Germany turns to immigrants

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An employee works on a new BMW C Evolution electric scooter in Berlin. Demographic trends are endangering the industrial and engineering future of Germany, which is facing a looming talent crisis. Photo: Bloomberg

 

Munich - With Europe’s lowest birth rate and its oldest population, Germany needs immigrants, and not just any immigrants. It needs Xiaoqun Clever.

Disillusioned by her prospects in Deng Xiaoping’s China, the computer scientist abandoned her studies there to come to Germany in 1991. In the beginning, it wasn’t easy. “I said to my dad ‘God, I am lost here; it’s a boring country, I am wasting my youth here’,” Clever recalled of those early days in the university town of Goettingen. “I was shocked that the shops were all closed from Saturday afternoon at 1pm. And then on Sunday, it’s dead.”

She persevered, spent two decades rising up the ranks of software giant SAP and, in January, landed the plum job of chief technology officer at private broadcaster ProSiebenSat.1 Media.

With economists estimating that Germany stands to lose more than a million qualified engineers, mathematicians, computer technicians and scientists by the end of the decade, the country is facing a looming talent crisis. Without a fresh influx of highly educated, highly skilled newcomers like Clever, demographic trends stand to endanger the industrial and engineering future of a country whose economy is built not only on national icons such as Volkswagen and Siemens, but also on thousands of small and medium-sized businesses responsible for much of Germany’s technical innovation.

“It is a big risk to the German economy,” said Wolfgang Herrmann, the head of Munich’s Technical University, whose alumni include Alcoa chief executive Klaus Kleinfeld and three BMW chief executives. “We must have the courage to seek out the best labour, be more liberal in allowing the capable to come to Germany, and develop a welcoming culture for the best minds.”

In EU elections last month, German voters showed they are receptive to that message. Even though the tilt of most of the continent has been decidedly anti-immigration, political parties in Germany that backed entry for more skilled workers gained ground.

Still, the country has a long way to go. While the number of international students is growing, it is doing so more slowly than in other OECD member states, according to an October study. Germany also ranks below the US, Canada and Australia in the migrant integration policy index, produced by the British Council and the Migration Policy Group to assess countries’ procedures for granting citizenship.

German universities are expanding programmes to attract more top students from China, Russia, India and elsewhere. When Herrmann took over at Munich’s TU in 1995, the greatest foreign contingent was from neighbouring Austria. Now it’s the 1 100 Chinese in the 38 000-strong student body. Yet many of these foreign students, initially attracted to Germany’s engineering tradition, turn down jobs for opportunities closer to home.

“As a mechanical engineer, I knew that Germany was doing things in the right way,” said 26-year-old Indian Mohit Shukla, who declined an offer to attend Indiana’s Purdue University for Aachen’s University of Applied Sciences in north-west Germany in 2009.

Lower tuition fees also helped swing Shukla, the first in his circle of friends and classmates to study in Germany, where he earned a master’s degree in computational mechanics. He was one of four from his home country who entered the university on its English-language programme.

Shukla landed several interviews, including one at Volkswagen, and he received a job offer from Ford’s German operations. In the end, he opted to return to his family’s business in India, where he felt his work would have more impact.

“If you have a job where you make calculations to improve fuel efficiency by 2 percent, then you might not be able to see the difference in society,” Shukla said, referring to the job offer at Ford. The small company he runs makes plastic molding for portable toilets, an important product for improving sanitation in India.

Many engineering and computer software students who come to Germany from abroad never give serious thought to staying. Jing Cui said she would head back to her native China after finishing her masters in mechatronics, which combines mechanical and electrical engineering, at Munich’s TU next March. Many of her contemporaries who had pursued studies in Germany were doing the same, the 24-year-old said.

“My mother thinks I should go straight back because – and I tend to agree – she says family is more important than work,” Jing said at the university’s campus in northern Munich. “There are lots of students who go to Germany but also lots who come back” to China, said Jing, who is working as an intern at BMW as part of her course work.

The reluctance of students like Shukla and Jing to take local jobs may have an upside, at least in terms of recruiting future students.

“Every student who has been at Harvard, Stanford or Duke performs an ambassadorial function when they return to their home country,” said Herrmann, who in 2002 opened the first foreign campus of any German university with a site in Singapore. “We have to build a brand internationally, it’s not just about educating people.”

Still, Germany needs educated workers, not just students. One hurdle is language. Another comes from local attitudes about hiring. Many companies lack experience hiring non-Germans, even though the immigration rules are among the most lenient in the OECD. In a 2011 survey of more than 1 100 employers, almost 50 percent said they had never considered the possibility of recruiting from abroad and more than 30 percent said the process was too complicated.

The dearth of talent is a particular dilemma for the Mittelstand, the small and medium-size enterprises that account for 52 percent of Germany’s economic output. With almost two-thirds in industrial and manufacturing fields, a shortage of qualified employees is costing those companies e31 billion (R450bn) in annual lost revenue, according to a January report by Ernst & Young.

The Mittelstand is also key to sustaining the innovation that has made Germany a bigger net exporter than the US – 54 percent of such companies brought a product or process innovation to market between 2008 and 2010, compared with the EU average of 34 percent.

Immigration was “important for companies which are drawing on the new technologies, like IT, and companies which need skilled, very, very smart people”, Christian Dustmann, the director of University College London’s Centre for Research and Analysis of Migration, said. “Germany has not been very successful in attracting a workforce that is highly skilled.”

An accelerating swing to the right across Europe has brought immigration back to the fore of public debate. In last month’s European elections, voters in France and Britain pushed anti-immigrant parties to the top of the polls. In Germany, the message was more nuanced. The right-wing’s Alternative für Deutschland pledged to limit low-skilled immigration in favour of targeting highly educated workers, contributing to its best electoral result.

Across the political spectrum, policymakers accept the need to act. Germany is on track to have a skilled workforce shortfall of 1.4 million by the end of the decade, the Cologne Institute of Economics estimates. Lawmakers have been attempting to overcome those demographic forces for years. Efforts to attract high-skilled migrants culminated in the Blue Card introduced in August 2012, opening up the labour market to those with a post graduate degree earning at least e46 400.

The goal is to approach a system that more closely resembles Canada’s, where OECD statistics show 52 percent of foreign-born residents have a university-level education. That compares with 30 percent in the US and 19 percent in Germany.

For those highly skilled immigrants who stick it out in Germany, overcoming the challenges of getting ahead can prove worth the effort. That was true for Clever.

“They told me ‘Any university from China is not at the same level as our university; it is just like a technical school’,” Clever said, recalling her arrival 23 years ago in Germany, where her father was an academic. “So I lost three years.” – Bloomberg


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