Berlin’s Regional Economy in the 1990S

Abstract

Berlin’s reinstatement as the capital of Germany has raised great expectations of its transformation into a major European metropolis. Some people even claim that Berlin is moving in the direction of becoming a ‘global city’. A more common interpretation of the structural changes in Berlin’s economy sees the current developments in the regional economy as a process of structural adjustment with the West German metropolitan regions, assuming that Berlin is in transition to catch up with the economic centres of the poly-central German regional system. This position is highly questionable, since first it ignores the overall trend towards a polarization between urban regions in terms of their economic performance, their different sectoral specialization profiles and innovative capacity; and second it is based on a highly simplified concept of the metropolitan regions’ economic structure, the concept of a ‘service metropolis’. The purpose of this article is to undertake a critical appraisal of the vision of Berlin as a service metropolis through empirical observation of sectoral trends and specialization profiles in four metropolitan regions of Germany. The comparative analysis of Berlin and major metropolitan regions in Germany comes to the conclusion that the notion of a common development path of metropolitan regions’ economies is misleading. In contrast to the structural adjustment thesis, the development of Berlin in the 1990s might be better characterized as an ‘open-ended’ structural break.