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I’m the chief economist at Daimler. If this job sounds odd to you at first hearing, don’t worry — you’re not the only one. But I can assure you that my job is incredibly varied, and no two days are the same.
In the current season of HeadLights , our Daimler podcast (this episode only available in German), I talk about the reasons why the ups and downs of the economy are probably more exciting today than ever before. I also explain when my team and I are especially in demand, and why we’re interested in matters such as the development of the price of beer at the Cannstatter Wasen festival grounds.
Imagine this: You’re in a completely normal pedestrian area in Germany and you’re talking to random people and asking them what kind of jobs they think are available at Daimler. What jobs would people probably mention most often? “Mechanic” would probably be at the top of the list. “Engineer” and “car salesman” would certainly be there too. But my profession — that of a chief economist — would almost certainly be missing. Somehow I can understand that. People generally expect a person who is intensely involved with economics to be working at a bank or an insurance company or in politics.
The economic environment influences us
But it stands to reason that a company that sells cars and offers mobility services is also concerned with the economic environment in which it operates. That’s because developments in economics and politics naturally have an effect on our business operations — on the sales markets for cars, trucks, vans, and buses. That’s where my team and I come into play. We observe and analyze economic developments at the global level and in individual markets. We make forecasts about the effects these developments could have on the demand for our products. And we identify the risks and opportunities that result from these developments.
But how does all this work? How can we make forecasts about developments in the overall economy over the next one, three or ten years when meteorologists sometimes can’t even reliably predict the weather over the next three days? I can already tell you that we don’t have a crystal ball. But we don’t need one either. We work with models that enable us to recognize certain trends, and that in turn enables us to make relatively reliable forecasts — for example, about how economic growth is likely to develop over a certain period of time. Of course it’s important for us to do a lot of our work in terms of bandwidths, corridors, and scenarios. But of course the Board of Management expects us to provide concrete forecasts about the direction in which things are going. Could we sometimes be wrong? For us, that’s probably an occupational hazard.
Economists are in demand during periods of crisis
We deserve congratulations, because so far our forecasts have been right more often than they’ve been wrong. For the sake of our company’s success, it’s crucial that we continue developing our tools and models in a way that enables us to identify pending economic slowdowns or crises as early as possible. That way, the company can make the right decisions early on. In general, we economists are mainly in demand during periods when the economic environment doesn’t look too rosy. At such times, everyone of course wants to know how things are going to develop, whether we’ve reached the end of the slump or whether the recession will continue. By contrast, when the economy is on an upswing, people don’t really care whether we will have economic growth of 2.5 or 2.8 percent.
Political influence is growing
Thanks to big data, our early-warning tools are much more sensitive and precise today than they were just a few years ago. For example, I believe that our present-day methods would have detected the crisis of 2008/2009 much earlier than the methods that were available back then. On the other hand, we’re also seeing that the influence of politics on economic development is growing and, above all, is becoming more unpredictable.
As a result, the fluctuations of the markets can no longer be predicted only through economic expertise — and that’s making our job more complex but also more interesting than it used to be. This is why in my team we’re focusing on four main theme fields: first, pure macroeconomics, or observation of the overall economic environment; second, forecasts about the automobile market; third, geopolitics; and fourth, industrial and trade policy.
What the price of beer has to do with the economy
The job that my 15 colleagues and I do involves far more than the dull evaluation or interpretation of figures, especially when we have to explain our conclusions to laypeople. I like to say that economics is also a kind of storytelling. If we want people to listen to us, we can’t simply present figures or diagrams. We also have to tell them the story that goes with these figures or diagrams. And we have to answer certain questions: What are the reasons for this particular development? Why do we assume that things will develop in one direction rather than another? What practical effects will this have on us? Here’s a very clear example of this kind of storytelling:
We published a Wasen Index on the Daimler intranet. This index was named after the location in Stuttgart where a famous festival, the Cannstatter Volksfest, is held 1). We compared the development of the prices at this festival (for beer, chicken, streetcar tickets etc.) with the development of the average wages. The Index revealed whether or not your money has the same purchasing power under the giant Ferris wheel as it did a few years ago. This story received a lot of great feedback — though one of our colleagues aptly remarked that by the time you’ve downed your second liter of beer, you’ll be relatively indifferent to the cost-benefit ratio. So, cheers!
I thoroughly enjoy packing the complex developments of the global economy into a good story. And I’d say that I’m not just a professional economist, I’m an economist who loves his job with all his heart and soul. That’s why Daimler is exactly the right employer for me. Because of our various divisions, the many products we offer, and the many markets in which we operate, at Daimler we economists have an incredible wealth of topics to deal with.
In my opinion, that’s the most attractive aspect of my job — and it’s certainly one of the reasons why I’ve been working here for more than 30 years. To put it another way, as an economist at Daimler you might not be working on every project from A to Z — but you’ll always be involved in A, because every good business plan begins with a solid analysis of the general economic forecast.
Apropos forecasts, if you should ever meet a meteorologist, at the end of your conversation you’ll probably ask him to predict the weather for the next three days. People I talk to about my job often ask me at the end of our conversation what the economy will be doing in the near future.
In the new season of HeadLights, our Daimler podcast, I’ll give you the answer to that question, as well as many other insights into my daily work. But I also always give people a disclaimer, free of charge: No matter how good our analyses and forecasts are, I can guarantee that in 2019, as in other years, something will happen that we haven’t expected. For me and my team, that means our job will never become boring.
1) Following an analysis conducted by UniCredit in September 2018.