June 23, 2016, marked a major turning point in European history: The United Kingdom, or at least the majority of those who voted, wanted to leave the EU. The shock of Brexit is deep. Nevertheless, the tug-of-war and wooing of companies seeking new locations in Europe following the British decision has already begun.
Bavaria's Finance Minister Söder, for example, hopes to significantly strengthen Munich as a financial center in Germany and recommends to Wolfgang Schäuble that the European Banking Authority (EBA) be relocated from London to the Bavarian capital without further ado. He believes that the banking center of Frankfurt am Main should not be allowed to exert excessive dominance in Germany.
What's the situation in Munich?
Meanwhile, Berlin already sees itself as a major startup beneficiary and a new magnet for fintech startups previously based in London. However, Dublin still appears as a competitor in the media's perception. Technology companies such as Facebook and Google have already established their European headquarters in the Irish capital.
However, for many companies, Munich will be the ideal location. Finally, according to a Deloitte study, Munich is Germany's number 1 digital location. The institutes Forecast and HWWI certify that the state capital has the best future prospects of all German cities. The EU Commission has identified Munich as Europe’s top ICT locationAnd large corporations like Google are gradually expanding their activities in the Isar metropolis: After a brand new Development Center for up to 800 employees, a Training Center of the search engine empire. IBM recently relocated the headquarters of its Watson IoT business unit to MunichThe US company plans to attract around 1,000 developers to the state capital.
Other factors that exert a strong attraction on startups are:
- With 7 out of 30 DAX companies, more top companies reside in Munich than in any other German city
- Thanks to its two elite universities, Munich offers highly qualified, international specialists
- No other German city can compete with the quality of life in Munich (Source: Mercer)
Further digitization projects in the Free State and especially in Munich are progressing at a rapid pace. In addition to existing Business incubators, startup centers and accelerators, is the construction of a new digitalization and innovation center in the heart of Munich, which is scheduled to open in 2019 and places particular emphasis on internationality, has already been decided.
So, the nest has been built. Now it's just a matter of not hiding one's light under a bushel and showing London entrepreneurs that Munich has much more to offer besides Oktoberfest and is one of Europe's leading high-tech locations.
Voices on Brexit from the Munich startup scene
Josef Schmid, Economic Mayor of the City of Munich:
"Of course, I would have liked the UK to remain in the EU, but we now have to live with the British decision and perceive Brexit as an opportunity and seize it. Many companies – from startups to large corporations – will probably be forced to find a new location within the European Union, depending on how the negotiations progress. Both economically and in terms of quality of life, Munich is one of the leading locations in Europe and offers optimal conditions for start-ups, medium-sized businesses, and large corporations."
Franz Glatz, Managing Director WERK1.Bayern:
"Brexit isn't a victory for Berlin. It's more like a football championship when one team is no longer competing in the tournament. Another team doesn't automatically win; the games continue. Hopefully, startups will go where the conditions, capital, and customers are best suited. Munich will certainly score some points there, too. Our new InsurTech focus, the talent pool at the universities, and the vibrant startup scene will certainly help."
Dr. Carsten Rudolph, Managing Director BayStartUP:
"From a purely objective perspective, not much will change for Munich startups (and all others outside the UK), especially not in the short term. Whether Brexit will close off markets for British startups and thus create opportunities for other regions to become new hotspots will depend on the negotiations. Nevertheless, Brexit remains a fatal signal for a modern Europe, because startups, in particular, benefit particularly strongly from open markets and the free movement of labor."
Dr. Donald Leonhard-MacDonald, CTO Leonhard-MacDonald Ventures GmbH:
"As a Scottish entrepreneur I am very happy to be European and hope Scotland will be able to remain part of the European Union. I'm grateful for the opportunity to locate my company in Munich and work with talented people from all over Europe without worrying about red tape or borders. Munich is especially well suited for starting high-tech B2B companies because of its strong economy, access to industry partners and research excellence."
