Report on macro-economic analysis using pestel


The following report represents an attempt to present a PESTEL analysis of the current world affairs. The report is divided into two sections, whereas the first section briefly describes ideas taken from literature, while the second is an analysis of the former, attended to evaluate the most important of these ideas.

PESTEL analysis of world affairs

The PESTEL analysis enables the forming of a realistic image of the situation in a certain area, as it takes into consideration all the aspects and concerns of modern life. However, due to many changes and occurrences in various parts of the world, performing such an analysis on a global scale is somewhat a problematic issue, due to the scope of events and factors that need to be taken into account.
In order to create a complete image of current world affairs through a PESTEL analysis, each of the six factors (politics, economics, social, technological, environmental and legal) must be taken into consideration. Therefore, the following section is divided into 6 different parts, each describing one specific factor.


If a couple of years retrospection is given at the world from a political perspective, it becomes clear that global politics has been marked with struggle and revolution, points Ms. Barnes for the National Executive (Barnes, 2012). She underlines the revolutionary movements that have begun in Tunisia and Egypt have inspired movements all across the globe, as they have shown that people can still stand up for their rights and what they believe in. Thus, although protests were primarily set against dictatorships, they quickly turned and expanded to include other dimensions, and hence, protests against austerity and the world’s corporate power soon became global movement. There almost isn’t a region of the world that has not been inflicted by some kind of struggle, revolution, strike, war, and this includes the austerity movements in Europe, as well as the Occupy movement that has grown to a global scale. And, taking all into consideration, the global political turmoil will continue to burn in the imminent future (Barnes, 2012).


According to the United Nations, the global economy is about to meet another major crisis in the upcoming year (UN, 2012). This crisis is mostly a result of the global unemployment problem and the weak prospects for economic growth. Furthermore, the major factors that are both causing and are a result of economic stagnation are the high unemployment rates, leading to poor relations and distrust between businesses and consumers, but also a high fragility of the financial sector. However, the problems that affect the global economy are not confined to this only, instead they are numerous and interconnected. According to the UN, the economic instability in Europe and the USA, being the two largest world economies, influences problems in other regions too, especially in the developing countries (UN, 2012).


According to a report issued by the United Nations in regards to the current economical and social situation in the world, a great number of improvements in terms of human welfare have been achieved in the past 200 years. These, however, have not been distributed evenly around the globe. This means that although the social status of a great number of people has been following an up going venue, still, many areas around the world remain at a very low level (Globe-net, 2012). The situation is not being improved with the latest economic trends worldwide. According to the same report, 64 million jobs have been lost during the global economic crisis, and these significantly influence the social standing of the population (UN, 2012). Also, due to the same reason, many aspects of social welfare have been hit. The major issue now, points Globe-net, is to come up with a solution to conquer the poverty on a global scale (Globe-net, 2012).


With latest developments in the raising global concern about protecting the environment, two issue related to technology emerge. According to Clancy, one of these concerns is technology for creating clean and renewable energy, upon which many of the world countries are now focusing (Clancy, 2012). The other has also been influenced with same concerns about the environment, but from another perspective. The National Academies (NA) point out that hunger is to become a major global problem, especially if the expectations stating that the world population will grow by 2 billion people by the end of 2030 are taken into consideration. NA state that the main issue will be to produce enough food for everyone without making any further damages to the environment. This is a major issue, as hunger is a problem for some developing countries even today, and it is expected that this problem will grow proportionally with the growth of population. Therefore, indicates NA, this is an issue that can only be solved by technology, which is why it is necessary that new researches and improvements are enabled (NA, 2012).


The environmental issues have become alarming during the past several years. Humanity has affected the planet, resulting in global warming and climate changes, which significantly influence the environment and life on the planet. These changes affect everything, including biodiversity and extinction of species, and are mostly a product of the greenhouse gas effect. According to Shah, a number of actions are taken by nations across the globe for reducing this effect, and these include commitment for producing a certain percentage of clean energy in the close future, introducing Carbon taxing and ” outsourcing” greenhouse gas emissions (Shah, 2012). Many countries have committed themselves to achieving a certain amount of reduction of greenhouse gas emissions, and have already started actions to accomplish this, although not all countries are involving the same resources.
Shah also emphasizes the projected growth of human population, which is set to be an average of 9, 3 million people by 2050. The problem of growing demands in energy and food, as two basic necessities, can further influence the environment issue and produce even more concerns (Shah, 2012), which is why new technology that will be able to produce more clean energy and more food is essential.


International law has become a major issue of concern in the past decades, as it deals with problem areas including war crime prosecution, disarmament, use of force, protection of the environment and human rights, globalization and its economic effects, sustainable development and similar (Oxford Law, 2012). It defines all legal responsibilities of various countries in their mutual relations, but it is also concerned with the treatment of the people within the boundaries of the countries. According to Oxford Law, these issues required addressing on more occasions lately, taking into considerations occurrences such as the war against Iraq, war against terrorism and similar, which brought about the importance and meaning of international law well into the spotlight.

Discussion / Evaluation

Having in mind the previously stated, one can draw a conclusion that each of the examined factors by itself has serious and wide ranged implications on global affairs in general. However, it also becomes visible that these factors cannot be divided and regarded as individual and separate issues, as they are more than intertwined and dependent upon each other.
The question of evaluating these factors, with the purpose of determining the importance of each one, thus becomes a complex process with no singular answer. The reasoning behind stating this comes from the fact that all six factors are mutually dependent, as it was already mentioned.
For example, it was stated that in recent history, many political turbulences have rocked the globe for various reasons: human rights and fight against dictatorship, undermined social status of the people due to unemployment or similar reasons, austerity and many other. These events can be regarded as being both a cause and a result of the state of the global economics which is supported by the fact that austerity, for example, has been influenced with the global economic crisis and loss of a great number of jobs. On the other hand, the economic uncertainty and problems have led to additional political turbulences, such as strikes and riots. In short, the political and economic issues are both cause and effect of each other.
The same can be applied to other groups of factors. Let us consider the connection between technology and environment, for example. The above stated in regards of these two factors indicates some predictions about the future of the human kind and the planet which are not too bright. This is mostly a result of the global climate changes which influence not only the known way of life, but also the existence of natural resources and the very life itself. From this perspective, and having in mind the expectations in terms of the world’s population growth, it becomes clear that technology is the one answer that can ensure survival, but under the condition that technological improvements are made environmental safe. In other words, the safety and preservation of the environment depends very much on the technology, but technology also depends on the environment.
Following the same line of thinking, links can be made between the social and economic factors, as well as between the social and political factors. Poverty has become a major global issue, and it has more than affected the social aspect of life. Poverty has been induced mostly by the global economic crisis, and it has been influenced with the political instability in general.
In conclusion, when evaluating the importance and effects on world affairs of each of the six factors, the mutual linking, representing their intertwining and dependence, comes to mind. To further explain this, a visual representation is given bellow:
As can be seen from the graph, all of the five factors (politics, economics, social, technology and environment) are linked with each other, representing the mutual connection and interdependence. In addition, the legal factor, in terms of global or international implications, affects them all.
Taking this into consideration, it must be concluded that all of the six stated factors have a significant importance and each of them affects all the others. This affect can furthermore be characterized as proportional, as the growth of one factor influences the growth of another and vice versa.
For example, if the economic stability on a global scale is regained, that would mean that jobs will be available, people will work and be paid for it, which will affect their social status. Both of these, the economic stability and better social standing will influence political stability and will enable the development of technology, which, in turn, will affect the environment, but it will also affect the economics, bringing the circle to a close. On the other hand, low level technology will not enable economic growth, which will, in turn, affect occurrence of problems in politics, social life, environment etc.
Hence, the overall conclusion from all previously stated is that, although the six evaluated factors may have been distinct and separate from each other in the past, they are today very strongly connected and dependent upon each other. This means that no single factor can be distinguished as the one that has most importance, or as the one that requires most resources and effort to be dealt with. They are all equally important and must be treated as such.
In addition, the dealing with all of the above stated concerns must be a global effort, undertaken by all states, with the developed countries leading the way. Only with such joint commitment can sustainable development be achieved.


Barnes, M. (2012). International political situation report, Alliance Voices, http://alliancevoices. blogspot. com/2012/02/international-political-situation. html, accessed December 3, 2012
Clancy, H. (2011). 5 renewable energy trends to watch in 2012, ZDNet, http://www. zdnet. com/blog/green/5-renewable-energy-trends-to-watch-in-2012/20674, accessed December 4, 2012
Globe-net, (2012). World economic and social situation, http://www. globe-net. com/articles/2011/july/6/world-econhomic-and-social-situation-2011/, accessed December 4, 2012
NA – National Academies (2012). Technology to feed the world, http://www. nationalacademies. org/webextra/crops/, accessed December 4, 2012
Oxford Law (2012). Public International Law, http://www. law. ox. ac. uk/theme/pil, accessed December 4, 2012
Shah, A. (2012). Environmental issues, Global Issues, http://www. globalissues. org/issue/168/environmental-issues, accessed December 3, 2012
UN – United Nations, (2012). World Economic situation and prospects 2012, United Nations, http://www. un. org/en/development/desa/policy/wesp/wesp_current/2012wesp. pdf, accessed December 3, 2012