Berlin, or how innovation became an industry of its own
High energy costs and a changing global market are pushing German industry towards a difficult but necessary shift: away from manufacturing-led growth and towards higher-value services and technology. Britain knows the feeling. Germany’ s answer is to lean heavily on its strengths in innovation, and Berlin is where this transformation is already taking shape, built around digital and emerging technologies rather than the factory floor.
From clones to deeptech
Two decades ago, the city built its reputation as Europe’ s scrappy e-commerce capital, producing global names such as Zalando, HelloFresh and Delivery Hero along the way. That phase is long over, replaced by a deliberate pairing of start-up instincts with academic excellence. Four universities and more than 70 research institutes sit within a few kilometres of thousands of young companies, and the two worlds collaborate rather than operate in parallel. Eighteen of Germany’ s 38 unicorns are headquartered in Berlin, more than in any other German city by a wide margin. More than 500 AI start-ups operate here, including unicorns such as Parloa, n8n, Taktile and Contentful.
Fintech tells a similar story. According to a study by the Investitionsbank Berlin( IBB), the city was home to 189 fintech companies in 2025, more than Munich, Frankfurt, Hamburg and Cologne combined, which together account for 169. That concentration has made Berlin the undisputed national centre of the industry, with a depth of specialist talent, investors and infrastructure that smaller clusters struggle to match.
Beyond the software layer
What has changed more recently is the breadth of the ecosystem. Berlin is expanding into deeptech, where artificial intelligence is less the headline than the enabling layer powering breakthroughs in climate tech, mobility, healthcare, photonics, quantum technologies and New Space. The satellite sector provides a good example: several manufacturers now operate growing production facilities in the city, rather than focusing solely on software and mission control.
Proximity to government has also brought defence technology into the mix, through initiatives such as the Bundeswehr’ s Cyber Innovation Hub and a new generation of companies building hardware rather than pitch decks. STARK, Helsing and Agon are among the names with a footprint in the city, and all three also maintain a presence in the UK, a reminder that this is an industry increasingly organised around transatlantic and cross-Channel partnerships rather than purely national supply chains.
Talent without borders
Berlin is Germany’ s only genuine global city, and it shows in the workforce: 42 percent of employees at Berlin startups come from abroad, and English is the working language at roughly half of them. It is possible to rent a flat, see a doctor and run a company without much German, making the recruitment of international specialists considerably less burdensome than elsewhere in continental Europe. For companies used to London’ s international labour market, that is a familiar and welcome feature rather than a leap of faith.
For a London audience, there is also a more pragmatic argument. Berlin sits within the EU single market of 450 million consumers, with none of the customs paperwork that now complicates trade from Britain. At the same time, office space, salaries and living costs remain well below London levels, a difference that adds up quickly for any business scaling a team. International corporations, from Siemens and Mercedes-Benz to Tesla, Apple, Google and Microsoft, maintain innovation hubs here because the city’ s start-up and research ecosystem provides a strong platform for collaboration and growth, not merely cheaper office space.
Berlin Partner, the city’ s economic development agency, supports companies at every stage of establishing a presence in Berlin, from market assessment to office search and recruitment, free of charge. Details at invest-in. berlin.