Obstacles to starting a business, little diversity and visa problems: a study shows how unattractive Germany is for skilled workers from abroad.
Although many tech companies are currently shedding jobs, the shortage of well-trained specialists in Germany is increasing at the same time. According to the Bitkom digital association, around 137,000 IT developers are currently missing. In relation to all sectors, there were even around two million vacancies in the fourth quarter of 2022, according to data from the labor market research institute IAB.
The federal government’s plan to specifically recruit talent from abroad may not work as well as expected. The reason: Germany has become less attractive for qualified immigrants to live, work and set up a business compared to other countries. This shows a newly published Study by the Bertelsmann Foundationthat along with the Organization for Economic Co-operation and Development (OECD) was created.
In the analysis, which takes all 38 OECD countries into account, the Federal Republic has fallen well behind countries such as Canada, the USA, New Zealand and Sweden since the last survey in 2019. This applies to both the group of foreign skilled workers (15th place, previously 12th place) and immigrant start-up founders (12th place), who were included in the study for the first time. According to the foundation, the conditions in Germany have not deteriorated, but other countries have caught up.
Seven criteria were decisive for the placement, for which the countries were examined: These are the quality of professional opportunities, income and taxes, future prospects, opportunities for family members, the competence environment, diversity and quality of life. The authors of the study also included health services and possible hurdles in the issuance of visas in the analysis. The categories were evaluated for different groups of people, i.e. from international students and specialists to potential start-up founders and entrepreneurs. The statisticians show how the individual nations perform using a scale between zero (very bad) and one (very good).
Foreign start-up founders face more hurdles in Germany than in other countries
In Germany, the weak point for foreign start-up founders lies primarily in the professional opportunities offered here. This means, for example, how easy it is for immigrants to set up a company here and how well developed the startup ecosystem is. With this criterion, the Federal Republic only makes it into the lower midfield (0.15). According to the study, the USA offers the best opportunities for immigrants to realize start-up ideas (0.71). When it comes to income, access to capital and tax regulations, Germany does slightly better.
The prospects are good for potential founders who come to Germany with their families, for example to enter the country together, gain a foothold in the labor market, attend good schools and receive government support. Along with Canada, Ireland and Great Britain, Germany is in the top group here (0.69). Since the proportion of female founders in the German start-up scene remains expandable at around 20 percent, there are deductions in terms of diversity (0.47). Ireland and Canada fare significantly better in comparison.
Nevertheless, foreign founders in Germany benefit from investments in research and development, for example, and have access to qualified workers who have a good knowledge of English. This puts Germany in the top group in the “Competence Environment” category. Overall, Canada has the best framework conditions for founders, taking first place overall, followed by the USA and France. The Federal Republic fights its way to twelfth place.
Overall, New Zealand, followed by Sweden and Switzerland, offers the best conditions among the OECD countries for highly qualified migrant workers. Compared to the front runners, Germany only ranks in the lower midfield when it comes to career advancement opportunities, income and prospects. More than 15th place is not possible.
According to Bertelsmann, the Federal Republic must position itself better when it comes to digitizing visa procedures. In addition, there is the problem that visa applications from highly qualified specialists are often rejected and a specially tailored visa is missing for founders.
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