Immigrants - driving force in the Viennese economy

Nearly 16,000 - around a third - of all Viennese sole proprietors come from migrant backgrounds and are already bringing in more than 17 per cent of the total economic potential.

Foreigners avert crisis in Vienna. Immigrants as a major economic factor. Migrants as successful entrepreneurs in the Viennese economy. These media headlines show the growing importance to the Viennese economy of people from a migrant background. They were prompted largely by several studies commissioned primarily by the City of Vienna and the Vienna Economic Chamber.

Company founders from 85 countries

Migrants are significantly more likely than Austrians to establish a company. In Vienna alone, people from 85 different countries registered new companies last year. “Migrants make a substantial contribution to the diversity and security of supply in Vienna," said the Vice Mayor, City Councillor of Finance Renate Brauner. Vienna also has immigrants to thank for the fact that it is so well integrated in a globalized economy. “Migrants also create tens of thousands of jobs,” said Brauner.

Poles the largest group

Accounting for around 29 per cent, entrepreneurs from Poland are the largest group in Vienna, working above all in the construction industry. The next largest group is Turks, nearly half of whom work in commerce. According to the agency “Turklook”, there are currently some 6,000 Turkish businesses in Austria, 3,500 of them in Vienna. In 1988, there were just 500 in the whole of Austria. In Vienna, most companies founded by immigrants are in the trade and crafts sector, in commerce, and in information and consulting. The majority have businesses in the 15th, 16th, 17th, 2nd and 20th districts. They are often one-man businesses employing an average of 0.6 workers. Every other business is dependent on family members.

One example of Poles who have made a go of a business in Vienna is the company “DiTech”, founded by Alexandra and Damian Izdebski. They immigrated from Poland in 1992 and started with a small computer workshop. They now employ 203 workers, have sales of EUR 64 million, are becoming market leaders, and occupy almost an entire business centre in the 20th district. Their formula for success: modify computers to suit individual needs and sell them. Their credo: someone who can make it in Vienna can make it anywhere.

Foreigners net contributors to the social system

Minister of Social Affairs Rudolf Hundstorfer stresses that Vienna’s and Austria’s social system benefit significantly from foreigners, who are “net contributors” to the social system. Foreigners bring in an annual surplus of EUR 1.5 billion to Austria’s social system. If Austria did not have them, social security premiums would have to be increased by this amount every year. According to Hundstorfer, the percentage of foreigners who receive social welfare is disproportionately small. Because of this, foreigners also make an important contribution to maintaining “our welfare system”.

Learning German “very important”

Languages are also key to the success of migrants. This too is confirmed by the latest studies, most recently a study conducted by the GfK Institute in Vienna. The most important results: most immigrants (83 per cent) feel well integrated in Vienna and Austria. More than three quarters consider it “very important” for immigrants to learn German. For 85 per cent of migrants surveyed, their most important goal in life is to give their children a good education. In 2006, another study concluded that the Viennese economy also benefits considerably from immigrants’ knowledge of other languages and countries. Around 200,000 people of working age and from migrant backgrounds live in Vienna. They bring with them important contacts to their countries, above all Eastern Europe, which also benefit Vienna.

Immigrants often overqualified

Immigrants are generally better qualified and significantly better educated than Austrians. This is confirmed by other studies commissioned by the City of Vienna (especially departments MA27 and MA17). For example, more than 16 per cent of white-collar workers from migrant backgrounds have a university degree, compared to 12 per cent of Austrians.




At the same time, however, migrants often have difficulty finding a suitable job to begin with. Around 40 percent of labourers from a migrant background are overqualified for the work they are doing. Experts attribute this primarily to inadequate language skills, but also to problems getting their diplomas recognized.

In general, however, the education level of migrants is improving noticeably and continuously. The latest figures: 14 per cent of migrants who have arrived in Vienna since October 2008 have a university degree from their mother country, 28 per cent have some higher education, 17 per cent have a diploma from an advanced technical college, and 35 per cent have completed compulsory education. Only five per cent have not attended school at all in their mother country.

Ethno-business significant economic factor

In general it is still the norm for immigrants to experience difficulties initially and to start their own business in order to become successfully integrated in Vienna. They demonstrate a higher willingness to take risks and set up their own companies, even though some are very small businesses. It has also turned out that immigrants have become successful entrepreneurs amongst various migrant groups. This was verified for example by a study on “ethno-entrepreneurs” also commissioned by the City of Vienna. The most important insight: “ethno-entrepreneurs” are no longer merely on the fringes in Vienna; they have become a major economic factor. They also contribute significantly to integration. Furthermore, Austria and Vienna still have room for these companies owned by immigrants.

Migrants huge support to Viennese economy

The entire Viennese economy is now extensively supported by immigrants. During a discussion at the 2009 “Medien:Messe.Migration” trade fair, a representative of the Economic Chamber estimated migrants’ share in the current economic potential of Vienna at more than 17 per cent. And the trend is rising. Migrants are important to Vienna not just as part of the workforce, he continued, but above all as entrepreneurs. The basic problems for entrepreneurs are the same for Austrians and migrants. They complain first and foremost about taxes being too high and about an excessive administrative burden. For migrants, inadequate language skills are often an added handicap, the representative said. The fact is, as the Viennese magazine “Format” stated in an analysis: “Austria has long been a country of immigrants; without immigrant entrepreneurs, the economy in Austria would quite simply come to a standstill." The latest campaign by the City of Vienna and the Vienna Economic Chamber, “Vienna’s economy speaks all languages”, rightly draws attention to this fact.

“Playing by the rules includes speaking the language”

Vienna’s Executive City Councillor for Integration, Sandra Frauenberger, said at a weekly mayoral press conference: “Playing by the rules includes speaking the language. If we want to live well and peacefully together in this city, then we must speak one language with each other.” It is for this reason that Vienna supports improving the language skills of immigrants.

Immigration has been occurring for many years due to the city’s geopolitical location on the Danube. Until just a few years ago, the majority of immigrants came from Southern and Eastern Europe. This situation has now changed radically.

Majority of immigrants Germans

Mayor Michael Häupl pointed out that “Today, the reality is quite different. Immigration has dropped by at least half, probably even two thirds. The majority of immigrants today are Germans, the next largest group is Poles, followed by Serbs and Turks. This means that we have a completely different picture and completely different tasks facing us today.”

A start coaching session, offered at the beginning of “StartWien”, is available in sixteen languages. In it, the integration agreement, the education booklet, and the federal or Viennese language voucher are explained to new immigrants. In September 2009, a new record was set with start coaching: 99 per cent of new immigrants took advantage of this offer on their own initiative. The new Viennese residents are told where they can redeem the coupons and where to find the German lessons they need. In 2008, a total of 10,000 people learned German in Vienna.




Michael Häupl, Mayor of Vienna: “The idea is to enable foreigners, people from migration backgrounds, to live together with those who have been living here for generations. We’re doing all we can in this area. Language is a critical requirement, but there are also essential values such as respecting each other and consideration for others. On Brunnenmarkt you can see for yourself: the through-and-through Viennese butcher, next to her the Turkish baker and the Serbian fruit seller. Basically they get on extremely well together.”