German-Turk Entrepreneurs and their interaction with the Turkish Business Associations

in Germany

Canan BALKIR

Coordinator, Jean Monnet Centre of Excellence at DEU

Weekend School on ”European Innovation Networks and Knowledge Migration to Turkey”

June, 2014-Izmir

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Introduction

European Commission 2007: unemployment rate of immigrants is an important issue in policy agendas of western countries

why ?

host country perspective a. high unemployment rates damage the welfare

state finances and undermine the role of migration as a solution to the ageing of the population and declining ratio of workers to pensionersb. determines poverty & social integration

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Turkish migration to Germany and the Netherlands

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1 Turkish migration to and from Germany, 1960-2010

Immigration Emigration

19.2% of Germany’s population have a migration background => issues concerning Turks? More than 3 million

Turks are more often unemployed than other migrant groups => The lives of German-Turks of lower social status have been complicated by de-industrialisation and the arrival of new immigrants since the early 1990s

Turkish community is made up of younger population when compared to German population => more need to work

Turkish workers have generally been addressed in the official German discourse as ‘gastarbeiter’(guest-worker), ‘ausländer’ (foreigner) or ‘mitbürger’ (co-citizen) – terms that underline their ‘otherness’ and displacement (Kaya, 2001).

Have more entrepreneurial spirit ?

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Turkish migration to Germany and the Netherlands

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7 Migration und unemployment in Germany, 1960-2010

Turkish immigration Turkish emigration Registered unemployment

Motivation to establish their own business

◦Is entrepreneurship something done out of necessity – discrimination on the labour market hinders working as an employee?

◦Are there any available social networks and whether they supported these enterprises, if so in which context;

◦who are the key players in the social networks that support these establishments

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Immigrant enterprise is considered to be a factor in economic dynamism

Due to their different cultural backgrounds, it is likely that migrants and native workers have fairly diverse abilities and knowledge=> “Innovation is a product of interaction between actors that have sufficiently different knowledge in order to make Schumpeterian new combinations.” (Boschma & Martin 2010: 142).

They are considered to be better employment creators than domestic enterprises.

Does this apply to Turkish immigrants in Germany (Özcan and Seifert, 2000)?

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Turkish guestworkers arriving at Schiphol, 1964

Turkish migration to Germany and the Netherlands

Turkish miners

arriving

in Dusseldorf, 1961

Positioning Turkish entrepreneurs in Germany

The first Turkish businesses appear in early 1960s catered to Turkish labour migrants’ special needs (restaurants and cafés, translation services, travel agencies, etc).

The family reunification that took place in the 1970s enlarged these needs (clothes, transport firms, music shops, grocery stores) => business activities expanded during 1975-1985reason: 1. many German-Turks abandoned their plans to return and invested the savings initially destined to their life back in Turkey

2. changes in their legal status enabled easier access to self-employment and unemployment problems pushed them into independent business (Sen and Goldberg, 1996).

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November 1969Ismael Babader (links) reiste im November 1969 als millionster türkischer Gastarbeiter nach Deutschland. Vom damaligen Präsidenten der Bundesanstalt für Arbeit Josef Stingl (Mitte) bekam er bei seiner Ankunft am Münchner Hauptbahnhof einen Fernsehapparat geschenkt.

Turkish migration to Germany and the Netherlands

End of the 1980s: new trend

heterogeneity: growing economic differentiation between

enterprises in terms of scale and purpose beginning 80s concentration in three sectors : (1) retail; (2)

restaurant and takeaways; and (3) the service sector end of 80s> diversification into other areas with greater

control over value-added parts of the commodity chain => retail, tourism, textile, catering, telecommunication, Internet and computer industry (BerlinerZeitung, 2001)

Turkish Studies Institute in Essen, Germany estimates a

number of 120.000 entrepreneurs in the year 2010 (Rheinische Post, 2005)

=> elite entrepreneurs emerged (Vural Öger, Kemal Şahin)

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Another source of heterogeneity is gender women entrepreneurs

they have lost much of their ‘ethnic’ or ‘Turkish’ specificity.

speak German to avoid giving the impression of a ‘typically Turkish’ shop and to have non-Turkish customers feel comfortable

Try to avoid running a ‘Turkish’ shop in a ‘Turkish’ neighbourhood and had planned to settle elsewhere => many are unable => limited capital & dependence on co-ethnic networks

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Hybridity - Turkish entrepreneurs have gone from catering to same ethnic group to the market

early stages: entrepreneurs used to rely on the ‘protected market’ constituted by Turkish migrants special needs

later more contacts with Germans and the mainstream economy

protected market is losing its importance because German shops and German & Turkish customers have mutually adapted their supplies and demands to one another => few businesses can survive by relying exclusively on co-ethnic customers

evolution of German customers’ consumption habits especially in the food sector => ‘Ethnic’ food is now purchased by nearly everybody => growth of restaurants held by immigrants

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Professionalism

creation of an association representing their interests> association is called the TDU (Türkish-Deutsche Unternehmervereinigung Berlin-Brandenburg/Turkish-German entrepreneurs’ association> main goal is to contribute to German-Turks’ ‘integration’ in Germany by facilitating their business activities => ‘humble’ entrepreneurs do not see any common ground between them and the elite businessmen represented by the TDU

Similar associations also exist in all big German

cities

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Internationalisation & State Interest

Turkish businessmen’s import-export activities between Germany are Turkey have existed since the very beginning

Businessmen would bring Turkish products to Turkish

customers in Germany.

Products not only circulate from Turkey to Germany but also in the reverse direction & other countries

State interest Migrants are now allowed and expected to bring their specific contributions to the German society, and one of these contributions is their economic dynamism.

 

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Second generation entrepreneurs are distinct from the first generation

educational and professional skills first generation came as manual workers, constituting lower levels of educational qualifications, the second generation has a different starting point

Target market first generation entrepreneurs mostly targeted members of

the same ethnic group, serving products that were mostly of ethnic nature (like grocery shops or restaurants offering Turkish food), the second generation entrepreneurs are active in various fields, having clients of all origins.

Size & duration Even if most self-employed German-Turks started with small

family businesses> afterwards differences in terms of size & duration of the enterprise

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Difficulties faced by immigrant entrepreneurs

1. lack of education In Germany’s highly regulated economic system, most jobs require workers to have followed a specific professional training (Ausbildung) & formal education in their home country is not approved

2. Entrepreneurs with a migration background are more likely to be denied credit or to obtain smaller loan amounts> borrow money from family members and friends

3. Credit access is hampered by the fact that foreign assets are not accepted as collateral.

4. Financial and human capital constraints are likely to restrict access of ethnic minorities to capital-intensive industries, pushing them into industries with low entry barriers

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Questions to be Answered?

◦What were the difficulties in establishing the business and how did they  overcome these? 

◦What is the importance of the family in setting up businesses?

◦what are the problems experienced when running their businesses?

◦what is the role of human capital? Do German-Turks have enough expert to become successful?

◦ Is it possible to assess ethnic business solely as a healthy sign of successful integration?

◦Did the business improve their socio-economic position among the other Turkish migrants/ or in a broader community?

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Answer lies at Social Networks

Social networks between people are based on cultural, occupational or familial ties (Portes, 1995, p. 8). They shape entrepreneurial decisions and shape as well as create opportunities for ethnic business.

Resources that depend on social networks are referred to as

social capital. Portes (1995) defines social capital as follows: "Social capital refers to the capacity of individuals to command scarce resources by virtue of their membership in networks or broader social structures."(Portes, 1995, p. 12).

Ex. scarce resources: information about business opportunities; loans from family members

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Social Networks (legal conditions)

With respect to legal conditions two aspects have to be considered: firstly the conditions set by immigration law and secondly other legal requirements (e.g. for regulating market access or supporting self-employment) => An association agreement with Turkey ensures that Turkish citizens in Germany need not to fulfill these requirements. Under the principle of reciprocity for German entrepreneurs in Turkey there are no restrictions set by immigration law for Turks in Germany.

With the amendment of the crafts code the title of master craftsman

was no longer a precondition for setting up a business in various crafts => This opened up business opportunities for ethnic minorities.

 

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How do migrants relate to the wider economy and society? Migrant Associations in Social Network

Migrant associational activity in Germany began in 1960s associations began to form as labour movements, student associations and trade unions. Religious organizations also became increasingly prominent. The status of Turkish migrants as guestworkers affected how they related to the national policy processes. => Since they were expected to return eventually to their homelands, the question of acquisition of political rights remained outside of their agenda

early associations => limited themselves to service provision => mainly for translation and information sharing on working and housing conditions.

1970s first umbrella organization was that of a federation of students’ associations- ATOF (Almanya Türk Oğrenci Demekleri Federasyonu - Federation of Turkish Students’ Association in Germany)

 

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panorama of Turkish migrant associations in 1970s

March 12, 1971 military intervention in Turkey => many Turks from all ends of the political spectrum arrived in Germany

reflected the political fragmentation of the homeland federations such as: The TDF (Federation Demokratischer Vereine der Arbeiter aus der Tiirkei in Europa - European Federation of Turkish Democratic Workers’ Associations), was founded in 1974 with the initiative of intellectuals of left orientation; parallel organization was founded in 1971 in Berlin by the leaders of the Turkish Communist Party and the Turkish Labor Party, the ATDF (Europaische Foderation Turkischer Sozialisten - The European Federation of Turkish Socialists).

 

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panorama of Turkish migrant associations in 1980s

military coup in Turkey in September 12, 1980 => migrants consisted of political activists and party and union leaders from both the left and the right end of the political spectrum => agenda of associations dominated by Turkish politics rather than migrant issues. => distanced themselves from service provision => lost their influence

mosque associations, i.e. moschee-Vereine began to form as early as the initially at the factories with demands for a special space for prayer times => 1970s number of religious organizations increased => IKZs (Islamischer Kultur Zentrum - Islamic Cultural Centers),were established.

 

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panorama of Turkish migrant associations in 1990s (fragmented)

German reunification affected the ways in which immigrant populations operated in the 1990s.

emergence of anti-immigrant violence in Rostock, Molln and Solingen => changes in the strategies of both the German government and the immigrant associations

German government during the Kohl coalition aimed to limit immigration and asylum => policies aiming at reductions of social welfare benefits, the decentralization of social policy

unemployment rate increased => impetus for the emerging entrepreneurial spirit among the Turkish immigrants => open restaurants and also work in the construction sector

rising levels of xenophobia in Europe => umbrella organizations attribute their activities to differing aspects of the needs of migrants

Ex. TGD (Tiirkische Gemeinde in Deutschland-Turkish Community in Germany) HDF (Foderation der Volksvereine Turkischer Sozialdemokraten - Federation of Turkish Social Democrats), FOTED (Foderation Turkischer Eltemvereine in Deutschland - Federation of Turkish Parents Associations in Germany-),

BTS (Bundesverband Turkischer Studierendenvereine – Turkish Students’ Union

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Economic Associations

Turkish Industry and Business Associations- TÜSİAD opened its office in Berlin http://www.tusiad.org.tr/

Alper Üçok (Director) “There are a lot of Turkish associations in Germany that are established in line with the

political stance of the founder. The founder presides for a long time, and the new comers looking for managing position establish a new association. It does not work even under the umbrella organization Initiative.”

“Islamic Associations, Alewi Associations and even secular Associations are not professional; they are all doing daily political conversation. Most of them are unable to pay the rents since they do not have enough funds.”

Nalan Arkad (Türkische Gemeinde in Deutschland. (Turkish Community in Germany) http://www.tgd.de

“We work as task force to overcome bureaucratic obstacles“ “Liberalization of visa regulation” “New sort of students need new sort of funding” “Use of distance and e-learning concepts”

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The Association of Independent Industrialists and Businessmen - MÜSİAD Berlin-Muzaffer Türk (General Secretary) www.muesiad-berlin.de 1994 opened Berlin office “Does not have an organic link but a tie of affection with Turkey. It was

established in 1994 and became organized in 9 different states. There are around 9000 companies in Berlin, 7500 of which are family run businesses and members of MUSIAD. Those who run casinos and bars and those who are corruptly doing their business are not accepted by MUSIAD as members.”

Provides consultancy, legal advice & established sectoral committees “Young MUSIAD was also established.” “We provide scholarship for not only Turkish but also German skilled

students.” “By cooperating with the Ministry of Economics, we are working on the

transfer of the companies. They also inform the business community in Berlin about the database they collect.”

“They organize certification programs for revealing social skills of Young Turks and Germans.”

“Civil society initiative” “MUSIAD Cup” “Hi Partner! > promoting and supporting innovative ideas

(www.selamortak.com)

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Association of Turkish Entrepreneurs andIndustrialists in Europe (ATIAD) founded in 1992 joins suborganizations, whose members belong to upper and

middle social income group)

The organization goals : function as a “bridge” between Germany, EU and Turkey, by “reinforcing the economic relations

second objective of the association is the Turkey’s involvement in national markets and in the global economy. > aim is to inform members about economic profit opportunities as well as legal prevailing conditions of potential markets.

The third objective of ATIAD is the articulation of “line of business specific questions” to governments in Turkey, Germany and EU

the interests of Turkish and Turkish origin entrepreneurs should be represented to the line of business and profession associations

support of training/apprenticeship

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German-Turkish Chamber of Industry and Commerce (Türk- Alman Ticaret ve Sanayi Odasi / TD-IHK)

headquarters in Cologne, is a counterpart of the Turkey-based German-Turkish Chamber of Industry and Commerce

existing since 1994 represents the interests of Turkish enterprises in Germany, whose members

belong to upper and middle social income groups positive image of the association was created by the honour memberships of the former German Chancellor Schröder and the Turkish Prime Minister

Erdoğan The essential goals of the TD-IHK are: a) support of the economic

relationship between Germany and Turkey; b) “contacts to the German and Turkish

government, public corporations”; 3) accomplishment of activities which support

Turkey’s accession to the EU,; d) support of “training of bilingual qualified

employees and executives” The association, in connection with the Education Ministry, advises German

and Turkish origin enterprises in Germany on creating apprenticeship places.

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Turkish-German business association Berlin-Brandenburg (Türk-Alman Berlififii Bellin-Brandenburg / TDU)

apprenticeship problems,

support of business start-up by “giving advice and providing “small loans > to get in touch with influential institutions in Germany and Turkey to work on this problem

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