Berlin Economy

The economy of Berlin has undergone a fundamental change. The previous bias towards industry and construction has been replaced with service industries.

Some 1.6 billion euros was allocated by the European Structural Fund in the six year funding period to 2006 and the same amount has allocated again to 2013.


Small and medium-size companies are key to Berlin’s economy. Exports, which grew by around 38 percent between 2000 and 2006, underscore the productivity of Berlin’s industry. Along with electrical engineering, food products, chemicals, mechanical engineering, and motor-vehicle manufacturing are some of Berlin’s traditionally strong sectors. In addition to construction and the skilled trades, which are usually organized in small businesses, trade and services also play a major role.

The founding of new businesses continues unabated in Berlin. The difference in the number of businesses registered and those de-registered shows that the number of start-ups continued to grow in 2007, with a net total of 11,000 new businesses for that year. The private service sector has generated more than 100,000 new jobs in the last ten years. Including the areas of trade, banking, and insurance, as well as transportation and communications, more than 50% of the people employed in Berlin work in the private service sector. In this sector the overall total comes to around 890,000 (83%) .

Fast-growing sectors are communications, life sciences, mobility and services with information and communication technologies, media and music, advertising and design, biotechnology and environmental services, transportation and medical engineering. Berlin is among the top five congress cities in the world and is home to Europe's biggest convention center in the form of the International Congress Centrum (ICC). It contributes to the rapidly increasing tourism sector encompassing 592 hotels with 90,700 beds and numbered 17.3 million overnight stays and 7.5 million hotel guests in 2007. Berlin has established itself as the third most visited city destination in the European Union. The figures indicate the first surplus in the history of the city state. Due to increasing growth rates and tax revenues, the Senate of Berlin calculates an increasing budget surplus in 2008 and 2009.
Some notable companies with their headquarters in Berlin are Axel Springer AG, Deutsche Bahn, Bombardier Transportation, Universal Music Germany and Vattenfall Europe.

In 2007 the federal state of Berlin had a budget surplus for the first time in its history. The surplus will be used to reduce Berlin’s existing debt (roughly €60 billion). Budget forecasts anticipate surpluses over the next few years as well, and the state’s existing debt is to be reduced by €1.8 billion by 2011.

Berlin’s financial situation is heavily influenced by high debt and correspondingly high interest payments. For years now, the Senate has been working to meet this challenge with a consistent budget consolidation course. As a result, in 2006, primary income (i.e. not including loans or the sale of assets) was able to cover primary spending (i.e. not including interest) for the first time since German reunification.

Berlin is one of Germany's largest banking centers, the world's leading conference center, the seat of Federal Government, and the largest university city in Germany (147,000 students) with three major universities. Half of the 1.6 million workers are in the service sector, and about 13 percent of the workforce is unemployed, but recent restructuring aims to lower this figure. Also, projects with the rest of the European Union, including monetary unification, have played an important role in stabilizing the Berlin economy.

Investment into ICT industries, a burgeoning tourist industry, the restoration as the capital of Germany and its role as one of Europes main cities are all good indicators.

As trade gateway to old Eastern Block countries and the continued investment into Berlin via European funding and projects, Berlins economy has stabilised and made steps forward. Whilst affected by the global downturn the future still looks quite promising.

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