ZEW Press Release: Innovative Firms in Berlin Benefit from Proximity to Research

Innovative firms in Berlin are trying to get as close to research as they can. Berlin's innovation hotspots for businesses are often located in the immediate vicinity of institutions of higher education and research facilities. This is certainly the case for the area surrounding the Technical University of Berlin and the districts of Adlershof and Buch. Innovative firms are, on average, surrounded by 80 per cent more researchers within a radius of 50 metres than non-innovative firms. However, the further we expand the radius, the less significant this difference becomes. For example, within a 250-metre radius innovative firms are surrounded by only 40 per cent more researchers. An innovative firm's direct geographical proximity to research is thus a decisive factor. These are the findings of a study carried out by the Centre for European Economic Research (ZEW), Mannheim, in cooperation with Professor Knut Blind at TU Berlin with support from Technologiestiftung Berlin.

Berlin\'s innovation hotspots for businesses are often located in the immediate vicinity of institutions of higher education and research facilities.

The close proximity of innovative firms and research is more pronounced in the case of research institutions than for higher education institutions. However, this is often due to the fact that university campuses are very large, which makes it impossible for firms to settle in direct proximity to them. The study also shows that research locations focussed on applied natural sciences, engineering and medicine attract and encourage innovative firms the most. By contrast, there are no distinguishable innovation hotspots in the areas surrounding the Free University of Berlin or Humboldt University.

"The large number of research institutions in Berlin is a geographical advantage for businesses in Germany's capital," says Dr. Christian Rammer, project leader in ZEW's Research Department "Economics of Innovation and Industrial Dynamics" and co-author of the study. At 48 per cent, the percentage of innovating firms in Berlin is higher than the national average (43 per cent). "Here it's the high number of small firms that really make a difference. A considerable proportion of the innovative firms in Berlin can be attributed to the incredibly active start-up scene in the city, with a large number of firms set up by students and recent graduates," Rammer continues.

Alongside these research locations, Berlin also has three other innovation hotspots in its more typically creative neighbourhoods, namely Prenzlauer Berg, Kreuzberg and the area between Berlin Ostbahnhof and Ostkreuz, which contain further concentrations of innovative firms. "In these areas it's mainly small businesses from the creative industries, ranging from advertising agencies to design workshops and IT firms, driving innovation," Rammer explains.

The results of the study are derived from the "Innovation Survey for Berlin" which has been carried out annually as of 2012 by ZEW with the support of Technologiestiftung Berlin and TU Berlin. Data from a total of more than 3,750 Berlin-based firms was incorporated in the analysis.