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How successful was the German Green Card?


1.11.2005
From August 2000 to July 2003, 14,876 work permits were issued on the basis of the Green Card regulation. The majority of ICT experts were employed by companies in Bavaria (25%), Baden-Württemberg (19%), Hesse (24%) and North Rhine-Westphalia (15%).

Thus the initial desired quota of 20,000 experts, as well as the considerably higher estimates within economic circles, went greatly unmet. Declining economic development in the sector, particularly apparent following the 90s boom, contributed greatly to the low number of permits issued. Following a period of considerable growth in the second half of the 1990s, the ICT sector regressed significantly from 2002 to 2003.

Countries of origin for the ICT recruitsCountries of origin for the ICT recruits Lizenz: cc by-nc-nd/2.0/de (bpb)
The diagram shows the countries of origin for the ICT recruits. The majority came from Eastern Europe.

A comparison between the target quota, in combination with the economy's estimates, and the actual number of Green Cards authorised led to an assessment that generally considered the programme a failure. A closer look at the figures and facts surrounding the Green Card programme, however, brings to light a more differentiated perspective.

When one considers the figures in terms of the size of the enterprises, it becomes clear that the IT-ArGV was taken advantage of mainly by SMEs, i.e. companies with fewer than 500 employees (see table). These companies applied for 11,368 work permits, which accounts for 75% of all permits granted. Companies with more than 500 employees (primarily multinational conglomerates) obtained only 25% of the permits. This is all the more astounding because, according to BITKOM, the 20 largest ICT firms (SAP, Deutsche Telekom, Siemens, IBM, Sun Microsystems, Microsoft, Intel, Vodafone, et al.) generate 70% of total revenue in this sector. The low number of international ICT experts hired seems, therefore, to conflict with both the companies' market positions and the market's oligopolistic structure. The major corporations were either not interested to the same degree in this recruiting opportunity or not dependent on it. It was the low demand for Green Cards from large companies, in particular, that was later commonly interpreted by the media as a sign of the Green Card initiative's failure.

At this point the question arises as to why globally operating corporations failed to take greater advantage of the recruiting tool they so desperately seemed to need?

The key to answering this question lies in the growing importance of internal, transnational labour markets within individual corporations. Multinational corporations have created their own institutional channels to steer the migration of the highly qualified. They have, thereby, created their own instrument for human capital transfers and are not, to the same degree as small companies, forced to rely upon external methods like the Green Card to recruit international specialists.

The legislative framework for intra-corporate labour markets was created in 1998 via the enactment of two regulations. Both regulations made work permits possible for international personnel (Art. 4, paragraphs 7 und 8 ASAV [1]; Art. 9, paragraph 2 ArGV [2]). They aimed to ensure a fast and non-bureaucratic transfer of staff within a corporation. In contrast to these regulations, the external recruitment of international specialists took place via a time-consuming and bureaucratic process before the introduction of the Green Card.

NationalityIn %TotalCompanies with ... employees
less than 100100 to 500more than 500
India26,43.9262.478866581
Russia, Belarus, Ukraine, Baltic States12,61.8741.237268370
Romania7,01.039624195220
Czech / Slovak Republic6,6983169659151
Ex-Yugoslavia5,1756434105217
Hungary3,451032279109
North Africa (Morocco, Algeria, Tunisia)2,94322622772
Bulgaria2,94312934692
South Africa2,638918368138
Pakistan1,42111362154
Not specified29,14.3252.2126921.421
Total10014.8768.8052.5633.508
  100%59,2%17,2%23,6%
Source: German Federal Employment Agency (Bundesagentur für Arbeit)

The Green Card was, for this reason, an effective medium for restoring equal opportunity to competing ICT companies, in particular equality for companies of all sizes. Before its introduction, the global ICT players, who had an obvious edge over SMEs, were clearly winning the race. SMEs were forced to demonstrate, via a laborious procedure, a "public interest" in hiring international employees (Art. 5, paragraph 2 ASAV). The Green Card can, therefore, be seen to represent the structural equivalent of a pendant to internal labour markets of multinational corporations. This explains the disproportionately high use of this instrument by SMEs.


Fußnoten

1.
Regulation Governing Exemptions to the Ban on Foreign Recruitment (Anwerbestopp-Ausnahmeverordnung, ASAV)
2.
Regulation Governing Work Permits for Foreign Workers (Arbeitsgenehmigungsverordnung, ArGV).

 

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