Arts venues: more than 400 art galleries, 150 theatres, three opera houses and 170 museums.
Cinemas: 289. The Berlinale, Berlin’s international film festival, is rising to Venice and Cannes levels of recognition and celebrity count.
Creative industries: film and TV make up the majority of the work force in the creative sector, with 35,997 employed. Publishing and literature and games and software are close behind. The number of companies in this sector grew 16 per cent from 2000 to 2005.
Media: Hamburg media company Axel Springer has a major operation here, and the national tabloid, Bild, moved its headquarters from Hamburg to Berlin in March this year – a seismic shift in the media landscape.
Funding: Berlin receives 35 per cent of the federal government’s €1.1bn culture budget.

The most anticipated event of Berlin’s recent gallery weekend was the soft launch of one of Germany’s best private collections of contemporary art. Clutches of invited guests – some hollow-eyed from the excesses of the Saturday night before – slowly walked past pieces by Olafur Eliasson and Sarah Lucas, collected over the past two decades by Christian Boros, an advertising executive from the west German city of Wuppertal.

But perhaps more impressive than the 500 pieces of art was the location – a former Nazi bunker cleverly transformed from a five-storey concrete behemoth into a maze of light, airy rooms and balconies. “It’s a sculpture,” says Christian Braun, a visiting Munich architect. “The idea is absolutely wonderful.” It is also not possible anywhere else.

Berlin may lack major industries and boasts an unemployment rate of 16.5 per cent – higher than the Dominican Republic – and the schizophrenia of its divided existence may continue to burden its search for a place among the world’s capitals, but in that vacuum, a cultural hub has emerged that MONOCLE feels just might be unparalleled in Europe.

Visitors to the recent gallery weekend, when out-of-town curators and collectors perused the offerings of Berlin’s burgeoning art scene, were able to see work in over 400 galleries and 170 museums. More than 150 theatres, three major opera houses, and a world-class philharmonic orchestra await visitors at night, not to mention scores of nightclubs secreted away in abandoned power stations, breweries and GDR-era pre-fabricated office buildings.

Berlin’s institutions reflect the legacy of its cultural heritage – from the august neo-classicism of the 19th-century Staatsoper Unter den Linden and its tribute to Prussia’s pomp, to the 1960s-era Hans Scharoun-designed Berlin Philharmonic building and the expressionist Schaubühne theatre, where West Berlin expanded its acclaimed music and theatrical reputation thanks to millions in government subsidies.

In the past decade, the city has made up for the dearth of blue-chip companies by harnessing the same sort of inspiration behind Tony Blair’s short-lived Cool Britannia, and pushing its creative industries. In the detritus of a once-thriving textile and manufacturing industry it has recognised a luxury largely unavailable in other European capitals: space.

“There are buildings a few blocks away from here, right on the Spree River, that are completely empty,” says actor Clemens Schick, who first moved to Berlin in 1993 and still has a flat in the city’s punk and Turkish neighbourhood, Kreuzberg. “That’s what makes Berlin different. The potential is still there.”

All that potential has fed a titanic wave of hype. The travel sections of the world’s newspapers are regularly filled with Berlin love letters. Armadas of creatives from Brooklyn, east London or Madrid, in black jeans and keffiyeh scarves, have migrated here for the city’s cheap studio space and round-the-clock nightlife. New York’s Goff & Rosenthal gallery, Mumbai’s Bodhi gallery, and London’s Haunch of Venison have all opened up spaces in the capital.

The German music industry, beginning with Universal Music and MTV, began a migration here from Hamburg and Munich in the past few years. Pity Hamburg’s mayor, who in a recent interview expressed the wish that people would consider his city as “exciting, magnetic and interesting” as the German capital.

“No one in the media business who needs visibility can afford not to be in Berlin,” says Jörg Koch, the lanky, effusive publisher of the postmodern art and fashion magazine 032c. The publication, which Koch runs with his wife Sandra von Mayer-Myrtenhain, recently opened its first office and “museum store” near a new, central townhouse development designed for an increasingly upmarket Berlin resident, within sight of the Foreign Ministry. Follow the river Spree southeast from the government quarter, past Rem Koolhaas’s sleek Dutch Embassy, and you reach a growing cluster of music labels, publishers and multimedia gaming companies opening in former shipping warehouses and industrial buildings lining the banks.

Here, in Kreuzberg, Turkish mingles with German, and, increasingly, American English. Older Turkish immigrants pull grocery carts past young graphic designers on their way to the cafés, MacBooks and packets of cigarettes in hand. Along Köpenicker Strasse, the conduit from Mitte to the new emerging enclave of Schlesisches Tor, Konrad von Löhneysen in 2000 opened up the Berlin offshoot of the Ministry of Sound record label in a turn-of-the century industrial building. “If we were doing something new, it needed to be in Berlin,” says von Löhneysen, who still has the slim frame of a veteran clubber and smoker, but whose hair has faded with age. “It was clear that more was going to happen here.”

The transformation is illustrated by the view out of Löhneysen’s light-filled office, across the river and beyond the longest stretch of the Berlin Wall still standing. An abandoned railway station, once the home of one of Berlin’s premier gay clubs, was razed two years ago to make room for the O2 World arena, built by the US media magnate Philip Anschutz. “The Police toured Germany last year and played in Hamburg, Düsseldorf and Munich,” says Löhneysen, smoking a Gauloise red and looking out at the royal blue façade of the new hockey and concert hall. “You have an arena like that in every other city in Germany. So it makes sense to have one here.”

A bit further down the Spree, past the Munich insurer Allianz’s Berlin outpost and near the lush expanse of Treptower Park, are the loft offices of event and brand architects, dan pearlman. The company’s four founders picked Berlin over Hamburg eight years ago because it seemed to have more “oomph”, as partner Nicole Srock-Stanley puts it. Its list of clients includes Munich’s BMW and Escada, Leverkusen’s Bayer, as well as Hanover Zoo. “If you’re based here, you need to travel a lot,” she says.

But, she adds, “We’ve always done well. There’s an advantage because clients love to come to Berlin. And if you’re from Berlin, you automatically get a little creative bonus.” Never mind that Srock-Stanley and her partners waited a lot longer than planned for their success. Never mind that the plan for O2 World has been around longer than it has taken to build it. Never mind that Berlin’s “potential” has been bandied about in conversations since the fall of the Wall. Berlin’s one consistency is its refusal to conform to the expectations of others.

Indeed, the rise of Berlin’s creative class has happened, as Koch points out, “without any sort of government structure or economic pressure”. And therein lies one of the biggest challenges for the city government: how to find an unobtrusive way to steer the growth of Berlin’s €18.6bn creative industry so that something comes out of the hype. Jobs, for example, and revenue.

Among the grey legions of Berlin’s bureaucrats, Tanja Mühlhans stands out. The attractive 39-year-old has lobbied for Berlin’s creative talent since 2001. She’s hosted round-tables between aspiring fashion labels and Germany’s notoriously risk-averse bank creditors and worked on building networks and websites aimed at helping creative companies grow.

This year, Berlin’s economics senator Harald Wolf initiated a €30m fund that will provide financial aid to successful creative firms – from film companies to multimedia and software designers. “We see growth potential in creative industries and that we can create a framework; but we can’t find a solution for everyone,” she says. “And because of our dwindling resources, we have to focus on the companies with growth potential.”

This pick-and-choose approach is both revealing of the limits of a bankrupt city – debt still hovers at €60bn – and Berlin’s recognition that it should devote resources to one of the few industries that might have a future here. And while she mediates and encourages the creatives, and prods and goads the bureaucrats, Mühlhans can only hope the city’s success stories have patience.

At the after-party for a Nobuyoshi Araki opening at the gallery belonging to Köln dealer Rafael Jablonka, Chris Schönefeld mused on business in Berlin – and the possibility of moving away to Paris and London. “The production survives only on the fruits that fall off the side of the delivery truck as it makes its way through this city,” says Schönefeld, whose photo production agency Made in Germany organises shoots for Dior and Stella McCartney, among others. “But it never stops here. We survive because 70 per cent of our projects are abroad.”

A few feet away, past the erratic dancing of pop journalists and artists on the small dancefloor, Jablonka huddles with the Munich media manager Christiane zu Salm – who also showed her collection in Berlin. Jablonka is similarly wary about art market success in Berlin. Araki’s photos, produced for Jablonka’s gallery, have been selling “so-so”. Art produced in Berlin by names such as Thomas Demand and Eliasson, on the other hand, has appeared in shows at MOMA and Tate and sold all over the world.

“This city,” he says, “is to the art market what China is to the world economy. But who’s buying in Berlin?” Yet the energy of Berlin’s multitudes of creative talents continues unabated. A recent EU-funded project, Design Reactor, paired students at the city’s top arts school, the Universität der Künste, with local craftsmen and hi-tech companies. Of all the resulting products, six have applied for patent protection, and several are being turned into bona fide business ideas. Among them, Israeli student Nora Lerner’s “Music Drop”, a small silicon earpiece that can store data equal to one song that can be played just once. Companies are lining up to turn her Music Drop into a merchandising instrument.

Fellow students Hanna Wiesner and Magdalena Kohler have taken their project, creating unique textiles by generating patterns from their customer’s voice frequencies, and started a fashion label. The two have already begun polishing the concept in their spacious, low-rent flats.

“We plan to start a collective,” says Wiesner, 27. “And that’s typical Berlin. You can start something and only worry about paying the next month’s rent.” Their energy is as encouraging as it is naive. But it would be foolish to dismiss the potential. After all, if a Nazi bunker can be converted into a showcase for contemporary art, who’s to say sweaters and scarves personalised with new technology can’t become a viable business idea? Wiesner and Kohler have time – as, it seems, does the city they call home. “There’s something bubbling here now, and it’s all going to explode,” says Lerner. “I’m sure Berlin is going to change in 10 years and I want to be there when it does. And I want to be here now, before it does.”