Published on Africa Can End Poverty

Why Germany wins and lessons from the Champions League final

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ImageGary Lineker, the British footballer, is not only known for his talent on the pitch, but also for this memorable quote: “Football is a simple game; 22 men chase a ball for 90 minutes and at the end the Germans win”.  Last weekend his theory proved correct. For the first time ever, two German teams contested in the Champions League Final. Bayern Munich (winner in 2001) played Borussia Dortmund (winner in 1997). As many Kenyans watched this true Fussball Fest, which ended 2:1 for my home team, it is a good time to reflect on its broader lessons for development, with a German lens.
What made it possible for both teams to become so successful? Surely, it’s not just skills, fitness and tactics—in ample supply worldwide—although they are needed ingredients. The full recipe involves global positioning and integration of the best talents, no matter where they come from, especially for these two cities which are medium-sized by international standards (Munich has 1.3 million residents and Dortmund only 580,000 residents). Today, football is as much a business as any other service industry. Enterprises are successful if they attract the best talents and connect them successfully to the local culture.
German football is an interesting reflection of how the country managed to adapt in a rapidly changing world. With a growing shortage of local skilled labor, German teams attracted international talent, and integrated them successfully with local players. Other parts of the economy are following the example albeit slowly. It will be vital for the economy to learn from the example that football is setting, because Germany is shrinking. After reaching a peak of 82.5 million in 2005, the total population began to decline. If current trends continue and immigration does not increase dramatically, Germany will be home to “only” 71 million people by 2050. More importantly, the decline is expected to be fastest among the working age population, falling from 55 million today, to below 40 million in 2050. This is the exact mirror image of Kenya, where young adults are driving demographic growth: by 2035, the size of Kenya’s workforce is expected to overtake Germany’s. Sadly, Germany’s demographic decline is particularly steep among the 20-30 year olds—the prime ages for footballers.

So how do you remain competitive with a shrinking workforce? This is how the clubs did it.
First, you invest in early success and capitalize on it to build a brand. Second, you provide a great environment to work and live in. Think of Bayern Munich. Among the squad that played in the final, you had a number of key national team players (Neuer, Boateng, Lahm, Schweinsteiger, Mueller and Gomez) two of whom are first or second generation immigrants. You also had Austria’s new superstar Alaba (whose mother comes from the Philippines and father from Nigeria), Brazilian national player Dante, as well as the French, Dutch, Spanish and Croatian internationals Ribery, Robben, Martinez and Mandžukić.

That successful model is being replicated beyond football, although slowly, in the economy as a whole. Attracting highly qualified immigrants is a win-win proposition. It keeps the home economy competitive producing growth and welfare; more often than not, sending countries are also benefitting via remittances and knowledge transfers, when migrants eventually return home.  By the way, Kenya just hit a new record in remittance flows, which exceeded US $1.2 billion officially in 2012 (most likely underestimating the real amount by at least 50 percent).

But Kenya itself has the potential to attract talent. The 2010 Constitution opens opportunities for dual nationality, and for obtaining citizenship after seven years of permanent residence, signaling new openness to the region and the world. As I will be leaving Kenya after four years this July, I can attest to Kenya’s openness and remarkable generosity to residents who come from other countries.

My sincere hope is that Kenya will further nurture this openness to international influence, positioning the country as a vibrant, modern and confident regional force, which doesn’t feel threatened by the outside world, but is willing to embrace it. Kenya can attract the best international talent and businesses, while positioning its own businesses to compete successfully in the world economy. If Kenya continues on this path of openness, it will eventually also play in the Economic Champions’ League.

NOTE: Wolfgang Fengler is the World Bank’s Lead Economist for Kenya, Rwanda and Eritrea. He is a passionate footballer and organized the “Nairobi Mini World Cup for Children” as the football commissioner in the International School of Kenya. He just published “Realizing the Kenyan Dream” which is available in all major outlets.
Follow Wolfgang Fengler on Twitter @wolfgangfengler

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