02.12.2020

It’s official: Berlin remains Germany’s most innovative state

For the fifth time in a row, the ING Innovation Index names Berlin the most innovative federal state in Germany.

ING is a bank that operates globally in 40 different countries. Its roots are Dutch and go back to the eighteenth century. Every year the economists from ING bring out their Economic & Financial Analysis of Germany, in which they measure the performance of the 16 federal states based on eight indicators.

The indicators are:

Age potential
The proportion of under 50 year-olds compared to over 50 year-olds working in companies, because younger employees generally bring new knowledge and a fresh mindset to their employers.

Education
Percentage of employees with higher education compared to employees overall, because more highly educated people show a greater potential for innovation.

Operating dynamics
Ratio of businesses founded to businesses closed.

Flexibility
Proportion of freelancers in the workforce, because a higher level of self-employment leads to greater economic flexibility and potentially increases knowledge transfer between companies.

Patent applications
Patent applications relate to adaptability and innovation.

Employment in the high-tech sector
Amount of people employed in the high technology and science sector.

Internet connections
Availability of fast broadband Internet (≥ 50Mbit/s) for households.

Startups
Startup headquarters by state per 1,000 inhabitants, defined as startups and innovative companies with less than 1,000 employees.

ING uses diverse data sources: the Federal Employment Agency, the Federal Statistical Office and Destatis, IfM Bonn, DPMA, BMVI, Eurostat, Crunchbase, and Refinitiv.

Having evaluated and weighted all the data, ING came to the conclusion for the fifth time running that Berlin is number 1 in innovation.

Ranking in the ING Innovation Index 2020

Hamburg comes in second place on the innovation index, as the city state did last year, primarily because it is the youngest region demographically. A change comes at third place, with Baden-Württemberg replacing Bavaria.

Reasons why Berlin is most innovative

Thirty years after the reunification of Germany, Berlin as city state spearheads the six eastern states in terms of innovation. Not only that, no other German federal state has as many people founding so many enterprises, east or west. The startup scene is strongest in Berlin. And in no other state are as many people per capita employed in high tech jobs.

Berlin is also on top because employees have on average the highest level of education. Furthermore, there are more freelancers on average than in any other state. So all in all, Berlin gets top points in half of the eight indicators, and doesn’t do badly in any of the others.