'Google go home': the Berlin neighbourhood fighting off a tech giant
theguardian.com
theguardian.com
Berlin kinda, from what I understand, enjoyed it's special culture much because it wasn't an industrial city and lacked an large international airport, but cheap rent, international vibe and fun hipster values seems like the perfect void for tech to move into now that rents and prices in the usual "big cities" have gone through the roof. I can also imagine cities like Amsterdam and Berlin getting some Brexit escapees.
Mark my words, Berlin will be Europe's Silicon Valley within a few years.
Things that need to happen before this :
1. Salaries need to grow faster. Rent is really high for the new comers specialists.
2. Companies need to increase the salary gap between good and bad workers. Right now you are not able to negotiate more than 10% on top of the "average" salary.
3. Germany needs to fix the privileges of employees having options / shares of the company. With the current legislation / founders attitude is quite boring and useless.
Can it be because venture capital hasn't come to Berlin/Germany in a big way yet? Typically German companies seems more aimed at the German market rather than an international one, which maybe doesn't fuel a bubble as quickly.
Unfortunately the progressive taxation [1] is quite complicated and makes it impossible to increase your life-style with just a salary bump.
I guess that's one of the reasons Berlin is still considered as temporary place to work, before you find "something better".
1 : http://www.drinchev.com/blog/germany-freelancing-and-taxes/
Berlin software engineer salaries are seriously worse then any where in america. I’ve seen desktop IT support in the US MidWest pay more than developers in Berlin.
Hard to convince me to move internationally and write code. I can just move home, write zero code, and spend all day telling people to try, “turning it off and on again”. Cashing identical value checks.
“Free” education costs roughly €45k per year. In the US, 2-3 weeks of vacation is normal (for tech jobs,) so let’s say in Germany, you get an additional week. Let’s now say that US workers work an extra 200 hours per year.
So “free” education plus an additional week off plus 200 annual hours of less work. Costing €45k per year.
In a work week, let’s say in Germany it’s 38 hours. So that week of extra vacation, plus the 200 extra annual hours, we have 238 extra hours of work. Not counting “free” university that means that extra time off costs you €189 per hour. Let’s say that a typical US state university costs €60k for 4 years. That represents about 315 hours of work (at the €189 per hour rate.) Which means that in just 2 years or less, the salary differential would pay for your university education. After that expense, then, for the rest of your career, you are essentially paying €189 per hour of extra time you get as a bonus for working in Germany.
Taxes are excluded from this calculation, but while they are higher in Germany, you get more “stuff,” so it balances out on the tax side reasonably well. However, something that is relevant is that the cost of consumer goods is higher in Germany, so your disposable income is going to be less than the US.
I am not saying Germany is “bad” — a great place to live, but in pure economic terms, you are definitely worse off by comparison to a similar job in the US.
Are you expected to take those 2-3 weeks? Is your time away actually respected? I'm sure for some it is, but I don't believe that to be universal.
>a great place to live, but in pure economic terms, you are definitely worse off by comparison to a similar job in the US.
Economic comparisons like this hardly capture all that accounts for the differences between these two scenarios. Work culture, quality of life, personal fulfillment, etc. This purely monetary estimation can be informative, but, it is only part of the story.
I would say you could make, before taxes, $100k per year in San Francisco with solid 2-3 years of experience, whereas in Berlin it’s around €60k average. On top of that if you’re talking about the whole of the US it’s wildly different between Cleveland and San Francisco, so your comparison isn’t really fair. 100k in SF is not great, 100k in Cleveland is. So your math doesn’t really work here, unless you compare directly two cities and also compare taxes.
I still agree that it is financially better to live in the US if you work as senior at Google/Amazon/Facebook scale, because the difference becomes huge. I still prefer Berlin due to live-style issues (50/60 hour work weeks, car life, commutes, no clubbing, overall capitalistic mentality.)
Based on my interaction with "top" recruiters from Germany, I figured that I can compare: Senior SWE salary in the south with a CTO/Head-of salary in Berlin.
One of the reasons there are so many startups in Berlin is because if you fail, you are taken care of--you won't lose your house, or your health insurance, or have to leave. Another reason is that it's very straightforward to get work permits for engineers. Try hiring someone from Estonia in the US Midwest...
More likely you will get another job at a comparable salary and keep your house and your healthcare.
It was always destined to go towards its past glory once Germany reunited. The only question was: "how long will it take for that to happen?".
Source: am from Leipzig.
It is however very central for Europe, and is fairly well placed for growth in the eastern EU.
1. It's not just hipsters this is affecting
2. This is not necessarily a move towards "glory". Most Berliners value the arts and cultural scene that exists in part due to low rents/cost of living and readily available performance/exhibition spaces. To see Berlin turned into another Silicon Valley would for most of us here be a major downgrade
Based on the geostrategic importance of Berlin (capital of Germany, the biggest city in Germany, central position in the EU, etc.) it should be an Alpha+ city, if not an Alpha++ city. Right now it's not due to a historical accident that is being "fixed": the separation into West and East.
According to that study from 2004 (ancient, I agree), Berlin was classified as Beta. For comparison, they classified Bucharest as Beta+. I'm Romanian, but there's no way that makes any sense unless Berlin is "underperforming".
So if you're a Berliner, brace yourself! Want it or not, Berlin will move up in the world to its rightful place and prices will go up accordingly.
The fact that "Luxembourg" - a glorified village is an "Alpha" city says more about it's significance in the European Union than any amenities/industry/jobs/lifestyle that exist (or rather don't exist) in the city.
I thought Germany has some form of protection by law so rent and property market don't get to hike the prices to whatever they want. So while the world 's property market is on fire by QE, Berlin hasn't moved a needle at all.
So why has rent risen so much?
In Berlin and many other cities there's also rent stabilization ("Mietpreisbremse") for new tenants: new leases on old properties may not exceed the maximum of 110% of the "ortsübliche Vergleichsmiete" and the previous tenant's rent. This falls away if the property is substantially renovated.
Renovations can stop both of these from working: in the former case by increasing the value of the apartment so that the set of "comparable properties" is much more expensive, possibly forcing the current tenant out so a new, wealthier tenant can be found to negotiate a new contract; in the second case, the control falls away completely if the value of renovations in the last five (?) years is at least a third of the total value.
The Mietpreisbremse is widely ignored: advertised rents exceed the limit for more often than not, and the landlords choose tenants they think are least likely to sue over it. The worst case for the landlord is that they have to pay back the difference from the point where the tenant complained; the best case is that the Federal Constitutional Court invalidates the law (which is fairly new and not yet judicially tested).
The fact rent protection is being phased out makes me really sad, speculation will become even more rife (I can understand that extreme rent protection like above may not be workable but something in between is needed imo).
It might happen- but it still wont have an airport.
https://en.wikipedia.org/wiki/Berlin_Tegel_Airport
https://en.wikipedia.org/wiki/Berlin_Sch%C3%B6nefeld_Airport
Although they are planned to be closed when the third one opens(this one doesn't have a lack of issues though):
Tegel+Schoenefeld have combined ~30M passengers per year. FRA has ~65M, and LHR has ~80M.
Number of intercontinental flights from Berlin is just super low s.t. most business travelers fly do a stopover in FRA.
Berlin has an international airport.
Berlin is certainly underserved given its size but that's just the Frankfurt effect (an airport with >60m passengers p.a. for a city <1m population).
That's assuming you don't miss your connection and lose an hour or two getting rebooked, or dealing with lost luggage.
Another interesting thing is that there are more and more ways to spend more and more of your money in Berlin. Consumerism is definitely on the rise, which IMO is bad news for people not making much money.
I wouldn't say Berlin lacks an international airport, I would say instead that the corruption/incompetence nexus managed to spare us the monstrosity of BER[1] and we can continue to use the lovely old urban airport at Tegel[2], though granted there are a lot of stopovers depending on where you're going.
Anyway I really doubt Berlin will be anything like Silicon Valley, well, ever. You could start with how radically differently the local tech scene views labor, but that's just the tip of the iceberg. I would love to be wrong though.
[edit: formatting]
[0]: https://www.immobilienscout24.de
[1]: https://en.wikipedia.org/wiki/Berlin_Brandenburg_Airport
Once you get above a certain level, especially working for bigger companies, it levels out, and you won't be compensated in cash as much as in SV but you'll get all the other things that come with a reasonably well-run social democracy.
But in SV, say, nobody who's any good would work for the Brothers Samwer. In Berlin lots and lots of people need the job.
I could be wrong about this of course, I'm an old fart with a stable gig and all my data are anecdata.
For the lack of options out of Tegel you can pretty much thank Lufthansa.
A millionaire in a party state is one head of states headache away from loosing it. And they know it.
Large corporations don't want their headquarters in Berlin for tax reasons: There's a reason they're all moving to Switzerland.
The tech scene in Europe is very scattered.
https://www.reuters.com/article/us-nordics-housing/both-immi...
I was there ~15 years ago and it was bad then. It's remarkable that it's even worse now.
Stockholm is a fairly small city too. A million or so roughly.
There is a rather ill-informed effort to attempt to compare it to, for example, what is happening in the Bay Area, which is absurd. In the Bay Area, any place to live within walking distance of public transit is so expensive that only tech workers can afford it, extending far beyond the San Francisco/Oakland city limits. In Berlin, if you don't mind living in one of the less "cool" neighborhoods, or gasp outside the Ringbahn, you will be fine.
I think the issue is that two decades ago, rents in Berlin were absurdly cheap for a number of reasons related to the DDR, and now things are starting to normalize a bit so people are complaining.
Here is an example of why the Bay Area is in a crisis: https://abcnews.go.com/US/san-francisco-resident-fights-sudd...
A San Francisco man had his rent increased from $1800 a month to $8000 a month. True, it is one of the more extreme examples, but this is what I would call a crisis. Can you show me examples like this from Berlin?
In any case that doesn't really help Berlin if it takes, say, five years for its housing market to catch up to its European neighbors.
If it's cheap industrial land alone that made Silicon Valley how did Texas, Nevada, The Midwest and other places miss out on a tech business boom?
But also remember that then and now we're only talking about very specific areas of Neuköln which are super hip, it's actually a huge district and most of it is still "not cool". The bits close to Tempelhofer Feld and Kreuzberg have been gentrifying for many years.
Granted there are few places in the world that are exactly the same as they were 20 or 30 years ago. But then again, certain places -- like San Francisco New York, London, and many, many other cities -- have arguably "tipped" to an extent such that, while the postcard views are pretty much the same -- the overall vibe and intensity is but a glimmer of what it once was.
And sadly, Berlin seems to be one of those places.
Frankly I kind of bought it. I'm going to visit this summer.
The advantage partially comes from the fact that developers are paid significantly above average wages, i.e. the average salary for most people is low (like 400 to 600 euros a month pre tax) yet developers take home 1,500 / 2,000 / 4,000 euros per month.
Cost of living + taxes are low as well.
Go visit it anyway, that's, of course, just my impression, but even living in Stockholm (a place I consider a bit boring for my standards of big city life) I found Tallinn very very dull.
Having lived several years in London, and experienced plenty more cities including NYC and San Francisco I’m more than ready for boring. Indeed, this is why my current home town is Stockholm because I kind of agree with you – it’s a little bit boring and very safe, and I love it!
- don't know about schools, but kindergardens are a privilege you'll be fighting for
- it's fairly safe, obviously exercise common sense
- the metro is great, but it only covers part of the city, the rest of public transit ranges from ok to abysmal, but if you pay for a year, it's cheap as hell too. But I've certainly had no need for a car, so it's doable if inconvenient at times.
- cycling infrastructure is horrible, and there isn't enough of it, but it's there at least and I don't think it's stopped anyone who wants to cycle
- Parks are fine, plus there's a mountain here, so if you need green, you got it.
Other factors you might want to consider:
- air quality and traffic are horrible, especially in winter
- night life is fine
- you can find good food, and you can find cheap food, and if you look, you can find good cheap food.
- gov healthcare is bad, but if you're in tech, your employer might give you additional private insurance, so it's not something I've had to worry about.
- taxes are low
- alcohol is cheap and there are no ridiculous "no sale of alcohol on Sundays or after 10pm" rules some western countries seem to like :).
- tech scene is active so if you want to hang around with techies, you won't be bored
- cheap marginal space is very much available if you don't want/need a glossy hip office in a nice location.
Personally I love it and it's main advantage is that although it's much more expensive than the rest of the country, it's still cheap as hell. I don't make much but I save a lot, I could probably afford to work only every other year if I was frugal enough. I did consider moving for the north-west a while ago, but I did the math and...yeah, the up in purchasing power would be there, but not enough to justify leaving. I still might do it just for the novelty and experience at some point.
My point was however more targeted on the "go back home" guys. I (German) know several guys from Romania, Spain .. who don't plan to stay in Germany forever and just want to work here for a few years, earn good money (well compared to their country) and then return home.
This is however not possible if your home country has a higher cost of living.
You have better schools in the US if you live in the right neighborhood. Also, getting called "pig eater" is likely not tolerated in the US.
"safer cities" Europe is trying hard to catch up.
"better public transport" The only good thing. Yet, nothing beats public transport in NYC.
"more and better maintained parks" Not sure about this.
"better local produce" If you can afford to buy at Whole Paycheck, you get everything.
"There are a lot of potential reasons for a decision like that." The bottom line is: if you have money, life is better in the states. If you are poor, go to Germany.
I hope that whatever emerges in Europe is nothing but unattractive to Americans. The idea of Americans, particularly Bay Area techies who've already ruined a number of cities in that area, up and moving to Europe is utterly horrendous, as a European.
Doubt that any East European city will be close to a "European Silicon Valley" because of many reasons. Language. Xenophobia. Capital. Location. Culture.
Bucharest comes to mind but because of other reasons. Quite big and Romania has a higher GDP growth than China. But still. no.
Lisbon is a great place. I speak the language. Real Estate is already expensive as f.. if you want something decent. Great place to live or retire. But a new Silicon Valley? No.
People in Romania seem to be very friendly. GDP growth higher than China but not sure I see a basis for a silicon valley there. I don't know Bulgaria.
The condescending tone is uncalled for. As for the advice, I don't really need to travel as I've lived in Poland for my whole life (minus a few years spent abroad / in the UK). I've also been to several countries in the region, and yes I have indeed brought quite a few "foreign looking" friends with me, including an Italian girlfriend.
I'm sorry if something unpleasant happened to you on such a trip - assuming you're speaking from first-hand experience, rather than just propagating negative stereotypes - but it still wouldn't entitle such sweeping generalizations.
Try to bring an Indian one. Or Chinese.
"I'm sorry if something unpleasant happened to you"
It is less about me. I have been there three times and I can take a lot. On my last trip, I spare you my experiences, I stayed one day in the hotel to work on my computer and my GF came back crying and told me she wants to leave and never come back. On the Train to Budapest I met an American Lady. She said, she would not come back to Prague, people are "harsh".
"but it still wouldn't entitle such sweeping generalizations."
I saw once a statistic about foreigners (can't find it anymore). They were hated the most in the Czech republic, the most welcoming country was Uganda. BTW, I have lined up a trip to Uganda, there is a great music festival every summer.
Make you own experiences. It is not a terrible place, but why go to Prague if you can go to Budapest? Total different bunch already.
You should have said that from the start. This definitely rules out Prague as the next Silicon Valley.
They got ripped off after the cold war/ the wall fell - most of the countrys assets (land/buildings) beeing sold of to western investors for cheap.
Ironically that is what makes them so good at tech now- if all you got is your head and your skils and no investments to sit on, that blad will be sharp.
Having said that, there is reason to think that the region in question will become Europe's most dynamic and technologically powerful, in particular Poland, because of a number of coinciding factors, such as entrepreneurial spirit lacking in Germany and west of it, geopolitical necessity and historical precedent.
The geopolitical angle is quite interesting. Poland and the other countries sandwiched between Germany and Russia are situated on a geopolitical fault line that demands that these countries cooperate out of mutual interest. Economic strength becomes one pillar in maintaining not just a materially comfortable existence but a matter of existential importance and of independence. That's a pretty strong motivator given the history of the region. On top of that, the United States has a geopolitical interest in the region's strength. We know from analogous cases that American interest of this kind has usually contributed positively to regional and thus economic strength. And from recent developments vis-a-vis the Three Seas Initiative, we are witnessing a formal recognition of the necessity of regional strength by the countries in that region. In fact, the recent brouhaha in the European Commission over Poland is, when interpreted synoptically, a telltale sign of the country's rising importance.
It went „poor but sexy”. The city is still poor but now got wrinkles and gray hairs here and there.
Doubt it. Lack of professional attitude. Disastrous politicians. 3rd tier universities. Lack of capital. Large underclass, big welfare spending.
It is very hard to set up a "silicon valley". The silicon valley had and has some very unique points, including military origins, if I remember right. Germany still has a strong and broad industry, which is lacking in most Eastern and Western European Economies. This is an advantage (try to do a non-software technology start-up in a country that does not have the suppliers and partners, then you know). In the end it is extremely unlikely that EUrope will achieve something similar than the Silicon valley.
Yes, Berlin once was a scientific, cultural, industrial and technological powerhouse. These times won't come back.
The more interesting question would be, can China manage to create a new silicon valley? I have my doubts.
I don't know what the comparable figures in Berlin are, but in Silicon Valley, about 11% live in poverty.
"About 11.3 percent of Bay Area residents are living at or below the poverty level, according to the report, “Poverty in the Bay Area,” that was released by the Joint Venture Silicon Valley Institute for Regional Studies. The data reflects levels reached in 2013, the most recent year for which these statistics are available."
https://www.mercurynews.com/2015/04/01/poverty-rates-near-re...
IMO computer science education is crap everywhere in Germany - it's either mathematics or latest hype topic with no "working technology" in the middle. Professors say informatics alumni will design algorithms, programming is for the plebs, or some such. Where do I even start?
There isn't a single respected programming language from Germany. We have nothing like OCaml, or Python, or INRIA or EPFL or ETH Zürich for that matter.
I think it is logically not profound to speak for whole Germany.
How do you know that TUM is not good enough? Probably you are referring to its popularity abroad? Well its definitely worse than that of Stanford, Harvard, MIT, Caltech, etc. But heck, we don't have Hollywood to constantly make plugs in blockbuster movies to boost worldwide opinion.
From the examples he mentions, I know automatically (without searching for it) for example that Scala originated at EPFL, that ETHZ (& EPFL to a lesser extent) produce some of the most advanced things related to drones, that OCaml originated in France and is pushed by INRIA, etc... But there is nothing coming immediately to mind about TUM
If Europe doesn’t pass more startups-killing laws, sure.
Reminds me of this classic: https://www.youtube.com/watch?v=e22vY4CWpEI
But even back then: a single company owned the building, and kicked everyone out so they could renovate and get their gentrification bonus. To help motivate the older residents they started the exceptionally noisy renovation work at 6am every day.
In that sense they're in the same category as your landlords. Economic crime favoring the rich.
But what do I know, I'm not even in Germany. You should go to the protest and ask them.
> I think Google were surprised that they came up against opposition,” says Stefan Klein, a local activist with the GloReiche neighbourhood group at one of their twice-weekly open sessions.
So, one activist thinks that Google is surprised (which sounds quite naive IMHO).
Then later in the article:
> A Google spokesman in Berlin says that the company has spoken to residents about their concerns and is incorporating their feedback into its plans. “We live in Berlin ourselves, we understand the concerns of neighbours about gentrification and know how Kreuzberg has been developing in recent years.”
Perhaps that is what it is on a philosophical level, a new class is being born and asserts itself and creates its own living space and gentrification is the tool that makes this happened (global tech companies are just another "innocent" manifestation of this). It segregates them and us and just like all former classes also preferred to live segregated and monocultural.
There is now a website even.
Also it's amusing how the article struggles with "Umspannwerk"
At least it's my perspective that these sorts of neighbourhood changes are impossible to prevent. Does anyone know of any examples otherwise?
Kreuzberg is...special.
It would be very interesting to see if there were many, or even any more people than in that photo at the protest.
When I was at Uni I went to some protests that had ~30 people at them. Then the photo and even a bit of clever TV footage made it seem like those few people were at the centre of a much larger protest.
Big companies would give the market some incentive to raise the wages, which I know is at first bad for small startups but also attracts so much talent that it will balance out at some point (I hope).
I guess this is part of the Berlin culture, being innovative and free minded but also being completely against any change. Only 10 waking minutes away from the future Google campus there is this big fight about reworking the riverside of the Landwehrkanal which should make it accessible for Wheelchairs and baby strollers as well as bikes but people are protesting, living in one of the best appartments with still cheap rent because of their old contracts. Before that there was this even bigger fight about a small part of the old Tempelhof airport area. The city planned to build houses and office space there. I can't imagine any other city (with a housing crisis) where people would oppose to this. The fear was that a nature reservation area would suffer which according to plan would have been not be the case.
Probably it's a matter of view points, there are the new economy workers like myself waiting for companies to settle in Berlin (not so many there because of the cities history) and then there is the other side with people in really low paying jobs that fear exclusion, totally valid. I don't have numbers but I could imagine that Berlin as quite a bit discrepancy between low and high income households with quite many on the lower end because it has so few big industries.
Cheap Berlin only exists in some parts and mainly myths. Friends of mine pay the same rent in Munich for comparable apartments while going out can be cheaper in Berlin but only if you know where to go, the beer price is mostly the same, food depends. The wages are much lower in Berlin, for developers it's at junior entry at around 10.000€ per year less.
"Ils sont fous ces Goths"