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WORKING IN GERMANY

‘Immigration miracle’: How Germany’s foreign STEM workforce has grown in a decade

The number of foreign employees with STEM jobs in Germany has significantly gone up over the last decade. A new study reveals where workers originate from, where they're settling and how they are contributing to the economy.

Two Blue Cards for foreign skilled workers are on a table at the Federal Office for Migration and Refugees in Bavaria.
Two Blue Cards for foreign skilled workers are on a table at the Federal Office for Migration and Refugees in Bavaria. Photo: picture alliance/dpa | Daniel Karmann

Immigration has long been a hot-button topic in Germany. And with the anti-immigration party Alternative for Germany (AfD) seeing rising support recently, foreign nationals may be feeling a little concerned. 

However, a new study highlights the contribution that foreign nationals have made in the workforce – specifically in STEM (science, technology, engineering and maths) professions, an acronym known as MINT in Germany. 

‘A small German immigration miracle’, is how business magazine WirtschaftsWoche described the phenomenon of the rising number of employees in technical and scientific professions from abroad.

“When global corporations like Intel or TSMC come to Germany, they also need experts to work for them,” said WirtschaftsWoche in a report published on Friday August 25th.

“The planned Intel plant is expected to create up to 20,000 new jobs in Magdeburg alone. In Germany, a country with a shortage of skilled workers? This is a problem. But a study by the Institute of the German Economy (IW), which is exclusively available to WirtschaftsWoche, shows what an important contribution immigration already makes. In the past 10 years, Germany has experienced an immigration miracle, albeit a relatively small one.”

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How have foreigners contributed to STEM in Germany?

According to the study, the number of employees from abroad in STEM professions in Germany has increased by around 190 percent from around 70,000 at the end of 2012 to almost 202,000 professionals at the end of 2022.

The 132,000 additional foreign employees – with jobs such as IT specialists, industrial engineers and scientists – contribute about 16 billion euros per year to Germany, the research found. The proportion of foreigners within STEM has almost doubled within 10 years from 6.5 to 12.7 percent. 

Tesla workers put the finishing touches on a new car

Tesla workers put the finishing touches on a new car at the company’s Brandenburg plant. The number of foreign employees in this area has risen due to the car manufacturing setting up there. Photo: picture alliance/dpa | Patrick Pleul

Overall, employment in STEM professions in Germany rose from over one million to more than one and a half million, an increase of almost 50 percent.

Where are workers coming from – and which areas are they settling in?

Immigration from non-EU countries to Germany’s STEM workforce is particularly high. It has more than quadrupled from over 30,000 in 2012 to almost 122,000 by the end of 2022. The front-runner for origin countries is India with an increase of 635 percent – from 3,750 to over 27,500 skilled workers at the end of 2022.

READ ALSO: Germany sees ‘over 550 percent ‘ increase in IT workers from India 

People from Central and South America are next, increasing from 2,310 in 2012 to 9,870 workers in 2022. North Africa is the third highest origin country – going from 1,270 STEM workers in 2012 to 8,050 in a decade. 

A similar picture emerges among engineers. Here, the proportion of foreigners in Germany grew from 6 to 10.5 percent between 2012 and 2022. But there are large regional differences. The proportion of foreigners in engineering professions is particularly high in Starnberg (27.4 percent), the Main-Taunus district (22.3 percent), Munich and the surrounding area (22.6 percent) and Berlin (19 percent).

It’s a mixed picture in eastern Germany. The share of foreigners in engineering jobs is much lower in Mecklenburg-Western Pomerania (3.9 percent), but in Brandenburg it’s almost twice as high at 7.4 percent.

The Ilm district in Thuringia, where the share of foreign engineers has grown from under five percent to over 22 percent in the past 10 years also stands out. According to the authors of the study, this is due to the many graduates of the TU Ilmenau and foreign companies setting up there. 

The example of the Tesla plant in Grünheide in the Oder-Spree district shows that large international companies are reinforcing the trend. There, the proportion of foreign engineers rose abruptly after the car manufacturer set up shop. 

Whether this is also to be expected in Magdeburg or Dresden, where the chip companies Intel and TSMC want to launch remains to be seen. At the end of 2022, the proportion of foreigners in engineering professions in Magdeburg was just 4.7 percent.

Meanwhile, Germany is continuing its push to increase immigration from abroad to help ease the worker shortage. 

In June, the government approved a new skilled immigration law designed to cut red tape and encourage more immigration from abroad. 

READ ALSO: When will Germany’s new immigration rules come into force?

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READER INSIGHTS

‘Prepare for lots of paperwork’: What it’s like to be self-employed in Germany

Being self-employed or freelance in Germany has lots of positives but it can also be costly and difficult - especially during an economic slump. The Local readers share what it's like working for yourself in Germany in 2024 along with their advice.

'Prepare for lots of paperwork': What it's like to be self-employed in Germany

Working for yourself in Germany can be a rewarding experience. But it’s fair to say that being self-employed is not for the faint-hearted.

With a lot of bureaucracy to wade through and high costs, those who decide to go it alone – whether through setting up a business or as a freelancer – can face hurdles.  

And it can get even more tricky during a cost of living crisis. A recent survey found that many self-employed people are facing difficulties finding assignments as Germany’s economy has slumped. 

READ ALSO: Almost half of freelancers in Germany struggling to find assignments

The Local asked readers to share their experience of being self-employed in Germany, what changes they’d like to see and their tips for others who are considering going down this path.  

‘Golden era is over’

There were mixed views on how the situation stands at the moment, although most said they had seen a dip in the market.

Freelance language teacher Joe, 54, based in Munich, said demand was still there “but less budget seems to be affecting some clients”. 

Andrew, 39, in Berlin, who is a freelance web developer, said “The tech market is tough right now, with the ‘golden era’ of the 2010s being over.

“I blame massive VC over-investment creating unrealistic demand in 2020 and now companies are cutting back.”

READ ALSO: Everything you need to know about becoming a freelancer in Germany 

Others said the slowdown was improving.

“I have a steady work stream for now and the market seems to be slowly improving, but there was a sharp downturn towards the end of 2021 and the market has been very noticeably harder since then,” said Michele, 33, who’s based in Berlin and is a freelance software engineer.

‘More difficult finding German clients’

Lots of people said they were looking for clients outside Germany.

Haylee, 34, a copywriter in Berlin, said competition was “super high” right now. 

“Luckily I can look for jobs in my home country (Australia) as well,” she said. 

Luc, 58, who’s based in Munich and works in business development for life sciences said it has been “more difficult to find German clients, but easier finding clients located in Asia that are looking for European entry and support”.

Self-employed or an employee? Being self-employed can be tricky but rewarding in Germany.

Self-employed or an employee? Being self-employed can be tricky but rewarding in Germany. Photo: picture alliance / dpa-tmn | Andrea Warnecke

For Erica, 40, looking outside Germany has also been a way for her to keep a steady stream of work.

The self-employed copywriter in Berlin said: “I have had a lot of prospects, new projects and clients in the past two years. I work across the US, UK and EU markets, among others, so I am not directly reliant on German clients. While other freelancers limited to the tech or generic marketing sectors have faced a downswing, my sector (corporate sustainability) is very active.”

Another respondent, Alex, 40, in Berlin, who works as a consultant for digital product development said it was harder to find assignments and that there was a higher expectation on creating content. 

Advances in technology are also a factor. A writer and journalist who has been freelancing for several years told us: “Several side gigs have been replaced by generative AI (blog posts and white papers).”

‘Everything falls on the freelancer’

When asked how Germany fares as a country to be self-employed in, respondents said it isn’t easy. 

“Compared to being a salaried employee it’s not that great,” said language teacher Joe in Munich. 

Most people mentioned the high cost of health insurance and other insurance contributions, as well as the extra paperwork. Others said it has become more difficult to find a tax advisor, and urged Germany to make processes around self-employed and freelance policies simpler. 

Gordon Barnes, 50, in Munich, who is an IT consultant said the biggest problem about being self-employed in Germany is “around pension and retirement planning”

“Everything is on the freelancer without any support,” he added. 

Jason Wright, 46, a freelance motorsport design engineer based in North Rhine-Westphalia said those going it alone need to be “prepared for a lot of paperwork and strict constraints on how you operate on a day-to-day basis”.

He said he’d like to see more support available in English “especially from the tax authorities”. 

READ ALSO: How to get a freelance visa for Germany from outside the EU

A woman working on her laptop.

A woman working on her laptop. Photo by Marcus Aurelius: https://www.pexels.com/photo/woman-using-macbook-pro-4063697/

Consultant Mike Moseley, 66, in Mülheim un der Ruhr, said he found the process of registering as self-employed and doing tax returns “intimidating”. 

Michele in Berlin said taking the first steps to becoming a freelancer in Germany is hard.

“This is not my first freelancing stint, so I’m quite accustomed to the processes, but the entry barrier is still fairly high,” said Michele.

Andrew in Berlin said, however, that once you get a tax advisor and fill in the correct registration forms, “it’s generally pretty straight-forward”.

Get a tax advisor, save and network

Many respondents advised getting professional advice on taxes. 

Alex in Berlin recommended networking to meet and talk with other freelancers, getting a separate bank account and trying to get a tax advisor “as soon as possible”. 

A few respondents to our survey recommended those who are eligible to apply for Germany’s artist social insurance fund, known as the Künstlersozialkasse (KSK), which provides artistic freelancers with an affordable way into the social insurance system.

“You can get copies of the application form in English if you need it, said a writer who wished to remain anonymous.

READ ALSO: KSK – How creative freelancers can pay less for German health insurance

The Local readers also recommended saving.

“Be sure to put something aside each month for retirement,” said Richard, 70, in Frankfurt.

Andrew in Berlin said people should set aside 25 percent of their income from the start for taxes, adding: “Another 20 percent will likely go to the Krankenkasse!”

Meanwhile, Erica in Berlin advised people to “think strategically through all aspects of business” when they venture into freelancing.

“Explore different pricing models beyond hourly, which doesn’t reward high experience or efficiency,” she said. “Connect with high-earning freelancers in your field and learn from them. Set boundaries with clients on timelines, scope, and service offers. Develop your own policies and processes to lead client engagements.”

Ultimately, the additional effort required to freelance makes some question if it’s worth it. Joe in Munich said: “Do whatever you can to avoid it…there is a lot of administration.”

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