Looking for a new London? Find it in Berlin

It is a place that has long housed our artists and musicians and more recently, our baristas, but as Britain hobbles towards Brexit, young Australian professionals are also looking east.

Berlin, with its comparatively low cost of living, easy access to communal office space and thriving cultural scene, has replaced London as the dominant entrepreneurial hub of Europe.

A 2015 report from start-up research firm Compass valued the local start-up industry at up to $40 billion and found 49 per cent of its workforce was foreign. Now, the Australian government is tapping into its potential, keen to turn around a trade relationship that has historically favoured the German side of the alliance.

In one of Berlin’s bar-saturated districts the federal government has launched a new portal for Australians to enter the German economy. Here, between blocks of graffiti-plastered units where Nick Cave once scribbled The Mercy Seat with the Bad Seeds, today’s chino-wearing 20-somethings are drawing mind-maps of what they hope is the next Airbnb.

Betahaus, the home of Australia’s latest entrepreneurial hub, rises up next to a community garden built out of wooden pallets in Kreuzberg in Berlin’s west. From November, groups of Australian entrepreneurs will work here alongside companies that range from those that operate on a single-desk to ones as large as Microsoft.

Launched by Australia’s freshly minted ambassador to Germany, Lynette Wood, the hub, known as a Landing Pad, is one of the key elements in the plan to turn around what she has described as an “underdone trade relationship”.

“I think particularly with the questions around Brexit, Germany has been seen as sure bet,” she tells Fairfax Media in Berlin. “It has had a culture that is just right for the innovation and out-of-the box thinking that you need for a start-up. Cost is much lower; starting out with a new idea, the last thing you want is high rents and a high-cost living.”

It is a culture that has helped launch start-ups such as Berlin-based Kiron into a fully fledged multinational operation. The company, which responded to the European refugee crisis through innovation, now runs online university courses for refugees in camps around Europe and the world, including courses in English for 300 Afghanis in Indonesia.

Founder Markus Kressler says both the city and companies have profited from its development as an entrepreneurial hub. “It is a mutual relationship, the entrepreneurial conditions and the infrastructure is really good from an economic but also from the societal, cultural and international perspective,” he says.

Inside Betahaus, Germans, Poles and Americans take calls in English inside a phone-booth that looks like it has been ripped out of 1980s East Germany. It’s BYO smartphone, but it offers a skerrick of privacy in the recycled-wood office space that is headquarters for more than 40 companies.

Many are looking to attract the attention of one of the big fish, the Microsofts of the world, who have sent in teams to work with bare bones operations in the hope of fostering some of their own innovation.

“This is Berlin, it’s raw and alternative,” says Michael Bingel, who will co-ordinate the Landing Pad in Berlin. “Corporates learn that they can’t innovate by themselves, they need to look outside and this is why they need incubators with start-ups to engage with what they are doing; they get them and give them a little bit of money, to try early to bind them to their ecosystem.”

Jock Gordon, an Australian entrepreneur who sold MenuPad, an iPad-based menu system for restaurants three years ago, emigrated to Berlin when he spotted the opportunity in the market. He’s now running the growing Aussie.EU community in Berlin, a group that connects the Australian entrepreneurial community with Germans to understand things like differences in German tax law.

“There are Australians all over the place,” he says. “They are more into the business than going to the pub, and they are quickly scaling up because the talent [developers] are so cheap. You can build up a multinational team that speaks multiple languages at a fraction of the cost. Quickly executing and getting businesses off the ground, that is something I don’t see in Sydney as much.

“We’ve had everything from CEOs of large listed companies to new start-ups that want help entering the European market.”

Federal Trade Minister Steve Ciobo says the Berlin Landing Pad, the fifth the Australian government has established after San Francisco, Shanghai, Singapore and Tel Aviv as part of an $11 million investment, presented a great opportunity for Australian interests in Europe. “The government has a very strong focus on driving Australian innovation,” he says. “Around four in every five jobs are built around a service economy; these landing pads are one strand designed to boost Australia’s success abroad.”

Article originally posted on Sydney Morning Herald, 26 November 2016.

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