Why German Business Supports, Trains and Hires Syrian Refugees

Germany took in a million Syrian refugees in 2015, buoyed by the knowledge that these people could contribute strongly to the country’s economy. But has it worked out as successfully as hoped? Rebecca Henderson discusses what it takes to integrate a huge number of new people, and the role business can play.

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This transcript has been edited for length and clarity

Mohammed Bouazizi lived in a modest home, a 20-minute walk from the center of Sidi Bouzid, Tunisia, making his living selling produce from a pushcart. Like many street vendors, he was often harassed by the local police. On December 17, 2011, when he was unable to pay a bribe demanded by the police, they assaulted him and confiscated his cart and merchandise.

Bouazizi went directly to the local governor to report the incident but was turned away. In an act of utter desperation, he doused himself in gasoline and set himself on fire on the steps of the governor's office. By taking his own life in this horrific and very public way, Bouazizi sparked a series of events that would spread across six countries and affect the lives of millions around the world.

Today we'll hear from Professor Rebecca Henderson about her case study entitled, German Business and the Syrian Refugee Crisis. I'm your host, Brian Kenny, and you're listening to Cold Call.

Professor Henderson's work explores how organizations respond to large-scale technological shifts, particularly in regard to energy and the environment. She also created the Reimagining Capitalism: Business and Big Problems course in the MBA program. Thanks for joining us today.

Rebecca Henderson: Thank you, Brian. I'm delighted to be here.

Kenny: This seems a little far afield from business and sustainability and the topics we normally associate with your work, so I'm curious about the motivation behind the case. We'll get to that, but before we go there, I mentioned the incident that took place in Tunisia which sparked the beginning of the Arab Spring. Can you just remind our listeners the context for the Arab Spring and what that started?

Henderson: Sure. As I'm sure many people remember, before the Arab Spring, most of the Middle Eastern nations were run by autocrats. There was very little democracy and very little popular engagement in government. The Arab Spring, which rapidly spread from that tragic incident that you described to Libya and Egypt and then to Syria and other countries in the region, was really a movement trying to bring more democracy to the Middle East. Unfortunately, it has chalked up very few successes and in many cases has led to havoc. The Syrian refugee crisis is the most obvious example of that.

Kenny: Within the first two paragraphs of the case, it becomes obvious just how complicated this is and how many different groups are involved.

Henderson: I was afraid you were going to ask me exactly who's fighting in Syria about what, and I thought, "I hope he doesn't ask me that question." It's very complicated. Basically the existing power structure was destabilized, leading to extensive civil war in Syria. Millions of people have been displaced. There are nearly five million people in the surrounding nations, in countries like Jordan, and who knows when they'll be able to go back to their homes. It's really an awful situation.

Kenny: And still very much in the headlines on a daily basis.

Henderson: Absolutely, because many of them are trying to move north.

Kenny: What was the motivation for this? It doesn't seem like it's in your sweet spot.

Henderson: No, it's a great question. Reimagining Capitalism has the subtext "business and big problems," and we really focus on two big problems. The first is environment, which you know of from my work, but the second is inequality. These are both enormous problems of the public good, and we ask what can business do? This case is really about German business' response to the migration crisis, to the emigrant crisis. That is, can we find a way to bring immigrants, often desperate people, into the mainstream of the economy?

It was also an opportunity to talk a little bit about how German labor relations work, which is a little bit different from the US, and really puts on the table what seemed to us a great example of a business stepping forward and saying here's a big problem, we can make a difference.

Kenny: I'm thinking about this in the current political context that we're in. We've got a new president; this president has made immigration one of his platforms. The way that he's approaching it is the complete opposite of the way that Angela Merkel approached it. Talk to us about the German landscape, and why she chose to approach it this way and how she engaged business.

Henderson: It is fascinating, and I think it's important to be aware that with the possible exception of Canada, Germany has been the most welcoming economy to immigrants of any developed economy. The roots of this I think are complicated because, as a horrible generalization, Germans have a very strong sense of German-ness and they're very proud of being German. They're very proud of their German culture and heritage. At the same time—and I'm not an expert, but this is my sense—there seemed to be two important forces that have really supported Angela Merkel in making these decisions.

It should be clearer that although she's had some negative response from the right, the vast bulk of Germans remain very open to immigrants, and in particular to refugees who are being persecuted. That is, they think they have a very strong duty to provide safe harbor to refugees. They're a little more ambivalent about how many of those refugees they want to stay, but the idea that they should provide a safe space for them is very much in the German culture. There have been some nice studies of this.

What makes Germany different? I think one is a very strong sense that refugees and immigrants bring something very important to the community. There's always been tension in Germany between native Germans and the so-called guest workers, the Turks, but as the German economy has continued to perform at extremely high levels, and as it's become clear—because Germany has the lowest birth rate in the rate in the world, lower even than Japan—that if they're to renew their society they must embrace immigrants, that German society has begun to do that.

One of the things they do very much is really push and encourage the learning of German and the assimilation of immigrants into the society. I think it's these twin forces. One is a very strong moral belief that you owe refuge to refugees, and the other is an awareness that they can play a really positive role in the society. Certainly that's something that German business believes.

Kenny: Business had another motivating factor here, which was the fact they had a lot of jobs available and they didn't have people to fill them.

Henderson: This is the other side of the low birth rate, right? Germany has one of the lowest unemployment rates in the world, and they really need skilled labor. Finding people to fill those jobs is a huge inducement, and here are all these people, some of whom are incredibly highly trained and very highly motivated. Anyone who fights their way to Germany from Syria has got something. Absolutely, they thought these would be good candidates for the unfilled positions.

Kenny: I've heard you talk about the fact before in your work around sustainability that businesses won't do this because it's the right thing to do necessarily, or because it's altruistic to do it; they'll do it because it makes good business sense. To me, it seemed in this case like business was really behind this program because they saw that in the long term it was going to benefit them.

Henderson: I think that's exactly right. There's certainly a long-term labor crunch in Germany coming, and to the degree that Germany can bring in people who are really going to do the work and are excited and can take these jobs, they have a very strong business case.

There's another aspect to the business case which I think is important, which is German business has a very close relationship with German labor. Labor unions are very strong in Germany. There's always a balance between being close to labor, but some businesspeople might feel ambivalent about labor becoming too powerful. If you can expand the size of the workforce, if you can bring in new people—not that I'm suggesting in any way that the German business is moving away from those close relationships with unions—but it's always helpful to have a little bit of slack and a little bit of play in the system. I think that might also have been one of the motivations.

Kenny: What about the apprenticeship program in Germany?

Henderson: It’s interesting. One of the issues in integrating refugees into German society has been persuading them to go into apprenticeship programs. In Germany, when you're in high school you can choose to go to a conventional high school, something that looks like a school we might have in the US, or you can choose to do more technical training and then go into an apprenticeship program with a German firm. Apprenticeship programs are on-the-job training in a range of skills required, usually by industry. The apprenticeship programs are usually coordinated by an industry rather than by a particular firm. As a worker, you're on the job, you're getting the training you need.

It has a number of interesting features. One is, you can imagine that if no other firms are hiring apprentices, it might be difficult for me to start an apprenticeship program because I think I'd train people and they'd just leave for my competitors. One of the strengths of the German system is that by investing in it at the industry level and by having all the firms in the industry commit to taking part, you take that issue off the table. What that leads you to is a much more highly educated workforce that is trained in the skills you need.

When you think about some of the issues in the US, we have one of the highest levels of college graduation rates in the world but it appears that many of our graduates don't have the skills that business needs. What the apprenticeship program does in Germany is really provide a pipeline for those skills. The other thing it does, which is another reason I was so excited to teach the case, is it's aimed at people who might otherwise not get high-paying or interesting or remunerative work.

When we think about really well-paying, engaged blue-collar jobs, Germany has probably the highest concentration in the world. Germany is the third largest exporter of manufacturing products in the world, which is incredible given the size of their economy. They have many firms that are global giants in manufactured components, in machinery, in very high-tech stuff. There's a lot of reason to believe that's the apprenticeship program. The apprenticeship program is core to Germany's success. It's also very interesting, because if you could get refugees and immigrants into these programs, then you could perhaps train them and bring them into the mainstream of German society in a very positive way.

Kenny: You mentioned before, the whole notion of assimilation and how important that was to make this succeed.

Henderson: The Germans are reaching out, both very concretely, "Here are jobs, join the apprenticeship program, and "here are language programs, we're going to train you." German society is very much hoping to assimilate these refugees, and German business has a strong business case to do so. May I say that one of the strengths of the American assimilation of refugees and immigrants has been historically that there have been jobs for them and ways up. Of course, as many people have said, one of the reasons we're having so much trouble is as pathways to advancement start to close off, people start to see immigrants as competition.

Kenny: You wrote this case in 2015. It's been a couple of years since then. How is it going in Germany?

Henderson: It's not going as well as the initial discussion suggested it might. There seem to be a number of issues. One, paradoxically, is the refugees are reluctant to enter the apprenticeship programs. The stipend in an apprenticeship program is about a third of what you can gain in just a simple manual job, so the refugees who often desperately need money are tempted to just take the manual labor and get the money right now. Really, to do an apprenticeship is to invest in your long-term future, and they don't come from an environment in which that concept was well understood, and they're not supported by a society or family that understands that, yes, you do your apprenticeship and be paid a little bit less. That's been an unexpected hurdle.

Another has been that… The case talks about the need to introduce more flexible labor regulation and more certainty around which refugees will stay and which will not. As I understand it, there's still some significant confusion there, and so businesses want clarity before they start to invest in refugees. They want to know they're going to be around.

Last but not least, there is a significant amount of tension in the society around the place and nature of these refugees.

Kenny: As there is everywhere in the world, really.

Henderson: When you think that Germany took a million Syrian refugees in 2015, and just under another million or maybe a bit over last year, I mean that's a huge amount. I mentioned that Canada is perhaps the only other country that shares with Germany the ability to really assimilate immigrants on a huge scale. Well, last year Canada took 300,000 refugees and immigrants. Canada's population is not that much smaller than Germany's, and Canada's a well-known success. Here's Germany taking literally millions of people, so it is creating some stress.

I think what's exciting is that German business remains strong in its commitment to doing this. They certainly want to play an important role. It turns out that when you look at where the refugees have been finding jobs, most of them have not come through this route though, but through informal networks—through individuals reaching out to the refugees, through churches, through social connections. That's one of the levers the German government is really pushing, is encouraging individuals to come forward and get to know some of the refugees, and maybe I can find a place for you here, or my brother Joe has a job.

I guess it's always about the human connection. Instead of a feared stranger, you have a person who's in dire need and can use your help, and that makes all the difference.

Kenny: Back to the classroom, then. You've taught the case?

Henderson: I have. It went extremely well. The students are deeply intrigued by whether the German system might be a useful way of addressing inequality in other parts of the world. This idea that German business thinks about the welfare of the industry and invests in training that supports the well-being of the entire industry, and does it in a way that reaches the very people who could be really superb skilled workers, that's a very intriguing thought.

Some of the students find it very attractive; some of the students are concerned that perhaps you're streaming people into more manual positions. I think that's a misconception. No one goes into apprenticeship without choice. The idea that these jobs are (just) turning a bolt is really not the case. These are very complicated, sophisticated jobs, which is one of the reasons that Americans are having trouble finding people to fill their equivalents in this country. There's a lot of interest in that.

There's also of course a lot of interest in the kind of collective national response, this idea that Germany responds as a whole to the Syrian crisis. In this time of deep partisanship in our own country, I think the idea that business could be part of supporting a strong bipartisan conversation about the right thing for the nation to do is also very intriguing.

Kenny: You can find this case along with thousands of others in the HBR case collection at HBR.org. I'm Brian Kenny, and you've been listening to Cold Call, the official podcast of Harvard Business School.

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This transcript has been edited for length and clarity

Mohammed Bouazizi lived in a modest home, a 20-minute walk from the center of Sidi Bouzid, Tunisia, making his living selling produce from a pushcart. Like many street vendors, he was often harassed by the local police. On December 17, 2011, when he was unable to pay a bribe demanded by the police, they assaulted him and confiscated his cart and merchandise.

Bouazizi went directly to the local governor to report the incident but was turned away. In an act of utter desperation, he doused himself in gasoline and set himself on fire on the steps of the governor's office. By taking his own life in this horrific and very public way, Bouazizi sparked a series of events that would spread across six countries and affect the lives of millions around the world.

Today we'll hear from Professor Rebecca Henderson about her case study entitled, German Business and the Syrian Refugee Crisis. I'm your host, Brian Kenny, and you're listening to Cold Call.

Professor Henderson's work explores how organizations respond to large-scale technological shifts, particularly in regard to energy and the environment. She also created the Reimagining Capitalism: Business and Big Problems course in the MBA program. Thanks for joining us today.

Rebecca Henderson: Thank you, Brian. I'm delighted to be here.

Kenny: This seems a little far afield from business and sustainability and the topics we normally associate with your work, so I'm curious about the motivation behind the case. We'll get to that, but before we go there, I mentioned the incident that took place in Tunisia which sparked the beginning of the Arab Spring. Can you just remind our listeners the context for the Arab Spring and what that started?

Henderson: Sure. As I'm sure many people remember, before the Arab Spring, most of the Middle Eastern nations were run by autocrats. There was very little democracy and very little popular engagement in government. The Arab Spring, which rapidly spread from that tragic incident that you described to Libya and Egypt and then to Syria and other countries in the region, was really a movement trying to bring more democracy to the Middle East. Unfortunately, it has chalked up very few successes and in many cases has led to havoc. The Syrian refugee crisis is the most obvious example of that.

Kenny: Within the first two paragraphs of the case, it becomes obvious just how complicated this is and how many different groups are involved.

Henderson: I was afraid you were going to ask me exactly who's fighting in Syria about what, and I thought, "I hope he doesn't ask me that question." It's very complicated. Basically the existing power structure was destabilized, leading to extensive civil war in Syria. Millions of people have been displaced. There are nearly five million people in the surrounding nations, in countries like Jordan, and who knows when they'll be able to go back to their homes. It's really an awful situation.

Kenny: And still very much in the headlines on a daily basis.

Henderson: Absolutely, because many of them are trying to move north.

Kenny: What was the motivation for this? It doesn't seem like it's in your sweet spot.

Henderson: No, it's a great question. Reimagining Capitalism has the subtext "business and big problems," and we really focus on two big problems. The first is environment, which you know of from my work, but the second is inequality. These are both enormous problems of the public good, and we ask what can business do? This case is really about German business' response to the migration crisis, to the emigrant crisis. That is, can we find a way to bring immigrants, often desperate people, into the mainstream of the economy?

It was also an opportunity to talk a little bit about how German labor relations work, which is a little bit different from the US, and really puts on the table what seemed to us a great example of a business stepping forward and saying here's a big problem, we can make a difference.

Kenny: I'm thinking about this in the current political context that we're in. We've got a new president; this president has made immigration one of his platforms. The way that he's approaching it is the complete opposite of the way that Angela Merkel approached it. Talk to us about the German landscape, and why she chose to approach it this way and how she engaged business.

Henderson: It is fascinating, and I think it's important to be aware that with the possible exception of Canada, Germany has been the most welcoming economy to immigrants of any developed economy. The roots of this I think are complicated because, as a horrible generalization, Germans have a very strong sense of German-ness and they're very proud of being German. They're very proud of their German culture and heritage. At the same time—and I'm not an expert, but this is my sense—there seemed to be two important forces that have really supported Angela Merkel in making these decisions.

It should be clearer that although she's had some negative response from the right, the vast bulk of Germans remain very open to immigrants, and in particular to refugees who are being persecuted. That is, they think they have a very strong duty to provide safe harbor to refugees. They're a little more ambivalent about how many of those refugees they want to stay, but the idea that they should provide a safe space for them is very much in the German culture. There have been some nice studies of this.

What makes Germany different? I think one is a very strong sense that refugees and immigrants bring something very important to the community. There's always been tension in Germany between native Germans and the so-called guest workers, the Turks, but as the German economy has continued to perform at extremely high levels, and as it's become clear—because Germany has the lowest birth rate in the rate in the world, lower even than Japan—that if they're to renew their society they must embrace immigrants, that German society has begun to do that.

One of the things they do very much is really push and encourage the learning of German and the assimilation of immigrants into the society. I think it's these twin forces. One is a very strong moral belief that you owe refuge to refugees, and the other is an awareness that they can play a really positive role in the society. Certainly that's something that German business believes.

Kenny: Business had another motivating factor here, which was the fact they had a lot of jobs available and they didn't have people to fill them.

Henderson: This is the other side of the low birth rate, right? Germany has one of the lowest unemployment rates in the world, and they really need skilled labor. Finding people to fill those jobs is a huge inducement, and here are all these people, some of whom are incredibly highly trained and very highly motivated. Anyone who fights their way to Germany from Syria has got something. Absolutely, they thought these would be good candidates for the unfilled positions.

Kenny: I've heard you talk about the fact before in your work around sustainability that businesses won't do this because it's the right thing to do necessarily, or because it's altruistic to do it; they'll do it because it makes good business sense. To me, it seemed in this case like business was really behind this program because they saw that in the long term it was going to benefit them.

Henderson: I think that's exactly right. There's certainly a long-term labor crunch in Germany coming, and to the degree that Germany can bring in people who are really going to do the work and are excited and can take these jobs, they have a very strong business case.

There's another aspect to the business case which I think is important, which is German business has a very close relationship with German labor. Labor unions are very strong in Germany. There's always a balance between being close to labor, but some businesspeople might feel ambivalent about labor becoming too powerful. If you can expand the size of the workforce, if you can bring in new people—not that I'm suggesting in any way that the German business is moving away from those close relationships with unions—but it's always helpful to have a little bit of slack and a little bit of play in the system. I think that might also have been one of the motivations.

Kenny: What about the apprenticeship program in Germany?

Henderson: It’s interesting. One of the issues in integrating refugees into German society has been persuading them to go into apprenticeship programs. In Germany, when you're in high school you can choose to go to a conventional high school, something that looks like a school we might have in the US, or you can choose to do more technical training and then go into an apprenticeship program with a German firm. Apprenticeship programs are on-the-job training in a range of skills required, usually by industry. The apprenticeship programs are usually coordinated by an industry rather than by a particular firm. As a worker, you're on the job, you're getting the training you need.

It has a number of interesting features. One is, you can imagine that if no other firms are hiring apprentices, it might be difficult for me to start an apprenticeship program because I think I'd train people and they'd just leave for my competitors. One of the strengths of the German system is that by investing in it at the industry level and by having all the firms in the industry commit to taking part, you take that issue off the table. What that leads you to is a much more highly educated workforce that is trained in the skills you need.

When you think about some of the issues in the US, we have one of the highest levels of college graduation rates in the world but it appears that many of our graduates don't have the skills that business needs. What the apprenticeship program does in Germany is really provide a pipeline for those skills. The other thing it does, which is another reason I was so excited to teach the case, is it's aimed at people who might otherwise not get high-paying or interesting or remunerative work.

When we think about really well-paying, engaged blue-collar jobs, Germany has probably the highest concentration in the world. Germany is the third largest exporter of manufacturing products in the world, which is incredible given the size of their economy. They have many firms that are global giants in manufactured components, in machinery, in very high-tech stuff. There's a lot of reason to believe that's the apprenticeship program. The apprenticeship program is core to Germany's success. It's also very interesting, because if you could get refugees and immigrants into these programs, then you could perhaps train them and bring them into the mainstream of German society in a very positive way.

Kenny: You mentioned before, the whole notion of assimilation and how important that was to make this succeed.

Henderson: The Germans are reaching out, both very concretely, "Here are jobs, join the apprenticeship program, and "here are language programs, we're going to train you." German society is very much hoping to assimilate these refugees, and German business has a strong business case to do so. May I say that one of the strengths of the American assimilation of refugees and immigrants has been historically that there have been jobs for them and ways up. Of course, as many people have said, one of the reasons we're having so much trouble is as pathways to advancement start to close off, people start to see immigrants as competition.

Kenny: You wrote this case in 2015. It's been a couple of years since then. How is it going in Germany?

Henderson: It's not going as well as the initial discussion suggested it might. There seem to be a number of issues. One, paradoxically, is the refugees are reluctant to enter the apprenticeship programs. The stipend in an apprenticeship program is about a third of what you can gain in just a simple manual job, so the refugees who often desperately need money are tempted to just take the manual labor and get the money right now. Really, to do an apprenticeship is to invest in your long-term future, and they don't come from an environment in which that concept was well understood, and they're not supported by a society or family that understands that, yes, you do your apprenticeship and be paid a little bit less. That's been an unexpected hurdle.

Another has been that… The case talks about the need to introduce more flexible labor regulation and more certainty around which refugees will stay and which will not. As I understand it, there's still some significant confusion there, and so businesses want clarity before they start to invest in refugees. They want to know they're going to be around.

Last but not least, there is a significant amount of tension in the society around the place and nature of these refugees.

Kenny: As there is everywhere in the world, really.

Henderson: When you think that Germany took a million Syrian refugees in 2015, and just under another million or maybe a bit over last year, I mean that's a huge amount. I mentioned that Canada is perhaps the only other country that shares with Germany the ability to really assimilate immigrants on a huge scale. Well, last year Canada took 300,000 refugees and immigrants. Canada's population is not that much smaller than Germany's, and Canada's a well-known success. Here's Germany taking literally millions of people, so it is creating some stress.

I think what's exciting is that German business remains strong in its commitment to doing this. They certainly want to play an important role. It turns out that when you look at where the refugees have been finding jobs, most of them have not come through this route though, but through informal networks—through individuals reaching out to the refugees, through churches, through social connections. That's one of the levers the German government is really pushing, is encouraging individuals to come forward and get to know some of the refugees, and maybe I can find a place for you here, or my brother Joe has a job.

I guess it's always about the human connection. Instead of a feared stranger, you have a person who's in dire need and can use your help, and that makes all the difference.

Kenny: Back to the classroom, then. You've taught the case?

Henderson: I have. It went extremely well. The students are deeply intrigued by whether the German system might be a useful way of addressing inequality in other parts of the world. This idea that German business thinks about the welfare of the industry and invests in training that supports the well-being of the entire industry, and does it in a way that reaches the very people who could be really superb skilled workers, that's a very intriguing thought.

Some of the students find it very attractive; some of the students are concerned that perhaps you're streaming people into more manual positions. I think that's a misconception. No one goes into apprenticeship without choice. The idea that these jobs are (just) turning a bolt is really not the case. These are very complicated, sophisticated jobs, which is one of the reasons that Americans are having trouble finding people to fill their equivalents in this country. There's a lot of interest in that.

There's also of course a lot of interest in the kind of collective national response, this idea that Germany responds as a whole to the Syrian crisis. In this time of deep partisanship in our own country, I think the idea that business could be part of supporting a strong bipartisan conversation about the right thing for the nation to do is also very intriguing.

Kenny: You can find this case along with thousands of others in the HBR case collection at HBR.org. I'm Brian Kenny, and you've been listening to Cold Call, the official podcast of Harvard Business School.

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