Skills shortage: a threat to Germany’s startup momentum

Startups and scaleups are the stars of the German economy – dynamic, innovative and growth-oriented. 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 workers. For 60 percent 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 and focus on the role of international talent. If these are missing, the industry is in danger of running out of steam – and that would be fatal for Germany as a location for 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 percent), sales (46 percent) and marketing (33 percent) are particularly in demand. However, the visa process often means that top international talent is hired elsewhere before German companies even receive an answer from the embassy. “Our processes are too slow,” complains Magdalena Oehl, Deputy Chairwoman of the Startup Association, in the context of the study publication: “Without digitalization and simplification, we are squandering our opportunities in global competition.”

Growth needs support – and the courage to change

The figures speak for themselves: 93% 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 labor shortage with its eyes wide open,” warns Sebastian Dettmers, CEO of the Stepstone Group. However, the companies themselves are prepared to take responsibility: 71% of scale-ups would be prepared to speed up the visa process – if they were allowed to.

Germany remains attractive – but for how much longer?

Germany’s quality of life, security and stability continue to attract 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 workers 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 a closer integration of networks such as the Startup Port, we can ensure that Germany not only survives, but grows as a location for innovation. To the study: International talent as a growth factor – scaling in startups and scaleups