In 2021, can Berlin or Paris unseat London as the world’s Startup capital?

The European startup scene is thriving. During the Covid-19 pandemic, the creativity and flexibility of entrepreneurs has been vital to finding solutions to societal problems. Many innovations have come to market quickly and will continue to have an impact far beyond the crisis.

In 2021, can Berlin or Paris unseat London as the world's Startup capital?
Photo: Getty Images

So, which cities are helping the stars of the startup world to shine brightest? The Local has partnered with ESCP Business School, which has six campuses across Europe (in London, Paris, Berlin, Madrid, Turin, and Warsaw) and its very own startup incubator, to find out. If you know any would-be entrepreneurs with an international mindset, this guide can help them understand the European startup landscape.

Find out more about ESCP Business School and how it develops the innovators of tomorrow

London: still the leading light

The UK’s capital city remains Europe’s top startup ecosystem, both for the number of startups and the number and size of funding rounds.

London is home to several fintech giants that have shaken up financial services, including Revolut and Wise (the new name for TransferWise).

But it also offers impressive success stories in other areas. Take Karma Kitchen, for instance. It wanted to raise £3 million in funding to open new sites around Europe – and ended up with £252 million.

London is also home to one of the ESCP campuses, where students can study its unique Bachelor in Management (BSc) programme (studying in three countries in three years).

Founded by entrepreneurs in 1819, ESCP has a long history of preparing students for the business world, including the challenges of running your own company.

Will London continue to lead in its post-Brexit future? Nobody can yet be sure. But one thing’s for sure: there’s no shortage of pretenders to the crown.

Photo: Getty Images

Paris: fintech, femmes … c’est fantastique! 

Not everyone associates Paris with startup culture. But if you want to show off your up-to-date business knowledge, you probably should. The French capital has seen impressive growth in funding over recent years.  

Strong government backing has included the introduction of a free, fast-track tech visa to make it easier to bring in foreign talent. Paris’s annual Viva Technology conference has also attracted major speakers such as Facebook founder Mark Zuckerberg. 

The city is especially strong today in fintech. Indeed, a French junior minister described Brexit as “a huge opportunity” for Paris to compete for the title of European fintech capital. 

Tech startups are not blessed with the best reputation for diversity. But Femmes Business Angels in Paris is making a difference, with around 150 women personally investing in and supporting early startups with high potential.

The Blue Factory is a Paris-based startup incubator, launched by a group of ESCP graduates in the early 2000s. It helps students and alumni of the school to develop projects in many fields, including education, employment, food, and fashion. Support programmes cover everything from testing initial ideation to seeding – and then scaling to expand internationally. 

Students on ESCP’s Bachelor in Management (BSc) have the opportunity to gain the kind of skills and experience that are vital in the startup world. For example, they get to work on social impact projects that make real contributions to society, as well as training with online simulations that recreate the complexity of business decision-making.

Know someone with entrepreneurial potential? Find out more about ESCP’s Bachelor in Management (BSc) and download the brochure

Berlin: a big attraction for global talent 

Germany’s capital has earned a reputation as one of the world’s most vibrant and energetic startup centres. The city’s culture, history and sheer hipness have made it a big attraction for international talent who want to change the world through their ideas. 

There was, at least at one point, a startup being founded in Berlin every 20 minutes. Coworking spaces and hubs like Betahaus and Factory epitomise the creative atmosphere of the city, helping innovators to make new connections and drive projects forward.

E-scooters are now a key part of sustainable urban transport systems in many European cities. Berlin-based TIER only launched in 2018 but already has 60,000 scooters across 80 cities in ten countries. The firm is not only the market leader in the competitive ‘micro-mobility’ sector but is also already profitable – far faster than many big name startups manageEurope-wide entrepreneurial hotspots

The Spanish startup scene was slow to develop. But Madrid is making up for lost time and is one of only seven cities globally to have a Google startup campus. It’s also home to a number of unicorn companies – valued at more than $1 billion – such as ride-hailing app Cabify and rental homes company Spotahome.

The Italian tech ecosystem has also developed in recent years, especially in northern Italy. More international investors have begun to take an interest in the region as it has become a more favourable location for entrepreneurs.

In the north, Stockholm is home to a thriving tech scene that has helped Sweden rank first globally for capital invested in startups per capita. The city is home to the Action Against Corona initiative that supports startups that can help fight the pandemic or its social effects.

Eastern Europe also has plenty of startup talent. While funding is not always easy to find, Warsaw is home to Experior Venture Fund – Europe’s first venture capital (VC) fund set up and managed by women. Cofounder Kinga Stanislawska also established European Women in VC to help increase female representation across the continent.

Many of tomorrow’s entrepreneurs can be found today studying business programmes such as ESCP’s Bachelor in Management (BSc). ESCP’s student societies include VConnect, which aims to create a bridge between innovative students and the VC ecosystem, and ESCP Women in Leadership, which focuses on inclusivity and gender equality. 

Know an entrepreneur of tomorrow? Find out more about studying at ESCP Business School – and download the brochure for the Bachelor in Management (BSc).


Germany ranked fourth best country in the world

That's according to the annual 2019 US News & World Report Best Countries rankings, which handed it high points for entrepreneurship, power and quality of life.

Germany ranked fourth best country in the world
The Berlin skyline in August 2018. Many entrepreneurs and brands are located in the capital. Photo: DPA

Its neighbour to the south, Switzerland, takes the top seat for the third straight year and is followed by Japan and Canada.

This year, Japan jumped from fifth to second, thereby pushing Germany down a slot from 2018.

More than 20,000 individuals in 36 countries identified as informed elites, business leaders, and members of the public were surveyed online by US News and World Report in collaboration with BAV Group and the Wharton School at the University of Pennsylvania.

Survey participants were asked to assess a set of attributes to 80 countries. Based on the responses, those traits were further grouped into nine sub-categories such as quality of life and entrepreneurship.

Germany no longer leads in entrepreneurship

For the past three years, Germany headed the entrepreneurship category, but fell to the number two position in 2019, with Japan taking the number one seat.

A country's standing in entrepreneurship was, according to US News and World Report, assessed looking at factors such as its connection to the world, educated population, innovation, ease of access to capital and skilled labour force.

These standings come on the heels of Bloomberg´s Innovation Index released Monday. Germany´s standing rose to second place, but was a near equal with number one slot South Korea in total score.

For its index, Bloomberg assesses research and development spending, manufacturing capability and concentration of high-tech public companies.

Germany still respected for power and quality of life

Behind the United States, Russia, and China, Germany maintained its number four rank in the power subcategory of the US News and World Report rankings.

Berlin's comfortable top five position in power is likely due to the country's economic strength and international aid. 

Germany also rounded out the top ten in quality of life. Canada, Sweden, Denmark, Norway, Switzerland, Finland, Australia, Netherlands, and New Zealand rank higher than Germany that subcategory.

Quality of life was assessed by survey participants for their affordability, job market, economic stability, family friendliness, income equality, politically stability, safety, well-developed public education system, and well-developed public health system.  

The adventure category – or how desirable and “sexy” of a travel destination a country is perceived as – featured Germany´s lowest standing of all the subcategories this year, at 57 out of 80 total points.

Those surveyed viewed Brazil, Italy, and Spain as the destinations most likely to cure their wanderlust. 

Global consumers want Made in Germany

Additional rankings in the 2019 US News and World Report analysis such as best countries for women, best countries for education, and best countries origin index for products were also featured.

Those results show that Germany can be proud of its brand power on a global stage, particularly in the auto industry and health sectors. German brands came out on top in automobiles, health care, and pharmaceuticals.

German technology and electronic brands were also perceived very highly among the survey respondents and were ranked second, behind only Japan.

Vinters in Germany's wine regions should also raise a toast of sekt to the results. After Italy, France, Spain, and Portugal, the German wine industry ranked fifth.