The Future Workplace for Startups in Germany

Stephen Emmott, author of the controversial book ’10 Billion’, predicted that the overall population will grow towards 10 billion till 2050. Even though there are severe doubts about his exponential growth theory as you can read in Michael Shermer’s review in the Wall Street Journal, it is undoubted that the German population will decline till 2020 (See Figure 1). Furthermore, it is predicted that Germany’s startup scene will decline accordingly by 5.5% till 2020, which can be traced back to the demographic development.

Figure 1: Future Outlook Demographic Development (Source: Destatis)

Due to this fact Dr. Wagner & Partner took a look into the crystal ball to predict how these trend will shape the future landscape of startup workspaces. How will the future workplace of a German startup look like in 2020? In order to answer this question properly, we have to analyse all current trends regarding working and workspaces.

The Traditional Office

Germany’s undisputed startup capital is Berlin, followed by Munich, Frankfurt and Hamburg. These cities are all growing rapidly, which positively influences the rent development of housing as well as office properties. Bearing the on-going gentrification process of these metropolitan areas in mind, it can be postulated that rents for traditional office space will continue to grow till 2020 even though the overall trend in Germany might be negative. Thus, it will be even less affordable for startups to rent their own office space.

Most startups tend to allocate in cities with an entrepreneurial infrastructure. The aforementioned entrepreneurial infrastructure comprises investors, accelerators, incubators and a vivid startup scene for networking. Due to this fact there is no other option for startups that want to access investors, participate in certain programmes or need a good network, than to move to such a startup hub.

What are affordable workplace solutions for startups in those hubs, where rents will increase in the near future and probably beyond?

The Home Office

According to the Federal Bureau of Statistics (Destatis) there is a decreasing popularity regarding working in the home office. Even though the technical framework conditions are existent, the home office is not very popular due to Germany’s business culture, which demands presence in the office. Since there are no representative statistics regarding startups and home office usage, it is unknown how many startups work in a home office.

Bearing the German business culture in mind, it is likely that growing startups will have to move to a proper office or co-working space in order to be taken seriously.

The Office To Go

How about sitting in the sun and living the digital nomad way of life, as we will describe in a following article? With abundant Wifi hotspots, light ultra-books and tablets, it seems very easy to completely overcome the traditional office, especially if you are a creative, online startup. It would be the most basic, hence lean, way to operate in an early stage. Since this way of working is even more “extreme” than the home office, all aforementioned criticism applies likewise.

Co-working Spaces

As you can read in our article about co-working spaces, this workplace solution is becoming more and more popular. Germany had only 150 co-working spaces in 2011, whereas there are now about 500.

Due to macro-economic uncertainty, increasing office rents in metropolitan areas and the demand of startups for lease flexibility, it can be stated that co-working spaces will become more important till 2020. The momentary co-working situation in Germany is improvable, compared to other international startup epicentres like London. The best place to co-work in Germany is Berlin with currently 68 spaces. Unfortunately, most co-working space operators fail to provide a well-balanced mixture between co-working areas, single-offices, conference rooms, social activates and further amenities.

Thus we can postulate that the co-working environment has much potential in the near future and will be a viable office option for startups that want to allocate in expensive metropolitan areas.

End Note

Comparing those four options, it can be concluded that early-stage startups and entrepreneurs might tend to work from home or on the go in order to stay lean. For growing businesses which plan to scale, it would be advised to either move into a traditional office or to a synergetic co-working space. The decision should be based on the nature of the business and your future plans.

If you want to establish your own corporate culture with a good employer branding you will have to find a suitable office space for your needs. Experience has shown us that many companies fail to find the perfect office space. Thus, Dr. Wagner & Partner made it their mission to help companies finding the perfect workspace.