Berlin was founded at a point where trade routes crossed the river
Spree and it quickly became a commercial center. During the early modern period, the city prospered from its role as
Prussian capital by manufacturing luxury goods for the Prussian court and supplies for the Prussian military.
Industrial Revolution in 1847 During the mid-19th century, the
Industrial Revolution transformed the city’s economy. Berlin became Germany’s main
rail hub and a center of
locomotive manufacturing. The city became a leader in the manufacture of other kinds of machinery as well, and developed an important
chemical industry sector. Toward the end of the 19th century, Berlin became a world leader in the then cutting-edge sector of
electrical equipment manufacturing. As the
de facto center of the German
Zollverein, or Customs Union, and later the seat of the
Reichsbank, Berlin became Germany’s
banking and
financial center as well. Berlin suffered from both the
German hyperinflation of the 1920s and the
Great Depression of the 1930s. The city’s economy revived as a center of
weapons production under the Nazis, but it lost a pool of entrepreneurial talent when the Nazis forced Jewish businessmen to sell their holdings and ultimately massacred most who did not flee Germany.
After the World Wars World War II severely damaged Berlin’s industrial infrastructure, and Soviet expropriation of machinery and other capital equipment as “
war reparations” further damaged Berlin’s industrial base. Soviet restrictions on transport impeded communication with West Germany and ended hopes that Berlin would resume a role as Germany’s financial center; most banks established headquarters in
Frankfurt. In East Berlin, socialist central planners rebuilt a manufacturing sector, but one that was not competitive internationally or responsive to market demand. West Berlin’s economy grew increasingly dependent on state
subsidies and on its role as an educational and research center.
Reunification headquarters Berlin’s and Germany’s unification brought the collapse of many of East Berlin’s producers, which could not compete with market-disciplined Western competitors. Massive
unemployment was only partly compensated by the growth of jobs in the construction and infrastructural sectors involved in rebuilding and upgrading East Berlin’s infrastructure. The move of the federal government from Bonn to Berlin in 1999 brought some economic stimulus and tens of thousands of jobs from government employees, parliamentary services, lobbyists and journalism to Berlin. Berlin’s
service sectors have also benefited from improved transportation and communications links to the surrounding region. While some
manufacturing remains in the city (
Siemens and
Bayer Schering Pharma have headquarters in Berlin), the service sectors have become the city’s economic mainstay. Research and development have gained significance, and Berlin was ranked among the top three innovative regions in the EU (after
Baden-Württemberg and the
Île-de-France in 2006. In the same year unemployment remained high, at 16.5% as of 2006. Fast-growing sectors are communications, life sciences, mobility and services with information and communication technologies, media and music, advertising and design, biotechnology and environmental services, transportation and medical engineering. Since 2015 Berlin is the top congress city in the world and is home to one of Europe's biggest convention centers in the form of the CityCube Berlin (formerly
Internationales Congress Centrum). It contributes to the increasing tourism sector encompassing 592 hotels with 90,700 beds (2007 figures) and numbered over 22 million overnight stays by 9.8 million tourists in 2011. Berlin has established itself as the third most visited city destination in the European Union. Berlin's economy has grown continuously above the German average in the period from 2005 to 2013. This trend is set to continue, with important improvements to infrastructure, such as the biggest European crossing station,
Berlin Hauptbahnhof (inaugurated 2006), the opening of the 3rd biggest German airport,
Berlin Brandenburg Airport, in 2020 replacing the decrepit
Tegel Airport which was not fit to serve as a modern
airline hub. Also, the revered Berlin music scene, attracting tens of thousands of young tourists flying in for the city's famed clubs has become an increasingly important part of the economy and is set to gain the support of the city music board modeled after the German film promotion authority. ==Workforce==