19 percent of all German companies are started by a migrant. Wait, migrants started 44 percent of all German companies inn 2015. No, 90 percent of entrepreneurs in Germany were born in Germany. Feeling confused? Within two years these numbers are published by DIHK, Die Zeit and Singa-Deutschland.
Do migrant entrepreneurs create jobs? Are they the growth engine in the economy, or are most of the migrants self-employed one-man bands? Look at the research reports and it is not easy to figure out what to believe.
How do others define migrants?
One challenge is how we define migrants. In Germany a “migrant” is defined by the Statistischen Bundesamtes as a person „that after 1949 moved into the current area of the Bundesrepublik Deutschland, and all people born Germany with a foreign passport, or with a german passport, but at least foreign parent“
With this definition one in five Germans have a migrant background – and in West Germany it is one in four.
In Norway a migrant “innvandrer” is a person who has moved to the country with or without a Norwegian passport, while a person with a migrant background is like the German definition. In the UK the Office for National Statistics (ONS) uses the UN definition of ‘long-term international migrant’: “A person who moves to a country other than that of his or her usual residence for a period of at least a year [….] so that the country of destination effectively becomes his or her new country of usual residence”. However, the Labour Force Survey (LFS) and the Annual Population Survey (APS), comprehensive sources of data on workers and labour markets in the UK, define a migrant as someone born out side the UK, but who might have a British Passport.
A major challenge to this is of course that when reading a headline like “Migrants are more likely to be entrepreneurial than Germans” no one believe it refers to a migrant born in 1960 Germany with a German mother and a Norwegian father. At Unternehmer ohne Grenzen in Hamburg believes the definition of migrants is useless in explaining how entrepreneurial migrants are.
However – there are some other stats which at least tell us something more. The publication The Startup Heat Map 2017 points out that 24 percent of European founders moved from one European country to another for better conditions.
In London, 54 percent of all founders are foreign born and in Berlin the number is 44. In the Nordics the number of foreign born founders is 25 percent while Central Europe and the Mediterranean have 8 and 11 percent foreign born founders. One striking fact is that most of the “migrants” are European. Only 36 percent of European founders are born outside the EU, and this number might include Norway, Iceland, Switzerland and the Balkans.
Living in Berlin one also gets the impression that there are quite a few Americans and Canadians running around the place, but looking at the stats it is safe to say that the successful migrants in Europe are other Europeans.
Our take on migrants
In Startup Migrants we define all people who have moved from one country to another as a migrant. There are however three different kinds of migrants in Europe.
- European EEA members who move between countries
- Non-EEA members
All migrants will have certain challenges. They will have to deal with government officials in a foreign language and they will have to understand the difference business laws, regulations, tax policies and so on. Starting a company in Germany is harder for a Norwegian than starting it in Norway. But for an EEA migrant that is the only challenge: an EEA migrant automatically has a work and residential permit.
Migrants from outside the EEA face different challenges as they need to get a Visa – and a work permit. In Europe there are different laws regulating how a non-EEA migrant might get VISAs and work permits. In general, the easiest way is to have a job when you apply for a working permit. In some countries non EEA migrants have to take language courses – in others they do not need to.
Finally, there are refugees. They apply for asylum. While they are waiting for their application to get processed they live in camps. If asylum is granted they will most likely be taken care of by the state, but laws differ between countries. In countries like Norway and Germany they get placed communities in different municipalities where they must take an integration course. In Sweden they can to a greater extent find their own flat where they prefer.
In general, it is the refugees who struggle the most starting a company or getting a job. On the European level The OECD report “How are refugees faring on the labour market in Europe” from 2015 pointed out that Less than half (45%) of refugees in the EU reported to have at least an advanced knowledge of the host-country language, compared with two thirds of other migrants from non-EU countries. There is reason to believe that their findings will hold through. They also point out:
The employment rate of refugees varies widely across Member States. In Belgium, France, Italy, Croatia and Slovenia, refugees fare better than other non EU-born migrants. Inversely, in Finland, the United Kingdom, Spain and Portugal the employment rate of refugees is lower by at least 10 percentage points (Figure 10). Only around 40% of refugees are employed in Spain and Finland compared to 66% in Switzerland and more than 60% in Italy, Greece and Malta. Including refugees who were born in (the current borders of) the European Union significantly increases the average employment rate of refugees, notably for Switzerland and Slovenia where it reaches 78% and 74%, respectively
This year the renowned German institution IAB found that 25 percent of the refugees that arrived in 2015 had gotten a job.
Our conclusion so far
Recognizing that there is a general gap in European understanding around who is contributing where and what obstacles they are facing, Startup Migrants is aiming to gather and analyze current data on the topic. As the European market demands changes in policy, regulation and vision towards the future of more diverse pool of entrepreneurs, we hope to contribute to a strong understanding of this topic.