Following the elections last year, there has been a growing clamor advocating for a significant decrease in the influx of asylum seekers and migrants in the Netherlands. The intensity of this discourse has reached a point where it might shape the agenda of the new cabinet. However, this approach would be disastrous for national prosperity. At the same time, our neighboring country has been taking a different approach for the last couple of years. “The fact that the German economy is doing so well is partly due to the fact that we have a liberal migration policy for workers from other countries,” says Tobias Heidland, professor of economics at the University of Kiel.
Why you need to know this:
The positive impact of migrant workers on Germany’s economy, particularly in fostering innovation and addressing labor shortages, highlights the importance of embracing a liberal migration policy.
The figures do not lie. One fifth of start-up founders in Germany have a migration background. This makes them an important part of the startup ecosystem in the country. The most famous example: the duo behind vaccine company BioNTech, Ugur Sahin and Özlem Türeci. They have been supplying vaccines against coronavirus worldwide since 2020.
The trend is broader than just start-ups. Many German companies employ migrants. For example, of the more than half a million drivers in Germany, almost a quarter have a migrant background.
In Germany, there is currently a labor shortage in many different sectors. Those shortages will only increase in the coming years. The German coalition therefore wants to attract 400,000 skilled migrant workers every year. Failure to do so will hit the country’s economy hard. “What the government has done over the past decade is to relax migration rules for people in professions where there are shortages. The current coalition is also pushing strongly for this,” says professor Tobias Heidland, who is also head of the International Development research center at the Kiel Institute. “The country has to act. More people retire than enter through the education system, while pensioners are often the very people with valuable experience. So to keep employment stable, we also desperately need migrant workers in the coming years.”
“Can AI and automation do anything more to solve the shortages?”, Heidland wonders aloud. “These are useful tools, but not enough to fix the problem. In Germany, our economy is already highly automated, especially in sectors like the car industry, where robots are widely used. I am therefore pretty sure that we cannot do without highly skilled immigration.”
Situation in the Netherlands
The Netherlands also faces a pressing need for three million additional migrant workers in the coming years. However, concerns arise as the conditions for these workers deteriorate. The recent adjustment to the thirty percent ruling, a tax advantage for skilled migrants, exemplifies this trend. Although initially valid for five years, the tax-free portion decreases from thirty to twenty percent after the first twenty months, and further to ten percent in the final period. As the demand for migrant labor grows, maintaining fair and attractive conditions becomes crucial for the country’s ability to attract and retain talent.
A serial entrepreneur
Ramzi Rizk is a German tech entrepreneur. “I was born and raised in Lebanon, and I finished my bachelor’s there in computer science. Then, I decided to do my master’s in Hamburg. After that I started my PhD in Berlin.” But when he was almost through with that, he realized that academia wasn’t for him. “I was tired of Powerpoint”, he laughs, “and wanted to do something I love.”
Rizk is now a successful serial entrepreneur and investor. He co-founded EyeEm, a photo sharing service, and health start-up Aware. Last year, he started tech start-up Dunbar. His background was never a disadvantage to his work life. “Sure, every entrepreneur faces some hurdles, for instance when it comes to bureaucracy. But luckily, I never experienced racism of any kind because of my background.”
If anything, his background and past experiences have taught him insightful lessons. “I grew up amidst a civil war. There were times when we had to abandon our home and seek refuge in my grandparent’s village, just to ensure our safety. Facing danger teaches you resilience and the ability to put everything into perspective. It’s a crucial lesson for an entrepreneur learning how to persevere even in the face of obstacles.”
As a prominent figure in the German entrepreneurship scene, Rizk can say with confidence: “Increased diversity will undeniably enrich the ecosystem. A global mindset will allow us to compete.” Therefore, he firmly believes that immigration is a positive force, bringing in skilled talent and a diverse range of experiences. Whether we are talking about potential founders or prospective employees.
The entrepreneur hopes that the rise of right-wing extremism, a pan-European trend, won’t throw a wrench into the works. “And not just right-wing extremism, but anti-immigrant sentiment in general is a problem, which I believe is in many ways rooted in socioeconomics. We are an aging society resting on our laurels. People are worried about their retirements and their basic needs. In addition, politicians in power are distracted by other issues or not really taking any action.” Despite these challenges, the entrepreneur remains hopeful for a brighter future with collective efforts to address the issue.
Rise of the far right
Indeed, the Netherlands is not the only country where right-wing extremism is on the rise. For Germany’s established parties, it was long unthinkable, but if there were elections now, the radical right-wing party Alternative für Deutschland (AfD) would be the country’s second largest party with 21 percent of the vote and even the strongest party in the Eastern German states. Heidland fears this will ultimately limit the influx of migrant workers. And that could potentially cause problems for the German economy, the professor predicts. “We have to wait for the next elections to see what will happen, but companies and other institutions that tend to hire international talent have started to worry”, he concludes.
