The social consequences of quantitative easing

In response to the global financial crisis in 2009, national central banks and, in Europe, the ECB reacted with massive monetary policy measures. The markets were supplied with liquidity through various channels. This was referred to as the biggest financial experiment in recent history. Quantitative easing was seen almost exclusively as a financial policy instrument. The discussions ranged from ineffective to hyperinflationary.

Today I am interested in a different question: what social consequences did this policy have? And what does this mean for corporate management and competitiveness?

This assessment is not a scientific point of view, but a reflection of management practice, competition and personal conviction.

Everything comprehensible

After the shock of the financial crisis, the monetary policy measures took effect quickly and effectively. Fears and uncertainty gave way to hope and confidence. Investment and consumption picked up. For many years, growth, the order situation and capacity utilization became the dominant themes.

Delivery capability and production capacity were the trump cards. Competition, innovation and efficiency took a back seat. Everything was understandable.

People train what they need

People train the skills that their reality demands of them.

In the period after the financial crisis, skills such as scaling, resource management, delivery capability and operational excellence were therefore trained above all. Competition, displacement, strategic agility and dealing with scarcity became relatively less important. Not because they had become unimportant, but because they were needed less frequently.

In the 10s, young people entered the labor market. They were characterized less by competition and displacement than by the operational management of high order volumes. Operational effectiveness became more important than competitiveness.

The global supply bottlenecks during the Covid era further intensified this development. The biggest opponent was often no longer the competitor who wanted to win the order. The bottleneck was material, resources or delivery capacity.

We are talking about a development over a period of almost fifteen years. During this time, employees, managers and entire organizations were shaped. The shaping of today’s next generation of managers was not the result of competition for scarce demand, but of coping with high capacity utilization.

Quantitative easing has changed many things. It has enabled growth and created stability, while at the same time reducing the pressure on individuals and society to maintain their livelihoods.

Qualitative Pleasing

Societies rarely deal with the problems they don’t have.

For many years, prosperity, growth and employment were largely secure. Existential competition issues lost their urgency. This created space for other social issues.

Questions of identity, belonging, equal treatment and social recognition gained attention. Not because they were new, but because society had the capacity to deal with them more intensively.

Quantitative easing did not cause this development. However, it did create an environment in which it could develop.

The need for certain skills decreased. Approval, identity and social acceptance became relatively more important. I describe this shift in attention, priorities and trained skills as Qualitative Pleasing.

The key question is therefore not whether these issues are relevant. The question is how much attention they receive in relation to other challenges? What should be the focus?

Because the imprint remains, even if times and their real requirements change much faster.

Times are changing faster

The economic and geopolitical reorganization of the world today creates an immediate need for competitive competence, adaptability, assertiveness and strategic agility.

This is precisely where the problem lies.

Many of the skills that are urgently needed again today have hardly had to be trained for years. Today, reality once again demands competitive competence, the ability to deal with conflict, prioritization and strategic agility.

Skills do not disappear completely. However, they become weaker if they are not challenged for a long time.

The consequences are visible.

Germany’s competitiveness as a business location is under pressure. Politics, business and society have so far been rather hesitant in their response. This is also part of the same coinage.

Talent alone will not be enough

If you are unable or unwilling to relocate your business, you will be faced with an increasing shortage of employees and managers who can recognize the current challenges, mentally process them and act consistently.

Talent acquisition and talent development have rarely been more important than they are today. However, they will not be enough on their own.

Employee and organizational development are becoming central management tasks. Not as an HR issue, but as a prerequisite for profitability, growth and long-term competitiveness. Management systems, performance benchmarks and corporate culture must support the same direction.

People train the skills that their reality demands of them. Companies receive the skills that they promote and reward.

What skills do we want to bring back?

There are years of hard work ahead of us here. For fifteen years, other skills were needed. Today, competitive competence, conflict management, prioritization and strategic agility are needed again.

The question is not which employees the market will produce. The question is what skills we want to produce again in the future.