Start-ups and scale-ups are the stars of the German economy – dynamic, innovative and growth-orientated. Over 100,000 new jobs in just four years is a strong statement, especially in economically uncertain times. However, these impressive figures conceal a real problem: the shortage of skilled labour. For 60 per cent of scale-ups, this is the main obstacle to growth. These are the findings of a recently published study in which the Stepstone Group and the Startup Association jointly take a look at this economically crucial issue, focussing on the role of international talent. Without them, the industry is in danger of running out of steam – and that would be fatal for Germany as a centre of innovation.
With almost half of their workforce from abroad and English as a working language in three out of four companies, scale-ups are already pioneers of global collaboration. The international focus is a necessity, as Germany alone cannot meet the growing demand. Talents in IT (69 per cent), sales (46 per cent) and marketing (33 per cent) are particularly in demand. However, the visa process means that top international talent is often hired elsewhere before German companies even receive an answer from the embassy.
‘Our processes are too slow,’ criticises Magdalena Oehl, Deputy Chairwoman of the German Startup Association, in the context of the study publication: ’Without digitalisation and simplification, we are squandering our opportunities in global competition.’
Growth needs support – and the courage to change
The figures speak for themselves: 93 per cent of scaleups recruit internationally, primarily in South Asia and North America. This shows how important a modern immigration system is. ‘Germany is heading into a major labour shortage with its eyes wide open,’ warns Sebastian Dettmers, CEO of the Stepstone Group. But the companies themselves are prepared to take responsibility: 71 per cent of scale-ups would be prepared to speed up visa procedures – if they were allowed to.
Germany remains attractive – but for how much longer?
There is good news: Germany’s quality of life, security and stability continue to win over international talent. But that alone is not enough if access to this talent is blocked by lengthy and complicated visa processes. The shortage of skilled labour threatens to stall the growth engine of start-ups and scale-ups.
Now is the time to act. We need an immigration system that reflects the speed and flexibility of startups. The challenges are great, but with a clear focus on international talent and closer integration of networks such as the Startup Port, we can ensure that Germany not only survives, but grows as a centre of innovation.
To the study: International talent as a growth factor – scaling in startups and scaleups
