100 million day trippers per year.
Still, the news is not all good. Berlin has the highest number of welfare recipients of any of the 17 German federal states. And although spending has been reined in, balancing the books remains tough with a debt legacy hovering around €60 billion.
Europe's Start-up Capital
Over the past decade, Berlin has become the breeding pool for continental Europe's start-up economy, attracting young global tech talent with its multicultural make-up, relative affordability, open-mindedness and high-level of English skills. Only bested by London, 'Silicon Allee' is fast turning into an innovation hub of global importance, especially in the fields of design, art, music and entrepreneurship. The city has been the launch pad for such companies as Zalando, SoundCloud, ResearchGate, GoEuro, Foodora and Clue. A key link is the Google-funded Factory, which seeks to stimulate dialogue between start-ups and established tech ventures. Almost half of start-ups are founded by neo-Berliners.
As the digital industry gains critical mass, it's becoming a driving force behind Berlin's economy, generating over €8 billion in revenue and employing over 60,000 people. There is no end in sight, especially once 'Berlin TXL: The Urban Tech Republic', a huge new start-up campus on the grounds of Tegel Airport, takes flight. Of course, that won't happen until the new Berlin Brandenburg Airport becomes operational. But that's another story…
Population Growth & Housing Shortages
Berlin's population is growing rapidly, fuelled by a slight increase in the birth rate but mostly by migration from other European countries, asylum seekers and global expats (especially from the US, Israel and Australia). Current estimates predict a population of about four million by 2030, about 10% more than today.
The acute housing shortage is shaping up to be a major problem. Affordable housing in particular remains in short supply as investors, most of them from abroad, snap up precious real estate to build top-flight units or convert existing housing into luxury condominiums. A grassroots anti-gentrification movement is gaining traction with at least 15,000 people protesting in the streets in May 2018. Still, there's no denying that, although not yet at London or New York levels, Berlin's famously low rents are becoming a thing of the past.
Multiculturalism vs Populism
While Berlin's global community is one of its greatest assets, social and economic integration remain challenges. In 2015 and 2016, upwards of 100,000 refugees arrived, mostly from war-torn Syria, Iraq and Afghanistan, overwhelming the local bureaucracy and delaying integration efforts. By 2018, the river of newcomers had slowed to a trickle and many private groups have stepped in to boost the government's integration initiatives.
As of early 2018, about 711,000 non-German nationals from around 200 countries lived in Berlin. Turks continue to constitute the largest community, a legacy of the worker migration of the 1960s and '70s to West Berlin. In East Berlin, contract labour came in smaller numbers from Vietnam, Cuba and Poland. Since reunification, the city has absorbed about 100,000 people from the former Soviet republics. In recent years the global fiscal crisis and high youth unemployment have resulted in a wave of new arrivals from southern Europe, especially Romania and Bulgaria.
The arrival of migrants and their perceived drain on the economy and society has given rise to new populist and anti-migration movements like Pegida ('Patriotic Europeans Against the Islamisation of the West') and parties such as AfD (Alternative für Deutschland, Alternative for Germany). At least for now these movements have gained only moderate support in Berlin, compared to some other parts of Germany. In fact, an AfD demonstration in May 2018 lured 5000 people and 25,000 counter-protesters.