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Losing one million scientists, Germany turns to talented immigrants

LiveMint logoLiveMint 11-06-2014 Alex Webb

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 in northern Germany. “I was shocked that the shops were all closed from Saturday afternoon at 1 p.m. And then on Sunday, it’s dead.” , she added.

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

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 AG and Siemens AG but also on thousands of small and medium-sized businesses responsible for much of Germany’s technical innovation.

Welcoming culture

It is a big risk to the German economy, said Wolfgang Herrmann, the head of Munich’s Technical University, whose alumni include Alcoa Inc. chief executive officer Klaus Kleinfeld and three Bayerische Motoren Werke (BMW) AG CEOs.

We must have the courage to seek out the best labor, be more liberal in allowing the capable to come to Germany, and develop a welcoming culture for the best minds.

In European Union 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 2013 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.

Engineering appeal

German universities are expanding programs 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 neighboring 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 technical university 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 program.

Shukla landed several interviews, including one at Volkswagen, and he received a job offer from Ford Motor Co.’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.

Family wins

If you have a job where you make calculations to improve fuel efficiency by 2%, 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 now 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 says she’ll 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 have pursued studies in Germany are 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 near General Electric Co.’s European research hub. 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.

Many ambassadors

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.

Mittelstand’s dilemma

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 country’s immigration rules are now among the most lenient in the OECD. In a 2011 survey of more than 1,100 employers, nearly 50% said they had never considered the possibility of recruiting from abroad and more than 30% said the process was too complicated.

The dearth of talent is a particular dilemma for the Mittelstand, the small and medium-size enterprises which account for 52% of Germany’s economic output. With almost two- thirds in industrial and manufacturing fields, a shortage of qualified employees is costing those companies € 31 billion in annual lost revenue, according to a January report by Ernst & Young LLP.

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

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

The US attracts the most top scientists in the OECD. Germany is a net exporter of such talent.

Educated foreigners

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 fuer Deutschland pledged to limit low-skilled immigration in favor of targeting highly educated workers, contributing to its best electoral result yet.

Across the political spectrum, policy makers accept the need to act. Germany is now 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 labor market to those with a post graduate degree earning at least 46,400 euros.

Canada’s model

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

For those highly skilled immigrants who stick it out in Germany, overcoming the challenges of getting ahead can prove well worth the effort. That was certainly 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 college’,” Clever said, recalling her arrival 23 years ago in Germany, where her father was an academic. ‘‘So I lost three years.”

Blending in

Upon graduation, Clever quickly made up for her lost time. She turned down positions at Microsoft Corp. and Accenture Plc’s predecessor to take a job at SAP, then little more than a Mittelstand company. In the intervening years it has become the world’s largest maker of business software, and Clever’s path over two decades there followed a similar trajectory, with positions in Germany, India, China and the US.

In her current role as the top technology executive at ProSiebenSat.1 Clever has also experienced first-hand the difficulty in finding talent in Germany, particularly in software programming. ProSieben, which employs three-quarters of its 3,590-strong workforce at home, is having to look abroad for new hires.

Clever is an anomaly for her generation. She was the only one of her 160-student incoming class at Tsinghua to have come to Germany, though about two-thirds fled China, she said. Almost all of her contemporaries headed to the US, with a handful going to Japan.

She believes that key to her success was making the effort to fully blend into the German way of life.

‘‘I don’t like it when people do not honor the language and culture of the host country they are living in”, said Clever, who became a German citizen around the year 2000.

Staying connected

There is a difference between inclusion and integration. You could be integrated into a society but always be viewed as a separate entity. Inclusion means really becoming part of it, so there’s no difference between you and others.

It’s a lot easier now for those who have followed in Clever’s path. When she completed her university studies, she had one day to secure a work visa to avoid being forced to leave the country. International graduates of German universities are now given an 18-month job-search visa.

Yet the rest of the world has also changed in the intervening years, and those immigrants with opportunities in Germany now may simply realize that they have other options, too.

One reason Jing is heading home is her conviction that her studies in Munich, and her concurrent internship at BMW, could help her get a job in China. That, of course, will leave Germany’s mittelstand without her skills.

“It is certainly easier for a German to get a job here than it is for a foreigner”, she said. But if, in the future, I wanted to work for a German company in China, then there are definite advantages. Bloomberg

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