Musk plugs Tesla into Berlin’s digital dreams
Entrepreneur’s plans a show of faith in hip city’s burgeoning tech hub status
It lacked the fanfare that Elon Musk usually brings to such occasions. Standing awkwardly on stage in Berlin to receive the Golden Steering Wheel award from a German automotive magazine, the disruptive tech entrepreneur almost casually announced that Tesla was coming to town. The electric vehicle company would be setting up a plant on the fringes of the German capital to manufacture vehicles and associated technologies.
While Musk’s delivery may have been low-key — bar endorsing “Berlin Rocks!” — the reception was dramatic. Loud gasps at the awards ceremony; anguish and awe across the German automotive sector and media.
While much of the focus was on what this meant for Germany’s showcase industry, Tesla’s move delivered another message: a statement of faith in the country’s capital and its growing tech sector.
Berlin’s appeal as a city drenched in history, with a taste for living life a bit differently is well-rehearsed. Less so its economics. Put this another way: the German capital has a welldefined identity. It has just struggled to work out how to pay for it. Its historic position as a major European industrial and services centre took a battering over the course of a century defined by war and cold war division.
Developing a new economic narrative was one of the challenges of the post-unification period. Tech seemed a good bet. As well as giving Berlin a hook into the future, technological innovation is also wired into a city that spawned the electrotechnical likes of Siemens and AEG, and was birthplace of the world’s first programmable computer. The city’s research base, plus a certain reputation for cool and creativity, chimes with a sector that has made the journey from lab- (or garage-) based geekdom to broader social appeal.
So the squats or old industrial spaces where in the 1990s we once drank and danced the morning away, started humming to a new sound — key strokes. A cousin who swapped the west coast of California for the charms of Berlin winters and a startup nestled in the furthest back yard of an old tenement in the east of the city, is in no doubt that it was the right call lifestyle-wise: nice people, a good buzz, less money-oriented, civilised pace and cheap rents.
Berlin’s pretensions to be a “Weltstadt”, a world city, were wellserved by this influx of international talent. But the city could also be an incubator for the nation: as a country, Germany is forever fretting about missing out on the industries that will define the century ahead.
There have been some eyecatching new ventures — Rocket Internet, anyone? — alongside a lot of ambitious talk that failed to make it out of the cafe. This fuelled snarky criticism about a “slacker” approach to business development. Peter Thiel, like Musk a founder of the PayPal payments system, last year waspishly classed Berlin as “a city people move to in their twenties to retire”. Ouch.
Flat-footed bureaucracy and regulation — Musk may yet get to appreciate the delights of local labour and planning laws — and inept municipal politics have also not helped. Added to that, the Berlin tech sector has struggled to access venture capital, though that is now apparently improving. Meanwhile, other European cities — London, Lisbon, Stockholm, even Paris, to name a few — are challenging Berlin in the tech stakes. But in reality Berlin has achieved something over the past decade or so. Travis Todd, a US web designer who now heads Silicon Allee, a platform for international start-ups, reflects on how the scene has evolved in the decade or so he has worked in the city. What was once “lots of crazy people doing social apps” has matured into a developed sector. The successes were initially often in typically Berlin “lifestyle” areas such as fashion (Zalando), music (SoundCloud), literature (Blinkist), travel (Get Your Guide) or food (Delivery Hero). Now the range of activity is broader, from banking (N26) to agriculture. “Everything is here,” says Todd.
Berlin, he says, has established itself as the digital capital of Germany. How much of a player it will be across Europe, “remains to be seen”, he adds. The proposed Musk venture could influence that. Now all he has to do is build it. The Financial Times