Berlin's economy thrives—but its outdated self-doubt holds it back

The capital's economic rise is undeniable, but red tape and hesitation threaten its next leap. Why does Berlin still underestimate itself?

, and Administrator

2026 January 31 . 1:02 AM

1 min read

The image shows an old book with a map of the city of Berlin on it. The map is detailed and shows... — The image shows an old book with a map of the city of Berlin on it. The map is detailed and shows the streets, buildings, and other landmarks of the area. The text on the book provides further information about the city, such as its population, landmarks, and streets.

Berlin's economy thrives—but its outdated self-doubt holds it back

Berlin's economy is stronger than many assume. Despite a reputation for bureaucracy and high costs, the city now outperforms rivals like Hamburg and Bremen. Yet its self-image still lags behind reality.

The capital has evolved into a hub for services, technology, and knowledge. Employment is rising, and structural changes show fewer signs of crisis. But family businesses in Berlin continue to struggle with slow approvals, red tape, and expensive locations.

No local groups are directly tackling these issues within the city. Instead, national organisations like Familienunternehmer and BDI push for tax cuts and less bureaucracy at the federal level. Political parties such as the CDU and CSU also advocate for faster reforms, but their focus remains on nationwide policies rather than Berlin-specific solutions.

While Berlin's growth is steady, it still trails top-tier economic centres. Yet the old narrative of constant failure no longer fits. Hamburg, once seen as a model of efficiency, now ranks below Berlin in performance metrics.

The city's economic progress is clear, but its mindset has yet to adjust. Without addressing local challenges like bureaucracy and costs, Berlin risks holding itself back. A shift in perspective could help unlock its potential as a more confident economic player.