PESTLE
PESTLE is a way of exploring and organising the trends and drivers that will affect your target market. It will help identify the market changes that will have the greatest impact on your innovation plans, and also spot innovation opportunities.
Successful innovation requires thinking about how your target market will evolve over time. What are the key trends and drivers that will influence the products and services that will succeed? What assumptions are you making about your customers that may not be true in the future?
We can make this task easier by grouping possible trends and drivers into categories. This helps:
- Make sure you have explored the full range of possibilities
- Identify the most important trends and drivers
PESTLE stands for:
Political – legal framework, regulations policy, trade deals, competition law, data protection…
Economic trends – growth, money supply, taxation, interest rates, tariffs, confidence…
Social changes – demographics, urbanisation, leisure time, working patterns, household size…
Technological changes – AI, genomics, robotics, nanotechnology, renewable energy…
Legal changes - rules, regulations...
Environmental issues – climate change, air quality, pollution, raw material limits, water…
There are several categories that can be used, and they can be organised into different acronyms, so you will also come across:
PEST – political, economic, socio-cultural and technological.
STEEP - socio-cultural , technological, economic, environmental and political.
SPELIT – social, political, economic, legal, inter-cultural and technological.
And many others.
They are all designed to do the same job, and it does not matter which one you prefer. The key thing is to make sure you cover a broad range of potential trends and drivers, and that you decide which are the most important to you.