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Alternative Economy: The Rise of Social Innovation in Berlin

The German capital is fast gaining a reputation as a creative hub for sustainable and social businesses, making the most of cheap working spaces

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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 citys 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 youre 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 citys 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 Entrepreneurs 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 Berlins 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.
Berlin possesses a burgeoning reputation as one of the most exciting startup hubs Photograph: m.a.r.c.
The booming ecosystem and support system for the tech startup scene in Berlin has not begun to bubble over to social
businesses until recently, often leaving the network fragmented. The Changer, a social impact career platform launched in
April 2014, believes it has begun to change this.
Our goal was to connect these social businesses, says co-founder Nadia Boegli. By presenting examples of successful,
innovative business that also solve social problems. Innovation happens most naturally when people get together to build
on ideas. By creating a digital space that makes social engagement more accessible to a wider audience, we hope to foster
social innovation and catalyse social change.
Crowdfunding is another compelling way of bridging this network and funding divide, which gives social entrepreneurs
more control over their business. Berlins Startnext lab, the largest crowdfunding platform in Germany, hosts and coaches
entrepreneurs in their office space. Local collaboration removes the middleman between producers and consumers.
Startnext labs crowdfunding campaign for Original Unverpackt collected more than 100,000 to fund a store without
packaging. Impressively, the platform boasts a 63% increase in funding since 2013.
Scaling up social businesses, however, has the complication of bringing them into direct competition with larger
corporations which draw more funding. Social businesses clearly want to grab market share but often must rely on the
strength of their idea, rather than funding. Companies such as Ruby Cup, a social business that donates menstruation cups
to girls in Africa, face this challenge. Their product cuts down on wasteful tampons and maxi pads and is therefore not as
fast moving as their competitors. Read: its not as profitable.
Most of the social entrepreneurs I spoke to did not expect their businesses ever to develop into behemoth corporations. But
that isnt the point: they believe there is an optimal size for a business that should serve the recurring needs of the world
and shift consumption norms by connecting consumer habits with values of fairness and sustainability.
As these initiatives thrive the change, and hopefully some of the money, will accompany this shift. And many are thriving.
Soulbottles struggles to meet demand; Ruby Cup is widely available in a local Bio grocery chains around Berlin;
and Coffee Circle a company that produces sustainably grown coffee and donates a portion of the proceeds into
development projects in Ethiopia recently received a large investment from investors and plans to move into retail.
In the absence of large alternatives to conventional consumption models, supporting businesses that connect daily needs
with a social good is a good thing. Its not a revolution: but it is a process of transforming habits into values.
Thomas McGath - The Guardian, Monday 30 March 2015