Is the Business Climate Right for You to Start?

BBC

Competition between firms, for resources and customers, is fundamental to the market system, even when markets are reasonably stable. In recent years, however, the markets for goods, services, capital, labour, property and so on have been very volatile. Uncertainty and competition have intensified. This is because the past few decades have seen unprecedented advances and changes throughout the world in five key areas -
societies,
technologies,
economic development,
environment and
political systems and regulation,
- these are known as STEEP factors.

Some of the most spectacular changes have been in the introduction of new technologies and applications based on them. However, in some industries, changes in regulations and terms of trade, or in the relative costs of supplies and production, may have even more significant effects. And, some of the biggest changes with high business potential come from simple shifts in consumer tastes.

It is important to be able to identify the changes that are likely to have a significant impact on the industry you’ll be entering and on the habits and behaviour of your prospective suppliers, customers, consumers and competitors, including the forces that are likely to influence the acceptance and use of a brand new product. A selection of major factors within the STEEP categories are:

Social

Ageing populations in most of the industrialised world
Growth in mass migration and refugee populations
Challenges to welfare provision and educational systems

Technology

Speed and capacity of communication
Increased consumer sophistication due to computers and Internet
New mobile and wireless communications applications
Bio-genetic revolution

Economic

Integration of world financial markets
Rise of China as world manufacturer
Dominance of ‘free-market, free-trade’ model
Faster and easier access to information

Environmental

Global warming
Genetically-modified crops
Increased risks of epidemics and disease (AIDS, BSE, SARS, etc.)
Ecological damage

Political

European Union
World Trade Organisation
Increased regulation
Ethnic or religious conflict; nationalism