Berlin – The AI Talent Hotspot in Europe

1. Berlin – The AI Talent Hotspot in Europe A city that got the better of Bonn and emerged as the capital of Germany. A vibrant city known for its colorful street arts that exude creativity. A city that still has hollow remains of a tumultuous history. Berlin is now making its mark on the world with its new avatar of an AI talent hotbed. The need for AI talent is no longer limited to digital natives like Google, Amazon, and Facebook, given the application of the technology transcending industrial boundaries and spreading its wings to Banking and Financial Services, Retail, Healthcare, etc. With a gaping talent deficit in the AI space that organizations are battling to bridge, Berlin has taken significant strides in upping their AI talent game, drawing attention to the lesser explored Europe. Berlin’s Bet on Tech The German capital boasts of a rich technology ecosystem of homegrown tech giants, MNCs, and tech start-ups that hold the lion’s share of the country’s tech talent. Berlin houses 3300 technology employers, backed by multipronged support of government institutions, VC Ecosystem, and research collaborations. In our recent Zinnov Talent Landscape analysis of Berlin, we leveraged DRAUP’s proprietary Talent Module and concluded that the city has a rich Technology ecosystem. Here’s a snapshot of what Berlin has to offer:

2. So, what makes Berlin such a go-to technology talent hotspot? Let us delve into the factors that facilitate a rich technology ecosystem in Berlin. 1. Immigrant attraction factors in Berlin: A significant contribution of the migrant population accentuates the diversity and richness of the Berlin Technology Ecosystem. The city strikes a favorable demographic balance as it attracts immigrants from central EU region, US, and China – Thanks to its favorable immigration policies, job opportunities, and relaxed visa policies. The following numbers give a clear picture of how migrant-friendly the city is. • Berlin has the 2nd highest percentage (43%) of immigrant start-up founders in the world (behind Silicon Valley) • A sizable 16.5% of Berlin’s population comprises of immigrants from 186 different nationalities. Within the start-up scene, 49% of the start-up workforce is foreign. • Visa: It has the 3rd highest acceptance visa rate in the world at 77%. • About 34,000 foreign students are matriculated for the winter semester 2016/17. This is roughly 27% of all students in Berlin. Most foreign students are from China, Turkey, Poland, France, Russia, the USA and Italy.

3. The rich mix of various nationalities complements Berlin’s indigenous capabilities clearly acting as an enabler in firmly ensconcing Berlin’s position as a talent hotspot. 2. Key Talent enablers Talent – An inevitable resource, the engine of an economy, and an envisioned cause of the next world war, is definitely a critical component that contributes to the richness of an ecosystem. Berlin boasts of six aspects that contribute to its growth of talent: a. Growth Infrastructure & Environment Berlin ranks high with respect to the availability of crowdfunding and business angels funding or the overall access to capital. It also ranks good in the Managerial & Monitoring Assistance category but lacks the overall availability of a competitive digital infrastructure. Access to funds, and mentorship/monitoring therefore creates an environment conducive for attraction and growth of the tech talent. b. Innovation and Entrepreneurship Accelerators: Berlin is a powerhouse of innovation with more than 200 accelerators and workspaces* that foster fresh ideas and encourage entrepreneurship. Factory Berlin is the world’s first business club for start- ups, attracting talent from over 12 nations to foster technological innovations and entrepreneurship. The members of the factory include technical developers, designers, strategists as well as start-ups and global corporations.

4. B! Grundet is a network of Universities focussed on fostering university-based entrepreneurship. It is responsible for encouraging and providing ecosystem support to academic start-ups from universities and research institutions. Such initiatives act as a launchpad for inquisitive minds to make it big and contribute significantly to Berlin’s technology ecosystem. c. Start-up competency: There are over 3000 start-ups centered in the Berlin region, catapulting the city to the top 10 of the largest start-up hubs in the European Region. Berlin start-ups are estimated to generate 100,000 jobs by 2020 as predicted by many local analyst reports. The data clearly indicates the mushrooming of new ventures in the German capital, adding weightage to the start-up component of the tech ecosystem. d. The Digital Hub Initiative: The German Federal Ministry of Economic Affairs & Energy’s Digital Hub Initiative has highlighted 12 Centres of Excellence (CoE) to connect medium-sized businesses and large corporates with innovation partners from start-ups and scientific communities. There’s a specific focus on innovation in areas such as IoT and Fintech, thereby augmenting the contribution of these areas to the robustness of Berlin’s technology ecosystem. e. Breakthrough Funding: With more than ~800 funds & corporate investors, 3000+ Funding rounds & exits*, Berlin is copiously funding the new initiatives, spurring the start-up culture in the city. This trend encourages the entrepreneurial mindset and contributes immensely to the absorption of the tech talent into the ecosystem. f. Dual Vocational Training System: The government, in collaboration with several universities, vocational schools, and corporations, has created a dual vocational training program wherein a student spends 1-2 days at the school gaining theoretical knowledge on subjects ranging from Mechatronics Engineering and Electrical Engineering and the rest of the days gaining practical hands-on experience at a partner company. This focus on the development of a robust curriculum aligned to well-designed learning objectives contributes to the growth of young tech talent.

5. It is therefore evident that Berlin possesses a multitude of factors that create a conducive environment for the growth of a talent ecosystem. However, how does Berlin fare when it comes to AI talent which is much in demand and in vogue. Berlin at the center of THE AI TALENT STORM Artificial Intelligence is not confined to technology companies anymore owing to a wide range of use cases; countries are therefore grappling to leverage the opportunity and garner their pole positions in the AI race. The city houses 223 AI-focused companies that employ about 5,000 people and generate almost 500 million Euros in revenue**. Berlin is a frontrunner of Artificial Intelligence in Europe and is evidently carving a niche for itself in the space. Some of the key indicators of the fact that Berlin is fast becoming an AI capital of the world are: a.The Tech giants are setting up their AI shops in the German capital: “Artificial intelligence was already supported here at a time when that wasn’t popular,” – A Ph.D. from Berlin himself –Ralf Herbrich, Amazon’s Director of ML, vouches for Berlin’s prolonged association with AI. The Amazon Berlin Development Center employs 800 people with approximately 100 resources working on developing AI. Google has expanded its operations in Berlin; as of January, 300 employees are working primarily in the field of AI. Their work is on machine learning, and deep learning in particular. The spectrum of work ranges from foundational research to applications of AI involving language, images, and video.

6. The other industry giants unlocking the AI potential of Berlin include SAP, Rolls-Royce, Siemens, and Telecom. b. The AI start-up scene: Berlin is home to eleven unicorns and ranks at No.10 globally with respect to the number of unicorns. With the growth of start-ups in the German capital evident from the numbers, what is the scenario as far as AI start-ups are concerned? The answer is that 48% of all German AI start-ups founded between 2012 and 2017, had their genesis in Berlin, substantiating that AI is definitely one of the key focus areas of the Berlin start-ups. c. Research in AI: From 2007 to 2017, 273 AI-related research projects in Berlin-Brandenburg that were supported by federal ministries with a total of 117 million Euros in funding were identified***. There are 50-65 professors involved in research on AI-relevant subjects at universities, technical colleges and non-university research institutes in Berlin-Brandenburg. The research spans subjects ranging from speech recognition systems to collaborative Robots***. Last year the German government announced an investment plan of 3 Billion Euros to enhance the country’s AI capabilities over the next six years. Private sector companies are poised to catch up with that number, bringing the total investment to 6 Billion Euros. This strategy encompasses plans to build 12 AI Research & Development centers and create 100 university chairs focused on augmenting AI capabilities. “Older people sit down and ask, ‘What is it?’ but the boy asks, ‘What can I do with it?” . Steve Jobs Clearly, research is the foundation of innovation, and Berlin is evidently betting big on this essential capability. Berlin beckons The vibrant tech ecosystem, an incredible start-up scene, Federal funding, proximity to Technology universities, availability of academicians pursuing research in AI and a truly international culture are reasons enough for organizations looking to augment their AI capabilities to set up their centers in Berlin. Berlin has clearly carved a niche for itself in the AI space and is definitely an enticing location with a rich AI talent pool for global organizations to tap into.