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Alternative economy: the rise of social innovation in Berlin

Survey the ubiquitous litter of cigarette butts and wall-to-wall graffiti and Berlin reeks of urban decay. With the exception of its exemplary Bauhaus architecture, the city’s atmosphere is grey and drab, often reinforced by the curtness of its residents.

Enter one of the many co-working spaces that Berlin boasts, however, and you’re hit with a breath of fresh air. Behind the facade of disparate and dilapidated apartments are areas flooded with light and lined with Post-it notes. Here is something Berlin offers in cheap abundance: open space.

One of these co-working spaces, the Social Impact Lab, is designed to facilitate collaboration and incubate ideas. Many social businesses and enterprises earned their spurs here and through its scholarship programme. The draw is obvious: it is a community, or a dreamer madhouse where you can “work with other crazy people who actually believe you can make money changing the world”, says George Tarne, CEO of Soulbottles, a company producing stylish and carbon-neutral water bottles.

Collaboration spaces such as this are why Berlin is gaining a reputation as a hub for creative sustainable and social businesses. Twenty per cent of the city’s GDP flows through the creative and culture industry, while more than 4% is generated by research and higher education. Berlin boasts more than 70 publicly funded foundations along with 40 technology incubators, bringing the brightest and most creative together.

The German Federal Enterprise for International Cooperation recently launched its Inclusive Business Action Network in Berlin as well. In addition, a recent initiative called the Entrepreneur’s Pledge has prominent entrepreneurs from across Germany pledging to found social businesses that will reinvest half their profits into social or environmental projects.

Despite this growing space for collaboration in Berlin, there are questions about whether such initiatives can be scaled up to have a greater impact. Although Berlin’s reputation is burgeoning as one of the most exciting startup hubs, a recent study showed that only €926.1m flowed into its internet startup scene during 2011-12. That is scraps compared with Silicon Valley.

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