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Technological Factors Affecting Business

The concept of PESTLE analysis is nothing new in the world of business and corporate decision-making. It has been around for decades, but recently its importance has grown exponentially. This can be attributed to the ever-increasing technological advances that have taken place over the past decade or so, which have revolutionized many industry sectors and dictated how businesses need to operate day to day.

The power of PESTLE analysis lies in its simplicity; it helps identify and analyze those external factors that may be influencing a business’s success or lack thereof: political, economic, social, technological, legal, and environmental. It is these six categories that makeup what is commonly referred to as “PESTLE.”

We’ll be focusing on one category of PESTLE: Technological factors.

Technological factors refer to innovations that affect not only how products are created, but also how services provided by an organization function in terms of efficiency and effectiveness. This can include anything from increased computational power to advanced engine technologies applicable within specific industries, such as the automotive or aviation manufacturing sectors.

In general, though, technological factors should be seen as any development or advancement that alters how things were once done across all facets of an enterprise or, indeed, industry-wide — both internally within operations themselves and externally between customers/clients/partners, etc.

Technological Factors in Business

• The existence of 3D technology

Computer calculation speed/power

• The ability of computers to create truly ‘random’ numbers
• Engine efficiency

Internet connectivity

Wireless charging, security in cryptography.

The automation of unskilled work can be advantageous for companies, particularly in industries such as manufacturing, distribution, and supermarkets, which often require a lot of personnel. Automating tasks may allow these businesses to substitute human production lines for entirely machine ones, thus reducing the expenses associated with labor and office space. 

Automation also offers increased speed and accuracy compared to traditional manual production processes. Companies that take advantage of automation technology have the potential to gain a competitive edge by being able to produce more quickly and efficiently than their competitors.

On the other hand, the increase in automation might not necessarily be advantageous for those employed by job search firms or recruitment agencies. Many jobs considered low-skill, such as data entry or call center work, are slow but steady careers that bring financial stability to people; automation has already begun replacing these positions with automated software programs. 

Automation creates difficulty for those providing recruitment services, who then need to find other markets that machines cannot yet replace; this could affect profitability for recruitment firms across the board if there is insufficient demand for their services elsewhere. 

The ease with which machines can learn tasks and adapt means that more complex roles may start being replaced over time; even professions like legal advisory could potentially become automated, given sufficient technological advances in artificial intelligence (AI).

The main considerations here should relate not only to whether an AI-driven program can easily perform an occupation or service (reducing operational costs), but, more importantly, whether it’s ethically sound to perform these operations at scale without any human oversight or input whatsoever. A careful balance between cost optimization driven by advances in technology and responsible stewardship should always be maintained during any process involving job automation.

Computer calculation speed/power are important technological factors affecting businesses, because the faster and more powerful computers become, the more productive and efficient processes can become. This not only increases the profits of businesses, but also allows them to stay competitive in their respective markets. With advancements in computer technologies, such as increased processing power, businesses can take on more extensive and complex tasks than ever before. This can lead to new product development for larger companies or process simplification for small businesses. 

One example of how computer calculation speed has affected businesses is in data mining — the use of advanced algorithms and technologies to uncover patterns in large datasets. Companies across different industries increasingly rely on machine learning-based data mining techniques that require high levels of computational power.

By better understanding these patterns through data mining, they can make more informed decisions based on insights gained from the data they collect, which could result in an improved customer experience or higher sales volumes due to better pricing strategies enabled by this information. 

In addition, advanced computing capabilities allow businesses to conduct simulations that can optimize their processes by considering diverse elements such as costs and resource accessibility without the danger of actual losses associated with experimental strategies.

These models can also be employed for predictive analysis, for example, forecasting future demand or identifying the best stock levels according to customer requirements. This way, a business avoids overstocking and having to store surplus items or understocking in times of high customer demand, leading to an unsatisfactory supply that might result in a loss of potential earnings. Ultimately, businesses can quickly launch products and react rapidly to varying market circumstances. 

The superior computing power provided by modern GPUs, TPUs, and other hardware has enabled AI models that were previously unfeasible due to inadequate processing capabilities. This breakthrough has given rise to applications such as autonomous driving, where real-time responses are essential for safety purposes and efficiency gains from route optimization.   

Advances in both hardware (e.g., Moore’s Law ) and software (e.g., parallel programming and grid computing ) have enabled organizations with distributed operations to connect these operations worldwide via a cloud infrastructure, improving the speed of calculations and communication between geographically remote sites while reducing costs associated with traditional networking techniques, such as long-distance wiring installation.

This makes it simpler and more cost-effective to maintain visibility over all operations and perform compliance checks, since independent entities can no longer alter versions without being detected quickly. Consequently, these developments have revolutionized how modern organizations manage their operations, from product design to logistics management, process optimization to marketing activities — they are now able to gain a competitive advantage faster than ever before.

The increased global internet connectivity in recent years has manifested a wealth of opportunities for businesses. Businesses are now able to gain access to customers more quickly and effectively than ever before through the use of technology-driven marketing tactics such as search engine optimization, email campaigns, and social media marketing.

In addition, companies can investigate a range of online analytical tools that help track customer behaviors across different platforms. As a result of this improved level of connection with customers, businesses can now offer geographically diverse services in a much shorter time frame than ever before. 

Yet despite all its benefits, increased internet connectivity carries several implications for companies that may not be equipped to change their service offerings or restructure their existing communication practices accordingly. For example, telephone service providers may experience decreased demand since many people opt for alternate forms of communication like text messaging or video calls via applications like Skype or Zoom over traditional phone services. The same might be true for paper-and-ink printing companies, who may see decreased demand as more people transition towards digital copies instead due to the increasing global reliance on digital resources and products over their physical counterparts. 

It is clear that increased access to the internet presents both opportunities and challenges for business owners in all industries. On the one hand, there are promising prospects available through online marketplaces and improved customer engagement tools; on the other, businesses need to stay up-to-date with current technologies to remain competitive in this quickly changing environment or risk being left behind.

Cryptography is the practice of using algorithms to encrypt and decrypt messages, allowing secure communication between two or more parties without anyone gaining unauthorized access to the exchanged information. Modern cryptography is based on public key infrastructure (PKI), which includes encryption, digital signatures, and hashing algorithms that help secure data over networks, especially those used by companies to transmit sensitive customer information and confidential documents. Security in cryptology can be broken down into three categories: confidentiality, authenticity, and integrity. 

Confidentiality means maintaining secrecy regarding the contents of a message exchanged between two or more parties by encoding it so that any unintended recipients cannot read it. To ensure confidentiality in cryptography, encrypting algorithms are used to encode messages with a secret key, making them unreadable when intercepted by an intruder or hacker. 

Authenticity refers to the verification that a message has not been tampered with as it travels from its originator to its recipient. Authentication ensures that only the intended sender and receiver of a message can send or receive it successfully by using hashing algorithms and digital signatures to verify originality. 

Integrity deals with protection against any malicious modifications of data during transit from one location to another or at rest on storage systems such as servers within business networks. This requires robust checksum techniques being applied to detect changes before they become visible after decryption has taken place on the receiver’s end, ensuring no accidental errors were made along the path. At the same time, data was transferred, as well as preventing tampering attacks before they cause financial losses or other damages due to privacy breaches resulting from leaked confidential information like personal details found on credit card records, etc. 

Today’s cryptographic security solutions have become increasingly sophisticated as hackers continue to find new ways of breaching systems and stealing valuable data resources from corporate networks spread across multiple locations worldwide.

It is, therefore, essential for companies to evaluate their cryptographic security needs regularly to ensure they are using the most cutting-edge tools available to protect their communications and maintain high levels of security throughout their networked environment. 

This way, potential malicious threats posed by cybercriminals attempting unauthorized access can be thwarted. Company server farms connected via web applications hosted online through global internet connections often require constant supervision from IT personnel responsible for organizational safety, who may otherwise find themselves vulnerable in hazardous situations if the necessary preventative measures aren’t taken. 

Organizations must prioritize the reduction of damage caused by criminals who employ sophisticated strategies to breach protocols and commit acts of theft quickly and effectively. An adequate system must be established before any potential victimization occurs, guaranteeing speedy benefits for everyone involved with a project while ensuring data protection at all times with minimal expense.

Wireless charging is a technology that allows for the transfer of electrical energy from one source to another without using connections or cords. The technology has been around since Nikola Tesla first unveiled it in the late 1800s; however, with advances in modern electronics and various scientific discoveries, wireless charging has become increasingly popular. A variety of industries have been able to benefit from this technology, including telecommunications companies, manufacturers, retailers, and many more.

The major advantage of wireless charging lies in its numerous features. For example, it eliminates the need for wires and cables, which can often be cumbersome and messy. Wireless chargers are also typically more efficient than traditional wired versions, as they help reduce power consumption by up to 40%. This helps them save costs while providing users with convenient access to electrical power wherever they go. 

This newfound convenience has already made its mark on businesses across the globe by allowing organizations to provide customers with devices that are both easy to use and efficient, while still being reliable enough to withstand any potential interruptions or failures that may occur due to their environment (or lack thereof). On top of this, wireless charging also provides an added layer of safety compared to traditional wired options, as there is no risk of electric shocks associated with using cords or plugs because no direct contact needs to take place between the charger itself and any other surfaces. 

Using wireless systems can be costly compared to wired systems, making it difficult for companies with limited budgets to obtain high-quality solutions without sacrificing other resources. In addition, since most technologies rely on electromagnetic radiation, the signals may travel further than anticipated and cause reception problems due to interference from other electrical sources such as radios.

As a result, additional costs may arise to install protective shielding for optimal performance; however, these issues can often be avoided if the technology is properly implemented in an appropriate scenario, like daily office use in an enterprise building.

Examples of technological factors affecting business

Technological factors affecting apple.

The development of new products by competitors can be one of the most significant technological factors affecting Apple’s control over the market . When rivals unveil new products with similar features or designs as those produced by Apple, customers may opt for cheaper alternatives instead. With fierce competition from companies such as Samsung and Huawei in recent years, Apple has had to work harder to remain competitive in consumer electronics markets while maintaining its reputation for premium quality goods. 

With mobile technology becoming increasingly important in today’s digital age, traditional personal computers are losing some of their relevance. This shift in consumer preferences towards mobile devices like smartphones could cause a decrease in interest surrounding particular newly released Mac laptops or desktops due to potential buyers being more interested in purchasing an iPhone instead. Consequently, this may lead to less revenue being generated through these product lines when compared with previous years. 

Apart from this challenge, Apple faces another critical issue in regard to its restrictive operating systems (OS). While iOS is widely used among all users who have compatible devices when compared to Android OS users having access to the entire Google Play Store , there are limited options for app developers to create apps on their devices since there isn’t an official method of sideloading apps other than the App Store without jailbreaking, which could potentially void customers’ warranties with the manufacturer if discovered.

This ultimately limits the type of innovative solutions that can be created for iOS, making it hard for Apple to keep up with rival firms making use of more open platforms like Android OS and thus giving them the edge when it comes to production processes or even product launches. 

Apple’s operations are also further impacted by additional technological factors, such as the security threats posed by an increasing number of cybercriminals, which have resulted in an increasing number of maliciously accessed data; this could lead to tarnishing their public image in the industry, despite their best efforts to put safeguards in place.

Technological factors are essential elements to consider when conducting a PESTLE analysis . As highlighted here, technological advancements can have both positive and negative effects on businesses.

On the one hand, advances in technology can help improve efficiency, expand into new markets, and create more opportunities for businesses to grow and develop. However, there is also the risk of disruption from competing products, which can lead to significant losses if not managed properly. Nonetheless, understanding the implications of technology on business operations and strategies is essential if companies are to remain competitive in an increasingly digital world.

Who is Daniel Pereira ?

I love understanding strategy and innovation using the business model canvas tool so much that I decided to share my analysis by creating a website focused on this topic.

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Technological Environment of Business: Definition, Factors, Examples, and Strategy

Table of Contents

What is a Technological Environment?

The technological environment of business encompasses external elements within technology that impact business operations. Changes in technology can reshape how a company operates, prompting significant shifts in the organization’s strategies.

It resides in the company’s external realm , is tied to technological developments, and holds the potential for both threats and opportunities. This facet is a vital component of the business environment , influencing operations and functions.

As a key aspect of PESTLE analysis , technological factors wield substantial influence on businesses globally, especially in today’s tech-dependent scenario. This realm signifies the state of technological advancement and its impact on a country’s economy, shaping progress in both scientific and economic realms.

How Technological Environment Affect Business?

The technological environment transforms businesses by shaping how they operate. Innovations impact everything from production to customer interactions. It can lead to higher productivity, cost reduction, and new product offerings.

However, it can also render existing products obsolete. Businesses must adapt to automation, digital marketing, and remote work. Staying current with tech trends is crucial for growth and competitiveness.

Related: Socio-Cultural Environment of Business

Factors of Technological Environment

Let’s look at the six key factors of the technological environment which affect the operations of organizations.

Innovations and Advancements

Technological innovations like new inventions and discoveries can revolutionize how a business operates. They bring opportunities for improved products, services, and processes. For example, the introduction of smartphones led to new ways of communication and changed how companies interact with customers.

Automation and Efficiency

Automation involves using machines and software to perform tasks previously done by humans. It boosts efficiency, reduces errors, and saves time. For instance, factories now use robots for assembly, leading to faster and more precise production.

Digital Transformation

Businesses are adopting digital tools and platforms to streamline operations and engage with customers. Digitalization enables online sales, data analysis, and personalized marketing. Companies that embrace this trend often have better customer experiences and reach a wider audience.

Data Management and Analytics

The ability to gather, analyze, and utilize data is crucial. It helps in making informed decisions, predicting trends, and understanding customer preferences. For instance, e-commerce platforms track user behavior to recommend products, enhancing sales.

E-commerce and Online Presence

The rise of e-commerce has transformed the way businesses sell products. Having an online presence through websites and social media is essential for reaching a global audience. This impacts sales, brand visibility, and customer engagement.

Cybersecurity and Privacy

As technology advances, so do cyber threats. Protecting sensitive data and ensuring customer privacy is paramount. Companies invest in cybersecurity measures to prevent breaches that could damage their reputation and result in financial losses.

Related : Economic Environment of Business

Examples of Affecting Technological Environment On Business

Here are four examples of how the technological environment affects businesses:

E-commerce Revolution

The rise of e-commerce has transformed the way companies sell and customers buy. Online shopping platforms allow businesses to reach a global audience and provide customers the convenience to shop from anywhere, impacting sales and expanding market reach.

Technology enables the automation of tasks, from manufacturing to customer service. Machines and software handle repetitive jobs, reducing errors and saving time. This efficiency leads to cost savings for businesses and improved quality for customers.

Data-driven Insights

Advanced tools let businesses collect and analyze data about customer behavior and market trends. This information helps in making informed decisions, creating personalized marketing strategies, and tailoring products and services to meet customer preferences.

Digital Marketing Dominance

Traditional advertising has shifted to digital platforms. Social media, search engines, and online ads reach target audiences more effectively. This change in marketing channels requires businesses to adapt their strategies, engaging customers through various online avenues.

Read Also: Political Environment of Business

Strategies To Minimize the Threats of Technological Environment

Along with various benefits, technological factors also provide threats to business organizations. Companies must overcome these threats in order to be competitive. Here are the five strategies you can employ in your business.

Continuous Learning and Adaptation

Stay updated about technological trends through regular learning. Embrace new tools and practices that align with your business goals. This flexibility ensures your company is prepared to adapt swiftly to changing tech landscapes.

Diversification and Redundancy

Don’t rely solely on one technology or platform. Have backup systems in place to ensure smooth operations if a technological failure occurs. This minimizes the risk of disruptions affecting your business.

Cybersecurity Measures

Invest in robust cybersecurity to protect your digital assets. Use strong passwords, encryption, and firewall systems to shield sensitive information from potential threats like data breaches or hacking.

Customer-Centric Approach

Understand your customers’ preferences and how they use technology. Tailor your products or services to meet their needs, making it more likely they’ll continue engaging with your business in the face of changing tech trends.

Collaboration and Networking

Connect with peers, experts, and industry associations. Collaborate to share insights and potential tech challenges. By working together, you can gain a collective understanding of how to navigate and address threats in the technological landscape.

Read Next: 10 Pros and 7 Cons of PESTLE Analysis

Sujan Chaudhary is a BBA  graduate. He loves to share his business knowledge with the rest of the world. While not writing, he will be found reading and exploring the world.

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How and Where to Write About Technology in Your Business Plan

6 min. read

Updated October 27, 2023

Often, a business plan introduces a new technology that requires some explaining.

On one hand, as a reader of business plans for investors, I see way too many business plans that ask a reader to wade neck-deep through technology to get to the business. That’s a great way make your reader run in the other direction! It’s a business plan, not a term paper or thesis. Establish technology as a differentiator, when it is. Tell me about it in relation to its importance to the business. Don’t force me to understand it when I don’t need to.

On the other hand, as a writer, manager, and user of business plans as tools for steering a business, I believe you should discuss your technology in the plan for any business. Even if technology isn’t the driving force of your business or your main differentiator, these days, almost all businesses have to manage technology as part of branding, marketing, and communications.

To the extent that technology matters, I want to see it in the priorities and in specific milestones. Are we developing what we should? Are we using what we should? Are we competitive with tools and process?

• Let your business purpose be your guide

The point of my opening paragraphs is that the right way to handle technology in a plan depends on the context of the plan. As always, in business, form follows function.

As you develop technology descriptions, priorities, milestones and such in your own business plan, consider first the business plan’s purpose.

Business plans aren’t all the same. They are used for different things, such as:

• Some business plans are intended for outsiders, as summary and description of the business, to serve the purpose of raising money with investors, backing up a commercial loan document, and so forth. In these cases the purpose of describing your technology is validation, proof of value; you’re making your technology part of the reasons that your business is a good investment or a good risk for a loan.
• Most business plans are intended to optimize management and allow business owners and management teams to better steer the business. For these plans, technology is not describing, but rather planning, setting milestones, dates, priorities, directions, and so forth.
• Technology in a plan for outsiders

Investors, bankers, and other outsiders look at technology as part of the secret sauce, the things that make your business better than competitors, defensible, or differentiated. They want to know about the technology for its business impact. But they rarely want to wade through the ins and outs of how that technology works and evaluate it for themselves. They want to know about the technology, not know the technology. The only exception is the technology they know and work with themselves.

To explain the difference, let’s take me as an example:

I’m a software entrepreneur, and, in recent years, a member of an angel investment group. I looked to scientists in the group to evaluate technology when we invested in molecular chemistry that can ease the pain of chemotherapy. I get involved in detail when the group is looking at startups in software, web, mobile apps, or financial forecasting.

When a business plan involves expertise in software, the web, apps, and technologies related to financial forecasting, I’m curious, and I’ll look for an appendix with interesting details. I’ll join in the due diligence for my angel group, test for myself, and develop my informed opinion. In fact, during my consulting years in the 1980s and 1990s, I had multiple consulting engagements with venture capital firms that contracted me to evaluate software as an expert.

When a business plan involves pharmaceuticals, medical electronics, biotechnology, clean energy, and so many other technologies that aren’t within my areas of expertise, I validate as I suggested above, with background checks, patents, and so on. I don’t, however, wade through scientific documentation.

I’m comfortable with what I don’t know. When it involves my specific investment group, I trust other members who do know.

The detailed look at the technology comes during due diligence, not in the plan or during the pitch. For plans and pitches, we look for the patents, customer testimonials, and backgrounds and achievements of the team as validators. We want to see those for sure, and we expect good summaries as part of the business plan discussion of product-market mix, or company background (in either section, whichever seems better to the founders). Technical background and technical details go into appendices, or extra docs used for due diligence, not the main body of the plan.

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• Technology in business planning for owners and managers

For business owners, I recommend a lean business plan as a dashboard and GPS. It’s just big enough to steer the business. It skips the text summaries and descriptions you won’t need because it’s for your own use only. It’s reviewed and revised frequently. It includes strategy and tactics as summary bullet points to serve as reminders. It includes milestones and schedules too.

Since the lean plan is just for you and the team, not for outsiders, it doesn’t necessarily include or cover your technology. Does your technology differentiate your business from all others? Is it vital to staying competitive? Does it create barriers to entry? Does it create competitive advantage? If you answer yes to any of those questions, then you are probably already managing technology as part of your strategy and tactics. So you include bullet points related to technology in your lean plan, in strategy, tactics, milestones, and schedules.

For example, tech businesses managing product development road maps, research and development teams, extending software features or tech features in hardware would be likely to build strategy and tactics around technology. More traditional businesses, on the other hand, such as real estate, restaurants, or personal training, would be less likely, on average.

But, even within traditional businesses, some innovative leaders set themselves apart for the use of new technology. Maybe the real estate brokerage is working on its app to show houses, or the restaurant is developing new techniques for cold pressed processes. Maybe the personal trainer is offering subscriptions to remote workouts.

The key to where technology goes into your lean plan is the execution and management. You don’t describe for description only. Instead, you list tasks and deadlines and action points. If there are none of those related to technology in your business, then leave it out of the lean plan.

• Stick with the business purpose

Remember, a business plan is about business. It’s not a forum for showing off. Even in the case of a show-off business plan for angel investors, keep to the business side of it. The business plan is about what you’re going to do, not what you know.

Give the investors what they need to know, and spare them from the rest. They’ll thank you. For you business owners and managers, how you develop and manage technology is a critical factor for steering the business. Make sure you plan for it, with reinforcement in strategy, tactics, and milestones to develop accountability and keep you on track.

Tim Berry is the founder and chairman of Palo Alto Software , a co-founder of Borland International, and a recognized expert in business planning. He has an MBA from Stanford and degrees with honors from the University of Oregon and the University of Notre Dame. Today, Tim dedicates most of his time to blogging, teaching and evangelizing for business planning.

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Technological Factors Affect Business Environment

Technological factors are variables that are being used for evaluating available alternatives with respect to technological capabilities. Organizations consider it an important tool for improving operations and functions. Technological factors are one of various external environment factors that affect businesses greatly and are also an integral component of the PESTLE analysis . In the present scenario, utmost dependence on equipment, technological factors can have more effect on business operation and success globally than ever before.

Table of Contents

How Technological Factors Affect Business Environment

Technology trends affect businesses on many levels. When an employee is efficient, he turns out to be productive. Additionally, when a business is more in touch with its present and potential customers, the more chance it has to build a strong customer loyalty base. Advancement of technology can make this possible. Strategic leaders are constantly looking for development and updates within the technological environment. In this way, they not only improve their operations but, they will also be well aware of business transformational phase. They will derive groundbreaking strategies to grow exponentially.

Technology Transforms Operations

The technological environment of business has changed the way in which businesses function. Advancements in information technology have almost taken over every department of the organization. Now, information is stored in data servers and cloud technology as against the old way of storing data in registers and files.

Furthermore, development of technology has also introduced digital marketing strategies through which companies are able to sell their products and services. Even the research and development R&D divisions in companies have changed its way of functioning and more advanced techniques in the development of products and services have been introduced only through technological advancements.

For example, Siemens and Boeing are hugely investing in the adaption of 3D printing technique for product designing. They believe that this will accelerate the designing process, reduces production cost as well as improves the effectiveness of designing.

Technology helps in Developing Marketing Strategies

Technology has brought in a transformation through which companies collect, record, retrieve and utilize data and which also helps them in coming up with groundbreaking business strategies. Through available data, companies are able to monitor and evaluate customer trends and their demands for a particular product. Thanks to the development of information technology, businesses can understand consumer behavior and conduct a macro environment analysis and develop marketing strategies accordingly.

Technology is not only useful for collecting and using data but, it is also being used by organizations to analyze data and make meaningful conclusions as well as informed decisions. Having more focus on the customers, business strategies will certainly prove out to be effective for the success of an organization.

Negative Impact of Technology on Business

Technological environment imposes positive effects on a business. Internet makes the communication process smoother and easier. Despite all the pros, technology has on the business environment, it also imposes some negative impacts as well.

Business Relationships.  Internet technology like Skype and other chat rooms have made it possible for businesses hold meetings without having all the parties be physically present at the same place. This type of meeting is less personal as compared to a face-to-face meeting. In this way, the personal aspect of business relationships tends to reduce. Lack of physical proximity has reduced brainstorming and another form of communication which involves personal touch.

Brick and Mortar.  Advancement in e-commerce technology holds a negative impact on brick-and-mortar stores . Small-scale businesses are finding it very difficult to compete with both online and larger businesses in the industry that are operating both in person and on the internet. This advancement in the technological environment of business eventually forces small organizations to go out of operation.

Examples of Technological Factors

Regardless of what your company is selling or offering it will be benefited immensely by using different types of technological factors.    

• Internet : almost every business today has a website which helps them in making and maintaining a global presence. Utilizing the social media platform businesses can easily communicate with their targeted audience. In addition to this, through internet technology, you can also easily communicate with your employees, clients and co-workers in other countries.
• Automated Process : Automating various production lines allow companies to replace human unskilled tasks with completely machinery ones. This benefits the company by reducing the cost for manufacturers, suppliers, retail stores as well as other parties involved. This factor, however, imposes a negative impact on the employment level of an economy.

How Technological Factors affecting Tesco

Tesco is a British multifaction and merchandise retail company . Technological advancement brings Tesco new opportunities.

• Firstly , started FRID retail technology and added FRID tags to its product range. RFID technology automated administrative task like stock counting.
• Secondly, customers can pay as they want. Tesco launched PayQwiq a mobile payment platform application in more than 524 stores. Consumers can download the PayQwiq app and linked Clubcard or NFC technology. It allowed customers to pay for their shopping and get loyalty points.
• Thirdly,  "scan as you shop" are checkout points that provided convenience for customers and minimized labour cost.

About The Author

Ahsan Ali Shaw

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PESTEL Framework: The 6 Factors of PESTEL Analysis

The PESTEL framework (political, economic, social, technological, environmental, legal) helps managers assess how external factors affect a business.

The PESTEL framework is a strategic planning tool for analyzing an organization's external business environment. By identifying six key external factors that greatly impact business operations and performance, the framework will facilitate an easier and more efficient decision-making process.

What is the PESTEL Framework?

The PESTEL framework, or PESTEL analysis, is a business planning template that identifies and assesses how Political, Economic, Social, Technological, Economic, and Legal factors are affecting an organization or industry.

Depending on the analysis results, businesses can improve their strategic management and planning while responding to forces that are out of their control and gaining a competitive advantage.

PESTEL Framework External Factors

PESTEL factors are often present in other types of similar analyses. Business managers can choose any, based on the nature of the organization and the factors they wish to study. These different frameworks help to identify key factors to acknowledge, understand, and potentially use to their advantage. These include:

• STEP or the more popular PEST analysis that misses the Legal and Environmental factors
• STEEP analysis is based on the PESTEL framework minus the Legal part
• STEEPLE analysis adds the Ethical factors
• STEEPLED analysis includes the same factors plus ethical and demographic factors

What exactly are the categories in the PESTEL framework? Each is unique and offers a broad understanding of factors involving politics, economy, social traits, tech uses, environment, and legalities.

I have discussed some characteristics of these external factors below.

For a more detailed breakdown of these factors, check out this article about external factors in more detail. The article will help you determine which factors are more important to the company's specific strategy. This might serve as preliminary inspiration. However, you will have to dig deeper into the details to make accurate decisions.

Political Factors in PESTEL Framework

Politics plays an important role in business.

This is because there is a balance between systems of control and free markets. As global economics supersedes domestic economies, companies must consider numerous opportunities and threats before expanding into new regions. Political factors may even help determine the location of corporate headquarters.

This category can sometimes combine laws (from the legal group) since the government and their bills are closely linked. In general, you should focus on the political trend the current administration is leaning toward. Is the current government favoring open trade or focusing more on border control? Are they expected to stimulate the economy, or are they looking to improve the health system? Do they care more about corporations or about the workers?

Some of the political factors you need to watch and include in your PESTEL framework are:

• Stability of government and change of leadership
• Government policies
• Trade tariffs
• Tax policies
• Regulations
• Social policies (e.g. social welfare etc.)
• Trade regulations (e.g. the EU & NAFTA)
• Labor regulations
• Political trends

Political factors examples in PESTEL analysis

• Tax Policy : A government may increase corporate taxes, affecting company profits and potentially discouraging foreign investment.
• Trade Regulations : The imposition of tariffs on imported goods can increase production costs for companies relying on foreign raw materials.

You may find a more extensive list of political factors and how they affect businesses here .

Economic Factors in PESTEL Framework

Economic factors are metrics that measure the health of any economic region.

The economic state will change many times during the organization's lifetime. You must compare the current levels of inflation, unemployment, economic growth, and international trade to better carry out your strategic plan.

General economic factors, such as goods, services, monetary value, and currency, will affect any business or product. Indicators like exchange rates, GDP, and inflation are critical to management. They can tell when it is a good time to borrow and help determine how an economy might react to certain changes.

Some examples of economic factors you can take into account in your PESTEL framework are:

• Disposable income of buyers
• Credit accessibility
• Unemployment rates
• Interest rates
• Exchange rates

Economic factors examples in PESTEL analysis

• Interest Rates : Higher interest rates can increase borrowing costs, leading to reduced capital spending by businesses.
• Economic Growth : An uptick in economic growth can boost consumer spending, leading to higher demand for products and services.

You may find a more extensive list of economic factors and how they affect businesses here .

Social Factors in PESTEL Framework

Social factors assess the mentality of individuals or consumers in a given market. These are also known as demographic factors. This category focuses on buying behavior and how consumer needs can affect the value and necessity of a product or service. The following are some social factors to focus on in your PESTEL framework:

• Population demographics: (e.g. aging population)
• Distribution of Wealth
• Changes in lifestyles and trends
• Educational levels
• Cultural differences
• Ethnicities

Social factors examples in PESTEL analysis

• Demographic Shifts : An aging population may increase demand for healthcare services and products tailored to senior citizens.
• Cultural Trends : A growing trend towards sustainability can influence consumer preferences, leading businesses to adopt greener practices.

You may find a more extensive list of social factors and how they affect businesses here .

Technological Factors in PESTEL Framework

This step entails recognizing the potential technologies available. Technological advancements can optimize internal efficiency and prevent a product or service from becoming obsolete. The role of technology in business is increasing each year, and this trend will continue because R&D drives new innovations.

Recognizing evolving technologies to optimize internal efficiency is a great asset in management. But there are a few threats. Disruptive innovations such as Netflix affect DVD players' business. The best strategy is to adapt to the changes. Your strategies should sidestep threats and embrace opportunities.

Technology is continuously evolving — and not just digital technology, although the use of applications, websites, and similar products is on the rise. But even technology related to manufacturing, distributing, or communicating with consumers/employees must be considered too.

This is a large challenge for management. Below is a list of common technological factors to become part of a PESTEL framework:

• New discoveries and innovations
• Rate of technological advances and innovations
• Rate of technological obsolescence
• New technological platforms (e.g. VHS and DVD)

Technological factors examples in PESTEL analysis

• Advancements in AI : New artificial intelligence technologies can streamline operations and improve efficiency in industries like manufacturing and customer service.
• Cybersecurity : Rising threats in cyber security can compel businesses to invest significantly in secure IT infrastructures to protect sensitive data.

You may find a more extensive list of technological factors and how they affect businesses here .

Environmental Factors in PESTEL Framework

Sometimes referred to as ‘ecological’ factors as well, these PESTEL external factors involve physical changes. Think less of the workplace environment—which would apply to communication among employees—and more about how locations are affected.

Both consumers and governments penalize firms for adversely affecting the environment. Governments levy huge fines upon companies for polluting. Companies are also rewarded for having a positive impact on the environment. Consumers are willing to switch brands if they find a business ignoring its environmental duties.

The impact on the environment is a rising concern. Note that the environment benefits the company too. Running water for a hydro-power plant is an example.

A few common environmental factors of the PESTEL framework are:

• Waste disposal laws
• Environmental protection laws
• Energy consumption regulation
• Popular attitude towards the environment

Environmental factors examples in PESTEL analysis

• Climate Change : Increasing awareness of climate change can push companies to reduce carbon emissions and adopt more sustainable practices.
• Regulations on Waste : Stricter environmental regulations regarding waste management may require companies to invest in new recycling processes and technologies.

You may find a more extensive list of environmental factors and how they affect businesses here .

Legal Factors in PESTEL Framework

This final step involves learning about the laws and regulations in your region. In other words, ways in which particular laws may affect business, ideas, or concepts. It is critical to avoid unnecessary legal costs. The laws are created by policymakers and government bodies, which is why they are sometimes weaved within the political section of PESTEL analysis. But the regulations here focus on the well-being of consumers or society rather than benefiting the agencies that crafted the laws.

This is the last factor in the PESTEL framework. These factors overview the legal elements. Often, start-ups link these elements to the political framework. Many legal issues can affect a company that does not act responsibly. This step helps to avoid legal pitfalls. You should always remain within the confines of established regulations.

Common legal factors that companies focus on include:

• Employment regulations
• Competitive regulations
• Health and safety regulations
• Product regulations
• Antitrust laws
• Patent and Copyright infringements
• Import/Export laws

Legal factors examples in PESTEL analysis

• Data Protection Laws : New regulations like the GDPR impose strict rules on data management, affecting how companies collect and handle personal information.
• Employment Laws : Changes in labor laws, such as minimum wage increases, can impact operational costs and hiring practices.

You may find a more extensive list of legal factors and how they affect businesses here .

Why use the PESTEL Framework and How to do a PESTEL analysis

When you go through each of the six categories and apply the insights to a business, product, or concept, you will understand what is standing in the way of its success.

Conducting a PESTEL analysis is a pivotal step before making significant decisions or embarking on major projects. Understanding all the influencing factors is the first step to addressing them.

While you can’t change fixed external elements like copyright laws, taxes, or inflation rates, understanding their direct impact on a business each quarter is paramount. For example, you can understand what percentage of taxes will cost your business each quarter and what it means for the economy as a whole if inflation rates skyrocket and how that impacts the business world.

With this understanding in place, you can use it to your advantage. Especially in comparison to competitors who may not leverage the richness of insights provided by a PESTEL analysis .

Remember, there are many factors other than these which can have an effect on business success.  The evaluation is a one-to-one process; what proves beneficial for one company might pose significant challenges for another. Identifying factors with strategic and competitive implications allows you to tailor your business strategies effectively.

Undertaking a PESTEL analysis is a comprehensive endeavor due to the complexity of the macro-environment. However, mastering this framework helps you systematically identify each opportunity and threat, enabling a structured and strategic approach to business planning.

Once you have mapped out the PESTEL framework, it becomes a foundational tool for strategic development. The insights derived from analyzing macro-environmental factors will inform and shape your business strategies, ensuring they are as responsive to current and future external conditions as possible.

If you’re gearing up to align a company’s strategies or simply aiming to enhance your decision-making process, starting with a PESTEL analysis is a prudent move. Armed with a deeper understanding of your operational environment, you’ll be better positioned to make informed, strategic decisions. For a practical guide and resources on how to conduct a PESTEL analysis, check out this step-by-step guide —it’s an investment in knowledge that pays the best interest for your business’s future. Also make sure to check out examples of PESTEL analysis here .

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More Like this

What is a pestle analysis a complete pestle analysis guide, what is a pestle analysis.

A PESTLE analysis examines external market factors – including Political, Economic, Social, Technological, Legal, and Environmental – and market trends that might impact your organization’s direction, performance, and position in the marketplace.

Used in tandem with a SWOT analysis, it helps your organization examine external factors that could influence your organization’s opportunities and threats. We get that a PESTLE Analysis is just another acronym that might seem silly, but it is a helpful tool to help you holistically conduct market research and understand what forces your organization currently faces.

In this article, we’ll dig into what is a PESTLE Analysis, what each factor covers, and how to use it as part of your approach to considering internal and external factors for your strategic planning process.

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So why do I need to conduct a PESTLE Analysis?

The last few years have been a whirlwind of change and uncertainty – a global pandemic, natural disasters, looming recession, war, inflation, and more. Organizations have faced a great deal related to external market factors directly impacting their organizations. Current events have been stressful enough for any organization to worry about, whether you’re well-established or new in your market.

While the global situation is intimidating for many current and future leaders, this helpful analysis can help you assess and plan for what might impact your organization – and either seize those forces as opportunities or work to mitigate them as threats. Using a PESTLE allows you to look ahead at challenges your organization may encounter and create strategies to address them.

Pro Tip: We covered using this tool a few years back during the start of the COVID pandemic. This article has some helpful tips on using this analysis to examine market megatrends.

PESTLE Definition and Framework – How to Use this Tool

[also known as the pestel framework, pestle model, or pest framework].

As we mentioned earlier, this analysis looks at the external Political, Environmental, Social, Technological, Legal, and Environmental factors that would influence your organization’s strengths and weaknesses. A PESTLE Analysis is best used in tandem with your SWOT Analysis . As demonstrated below, this framework looks at the macro-trends in your operating environment.

This framework has evolved over the years from a PEST Analysis to a PESTEL Analysis, which adds other market considerations and long-term impact.

As you complete your planning process, this looks at the external analysis portion of your environmental scan – also known as what is happening in your market.

Pro Tip: A PESTLE Analysis looks at external market forces, so they will not influence your organization’s internal strengths or weaknesses . Strengths and weaknesses come from traits or characteristics your organization already processes. A PESTLE Analysis framework only examines the external market.

What are Political factors?

Political factors are those brought on by the government or politics. These are the external political forces affecting your organization, including governmental policies, government leadership, foreign trade and foreign relations, political issues and trends, tax policy, regulations, and de-regulation trends.

A few examples might include the influx of capital from the Paycheck Protection Plan, the change in tariffs on imports from China, and the war and conflict from Russia’s invasion of Ukraine.

Questions to ask:

• What shifts have occurred in the political climate?
• How might those shifts impact our organization? Are they headwinds, or tailwinds?
• Are they short- or long-term plays?
• What are the political threats you should monitor?

What are Economic factors?

The economic factors look at the external forces that can impact the economy your organization operates in. Examples include rising inflation rates, changes and shifts in consumer spending, changes in the supply chain, demand curves, and the health of the global economy.

These economic factors can look at the local economy, national economy, and global economy.

• What is the current health of the economy? How might that impact our organization?
• How will things like labor costs, interest rates, and economic growth rates impact our organization?
• What economic information should we look at or consider?
• Are there headwinds or tailwinds in our supply chain?
• What local economic factor might impact our business?

What are Sociological factors?

Sociological factors (social factors) consider the changes in the greater social environment, such as social justice movements or other social trends like changing opinions on your product or shifting populations and demographics. It’s essential to consider sociological trends that are at play—not just in your organization’s immediate environment—but also in the broader environment that your customers are coming from.

• Are there changing trends in our market’s demographics or population? How best do we serve them?
• How are changing social factors going to impact our organization?
• What shifts can be observed in consumer behavior, sentiment, or opinion?

What are Technological factors?

Changes in technology impact a business’s positioning. Some recent examples are the rise of cryptocurrency (which can also fall into the economic category), the emergence of popular work-from-home technology, AI technology, the increased use of artificial intelligence, and even concerns over cyber security or other technological issues. It is important to consider how technology can prove to be both an opportunity for your organization, or a threat to it.

• How has the technology in our market changed? Is that an opportunity or threat?
• Are you using available technology to its full advantage?
• How much does emerging technology impact your organization?

What are Legal factors?

While similar to the political aspects, the legal elements look at the practical application of the political forces into rules and regulations that may affect your business or customers. These are the laws and regulations that impact your organization.

This could include updated laws, new regulations, or abolishing laws. Depending on your business, local, state, and federal laws and regulations are worth scrutinizing.

• What changes in our international, national, and local legislation impact our organization?
• What government policies do we need to consider?
• What is our regulatory environment like?
• What does the political stability of our environment look like?
• How are these legal changes going to impact our organization positively or negatively?
• What legal forces may be on the horizon?

What are Environmental factors?

Environmental factors are affected by weather, geography, climate change, and health crises. Environmental regulations, including laws and policies related to pollution, waste management, and conservation, play a significant role in shaping these factors. In addition to the public health crisis caused by the COVID pandemic, the world has also been impacted by wildfires across the globe.

Environmental regulations are a critical component, impacting geographical locations, natural resources, and sustainability efforts.

Organizations should consider the short-term and long-term impacts of these accelerating changes, e.g., rising ocean levels, drier and warmer seasons, and yearly weather conditions such as hurricanes and typhoons.

• What environmental factors are impacting us right now?
• What is the environmental impact of industry like? What is the impact on our natural resources?
• What environmental factors might impact us in the future?
• What environmental factors do we need to monitor?

Bonus – What are Ethical factors?

Over the last few years, business and marketing strategy experts have added a third ‘E’ to the PESTLE – the ethical factor. This can include things such as fair-trade practices, child labor issues, even society’s increasing demand for conscious business models, and corporate social responsibility.

• What external factors are your business ethics?
• What changes to your business or suppliers might you consider as key factors to your ethics? IE – fair trade suppliers?
• What kind of impact or example do you hope your company may set?

Advantages and Disadvantages of a PESTLE Analysis

What are the advantages of using a pestle analysis.

There are several advantages to conducting this analysis for your business. Here’s a breakdown:

• It is a simple and straightforward framework that is easy to implement into your strategic plan.
• It also allows you and your team to facilitate a great understanding of the wider business environment and how current events can potentially affect your business.
• Additionally, it helps organizations anticipate business threats and figure out how to mitigate the risks. Plus, it helps organizations spot business opportunities on which they can capitalize.

What are the disadvantages of using a PESTLE Analysis?

While it’s a great tool, here are a few of the disadvantages to using this:

• This assessment can be as light or as heavy as one wants to make it.
• It is easy to oversimplify the data or collect insufficient data.
• It is also easy to make it too heavy by collecting too much data and becoming so overwhelmed that you don’t know where to start. This is a phenomenon called ‘analysis paralysis.’
• It’s a great tool, but it doesn’t analyze your organization’s internal strengths and weaknesses. That’s why we recommend using it in conjunction with your SWOT Analysis.

Best Practices – When and How to Use this Assessment:

You should conduct your PESTLE Analysis in the pre-planning stages of your business or strategic plan with a SWOT Analysis. A SWOT looks at your organization’s internal strengths and weaknesses and the external opportunities and threats the market presents. This will be an excellent companion piece to your SWOT as it informs your SWOT by looking at all aspects of the external market environment.

So, when conducting your analysis, break down each factor and look at both the positive aspects you can leverage (the opportunities) and the pitfalls to avoid (the threats) within the political, economic, social, technological, legal, and environmental spheres. If you want to see some real world examples, check out our PESTLE Analysis Examples .

While this exercise is typically conducted in the beginning stages of a strategic plan, it is best to set a regular cycle to check in and revisit it. With the speed at which things are constantly shifting and changing, the analysis you conducted five years ago may need to be revised today. It is best to update it at a minimum every three years. Or, when you update your SWOT. It can be helpful to look at these trends annually, too. Make it a habit to keep a pulse on current events and market changes, so you always know what is going on in your market and how it will affect your organization.

Conclusion: Where does PESTLE Analysis fit into strategic planning?

Leveraging your PESTLE Analysis as the first step to your business and strategic planning process is the ultimate way to ensure that you know all the areas your business can capitalize on and which pitfalls you can work on to mitigate. This will help you get the complete picture of where your organization is playing and just what you need to ensure that you will win.

PESTLE Analysis FAQs

A PESTLE Analysis examines external market factors – including Political, Economic, Social, Technological, Legal, and Environmental – and market trends that might impact your organization’s direction, performance, and position in the marketplace. Used in tandem with a SWOT Analysis, it helps your organization examine external factors that could influence your organization’s opportunities and threats .

It also allows you and your team to facilitate a great understanding of the wider business environment and how current events can potentially affect your business. Additionally, it helps organizations anticipate business threat. figure out how to mitigate risks, and help organizations spot business opportunities to capitalize upon.

One of the disadvantages of a PESTLE Analysis is that it can be as light or as heavy as one wants to make it. It is easy to oversimplify the data or collect insufficient data. While it’s a great tool, but it doesn’t analyze your organization’s internal strengths and weaknesses. That’s why we recommend using it in conjunction with your SWOT Analysis.

This helpful analysis can help you assess and plan for what might impact your organization – and either seize those forces as opportunities or work to mitigate them as threats. Using a PESTLE allows you to look ahead at challenges your organization may encounter and create strategies to address them.

PESTLE Analysis is typically conducted in the beginning stages your strategic planning process to help evaluate your organization’s macro-market. It is best when used in tandem with your SWOT Analysis to examine the current state of your organization.

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5 advantages of technology in your business strategy

How adding technology as a core business strategy can take your company to the next level

By the team at Slack February 24th, 2023

As long as technology has been evolving, companies have been trying to keep up. But it was the Covid-19 pandemic that forced businesses of all sizes across all industries to shift to remote operations virtually overnight. Many employees are still working remotely, and quite a few plan to keep it that way.

According to a May 2021 Gallup poll , 52% of the entire labor force works remotely, with numbers higher than 80% in many industries. A stunning 35% of all workers want to stay remote long-term, rising to more than 50% in several fields.

When the pandemic hit, everyone was forced to scramble, doing the best they could with whatever technology they already had or could swiftly implement. This caused a fundamental shift in how we work, and companies have had to take a hard look at their business strategies. Business and technology are now inextricably linked, so it only makes sense to implement technology as a core part of a successful business strategy.

What is technology as a business strategy?

Technology as a business strategy refers to the concept of implementing technology in all levels of your business plan. Rather than putting technology in its own silo under the direction of the company’s chief technical officer (CTO) or chief information officer (CIO), it becomes a core component in all aspects of business operations.

Depending on the nature of your company, technology as a business strategy can generally be split into three core categories:

• Protection . Cyber hacks have become a common threat against companies of all sizes. Implementing technology as a core business strategy helps you direct resources toward security upgrades and training, as well as disaster planning and recovery. It allows you to develop security strategies for employees at all levels, across every department.
• Enhancement . With a largely remote workforce and a user base that became accustomed to shopping online during the pandemic, technology is more important than ever. Technology as a business strategy lets you plan for key rollouts that improve the experience for both employees and customers.
• Innovation . Unfortunately, even companies that have implemented tech tools for cybersecurity and enhanced operations are not taking advantage of in-house innovation. Carving out innovation periods every week, month or quarter lets your tech professionals both tinker with your existing tools and examine new options to provide the most-comprehensive solutions for your business.

Who’s doing it and why?

As you might expect, tech companies are leading the way in exploring the advantages of technology within their own business models. For example, at Slack, we are continually iterating on our IT and business technology tools.

Even as we strive to give our employees and customers the best possible experiences, we look at ways to improve how we scale, evolve with our users, and expand our areas of operational focus. To meet emerging needs, an internal tool called Slack on Slack helps us quickly build new bots, apps and other solutions within the platform.

But technology as a business strategy isn’t limited solely to tech companies. Whether you’re in manufacturing or customer service, technology is likely already part of your business. Implementing it as a core business strategy builds on what you’re already doing to streamline operations, add flexibility and rapidly adapt to changing circumstances (like a pandemic suddenly shutting down the globe).

5 advantages to putting technology in your business strategy

Adding technology to your business strategy can pay off for your company in a big way. Here are five major advantages of adopting technology as a business strategy.

1. Choose targeted technology solutions

The rapid evolution of technology has led to a seemingly endless number of products and solutions on the market. In a siloed company that walls off the IT department, team members have to make decisions based on relatively limited information. And each decision may solve only a single problem.

When you implement technology as a business strategy, you can make technology choices from a broader perspective. You know what you are trying to do, you have data to drive your decisions and you can look for solutions that meet multiple needs all at once. With time to iterate, you can also take advantage of the advanced capabilities of a platform like Slack, building customized solutions rather than grabbing yet another product to solve a specific issue.

2. Boost organizational productivity

You probably already know that technology can help drive productivity by providing you with data on sales figures, ROI and other crucial information. But did you know that technology can also help increase productivity at the individual level ? From bots that automatically send reminders about overdue tasks to apps that offer visual data on a project’s progress, implementing technology across all parts of your organization can help everyone perform their best.

3. Enhance collaboration

This is especially important with so many people working remotely. Platforms such as Slack and Zoom help everyone move forward in the same direction and ensure important tasks don’t get overlooked.

But technology as a business strategy also helps with customer collaboration. Consumers grew more comfortable with online shopping during the pandemic. Now is a great time to start using tools to more closely mirror the in-person shopping experience. From product videos to bots that serve as shopping assistants to real-time collaboration between designers and customers, technology can help your online shoppers feel important.

4. Set long-term goals and objectives

A solid business plan should include a series of short-, medium- and long-term goals, along with a road map for achieving them. But your technology plans may be more ad hoc right now, picking and choosing solutions when problems arise. Adding technology as a business strategy lets you scale your technology along with your business, anticipating needs and implementing strategies ahead of time.

5. Improve security

Today’s cyber attackers are more sophisticated than ever, and an old-fashioned security posture that relies solely on firewalls and antivirus software is no longer sufficient. Making technology a core part of your business strategy adds cybersecurity tools and training throughout your organization. Frontline workers and the C-suite alike are all informed about emerging threats and receive both the tools and the ongoing training they need to counter those threats.

Final thoughts

The pandemic accelerated everything from online grocery shopping to telemedicine in ways we could never have imagined. With customers now shopping online and a great deal of the workforce planning to continue working remotely, now is the time to prioritize technology throughout your organization. Rather than a siloed IT department, consider implementing technology as a core business strategy that runs throughout your organization.

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Ecommerce · Strategy · Consulting

PESTLE Analysis: The Macro-Environmental Analysis Explained

by Martin Heubel

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Unstable market conditions are one of the biggest threats to the success of any company. For decades, managers have used the PESTLE framework to assess the opportunities and risks of their organisation’s macro environment.

Events such as the Brexit referendum or the coronavirus pandemic have had a significant impact on the way companies operate. But even smaller changes such as the introduction of new laws or technologies can pose a significant threat and force companies to react quickly.

If political and macro-economic changes are not recognised by businesses and included in their strategic planning process , attentive competitors can easily take advantage of this shortcoming.

But worry not! Today, you’re going to learn how to analyse your businesses macro environment with the PESTLE framework.

This article will cover:

Political Factors

Economic factors, social factors, technological factors, legal factors, environmental factors.

• How to do a PESTLE Analysis (incl. Template)

What is PESTLE Analysis

The PESTLE analysis is a concept first mentioned by Harvard Business School professor Francis J. Aguilar. He introduced the framework back in 1964 in his book “ Scanning the Business Environment “.

Since then, the PESTLE analysis has become a popular strategic tool to assess the macro environment of organisations worldwide.

The framework categorises the six forces of p olitics, e conomics, s ocio-culture, t echnology, e nvironment and l aw.

The PESTLE framework begins with an analysis of the political landscape. That’s because the political stability of a country is probably the biggest priority for any commercial organization.

Unstable conditions or extreme changes in government direction pose a major threat to ongoing operations. They can also lead to a dependency on political goodwill, making it almost impossible to operate economically.

While this is less likely to be the case in democratic states, totalitarian states often have centrally controlled economic systems. These severely restrict any form of business activities or even make them impossible in the first place.

For example, in conflict regions where civil wars prevail, or political power changes are frequent, companies are better off building local distribution networks than setting up nationwide production facilities.

But also relatively stable political conditions can pose challenges:

Take the European Union as an example:

Different legislative, anti-trust, and tax guidelines apply in each country. German domestic and foreign policies will differ widely from the ones in France or Poland.

Organisations need to be aware of the political movements in countries they operate in to minimise the risk of becoming the target of government action.

Typical political factors of a PESTLE analysis, include:

• Government policies
• Political stability
• Foreign trade policies
• Tax policies
• Labour laws
• Trade restrictions

In addition to the political situation, economic aspects play an important role when assessing a company’s macro environment.

The factors to be considered are manifold:

Currency stability, wealth and income distribution, unemployment rates, economic growth rates, wage costs or inflation rates are only a small excerpt of what managers should consider when analysing macroeconomic factors.

These factors can have a direct impact on the growth and profitability of a company.

Before entering a market, decision-makers must ask themselves whether the market is economically attractive and suitable for the intended operation.

Typical economical factors of a PESTLE analysis, include:

• Economic growth
• Exchange rates
• Interest rates
• Inflation rates
• Disposable income
• Unemployment rates

Following on from the economic analysis of a market, the analysis of socio-cultural characteristics provides an insight into the existing values, norms, institutions, education levels and consumption patterns of a population.

Put simply, this information allows businesses to outline the structures and values of a society.

However, managers need to take extra care in this part of the PESTLE analysis:

That’s because they often fall victim to predefined stereotypes when analysing geographically-distant markets.

The socio-cultural factors should always be assessed by several stakeholders with different backgrounds to ensure an objective evaluation of a market.

Typical social factors of a PESTLE analysis, include:

• Population growth rate
• Age distribution
• Career attitudes
• Safety emphasis
• Health consciousness
• Lifestyle attitudes
• Cultural barriers

In today’s age, almost every company is dependent on modern technologies.

Whether it’s due to the use of digital sales channels or the precise manufacturing of products with modern production facilities.

The rise in technological complexities also increasingly influence strategic decisions in companies.

When assessing environmental factors with the PESTLE framework, decision-makers must consider the technological progress of their time.

Managers can do this by asking a set of questions, like:

• Does the technological progress and infrastructure of a region meet the requirements of the plans to build a new manufacturing plant?
• Do specific technological standards exist with the entry into a new market, which must be met to build an effective supply chain?
• Are there any emerging technologies posing a threat of substitution ?

Typical technological factors of a PESTLE analysis, include:

• Technology incentives
• Level of innovation
• R&D activity
• Technological change
• Technological awareness

The legal framework is a central component in the analysis of a company’s macro environment. Even though this area is ranked at the lower end of the PESTLE framework, it is the most important for many companies.

For example, organisations within the EU have to consider at least three legal systems :

• The legislation in the country of the headquarters or production,
• The respective legal system of the country or countries in which the products are sold.
• Additional laws from the European Union that facilitate (or limit) business activities.

These legal systems often deprive managers of the flexibility they seek.

Advertising bans for certain product categories or special requirements for product design must be considered and taken into account on a country by country basis.

The resulting challenges often affect the entire marketing mix and can be costly to solve.

Typical legal factors of a PESTLE analysis, include:

• Discrimination laws
• Antitrust laws
• Employment laws
• Consumer protection laws
• Copyright and patent laws
• Health and safety laws

Environmental factors not only assess the climatic and topographical conditions of a country. They also evaluate a country’s availability of resources.

This is important, as products in regions with extreme climatic conditions have to meet different requirements than in their country of origin.

A car in the desert of Dubai has to meet different criteria than in Germany. European carmakers had to adjust their production to ensure their cars would stop catching fire in the UAE, following multiple reports back in 2005.

Geographical distances also pose a challenge for the distribution of products.

Mountains, rivers or other geographical conditions can quickly become a hurdle for transporting raw materials or goods.

Managers must carefully consider whether the ecological-geographical conditions of a region match their organisation’s strategic ambitions.

Typical environmental factors of a PESTLE analysis, include:

• Environmental policies
• Climate change
• Pressure from NGO’s

How to do a PESTLE Analysis (Free PDF Template)

Conducting the PESTLE analysis can be overwhelming. But with my easy-to-use template, it becomes a lot more manageable!

Simply print out the below template and start researching your industry.

A couple of great places to start your research are:

• statista.com
• ec.europa.eu

Free PESTLE Template

Simply click on the image to get redirected to the high-res PDF.

Over the past decades, the PESTLE Analysis has proven to be an effective concept to assess an organisation’s macro environment.

Its simple setup allows managers to anticipate future business threats and to take action to avoid or minimise their impact by incorporating them into their organisation’s strategic decision-making.

As with any analysis, it reflects the moment and is based on the current knowledge of those carrying it out. That’s why it is recommended to conduct the PESTLE analysis regularly.

Need help analysing your macro-environment?

If you want to better understand the factors that affect your business, get in touch . I offer tailored advice to help you assess your macro environment.

Enjoyed this article? Here are more things you might like:

What is Business Strategy? – Increase your chances of success and understand what it takes to build an effective business strategy.

Porter’s Five Forces Analysis – A complete guide to Michael E. Porter’s 5 Forces Analysis to help you assess your competitive landscape.

The Product Life Cycle – A complete breakdown of the individual stages of the product life cycle to plan your next marketing moves.

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Technological factors affecting business, page actions.

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Technological factors affecting business (also called technological forces ) are all externally generated changes in technologies and processes which are used (or may be used) by the company or its competitors. Proper identification of this factor during strategic analysis ( PEST analysis , STEEP analysis , SWOT analysis , TOWS analysis ) could lead to better strategic decision about investments and development of the organization . Rapid technological development in modern economy requires quick and flexible reactions of managers to better adapt and to survive in turbulent competitive environment .

• 1 Technological factors connected to information revolution
• 2 Legislation of technological processes
• 3 Technological advances in production systems and logistics
• 4 Technological advances in business process management
• 5 References

Technological factors connected to information revolution

The information revolution refers to the rapid advancement of digital technologies and the widespread availability of information through the internet and other digital platforms. Some technological factors connected to the information revolution that can affect businesses include:

• The rapid development of advanced communication networks such as 5G, which enables faster data transfer and improves the connectivity of devices, has led to new opportunities for businesses to communicate and collaborate with customers, suppliers, and partners.
• The growing efficiency of computer systems , including the development of faster processors, larger database and memory capacity, and improved storage technology , has led to increased productivity and efficiency in various industries.
• The global reach of the internet has made it possible for businesses to easily access information about their competitors and the market , providing insights into new opportunities and trends.
• The emergence of web 2.0 and newer technologies, such as social media and collaboration tools, has made it easier for businesses to engage with customers and build relationships through dynamic communication and feedback.
• New IT security challenges : With the increasing amount of sensitive information being stored and transmitted electronically, businesses must constantly adapt to new IT security challenges. For example, encryption is used to protect data from unauthorized access, certificates are used to verify the identity of websites and users, SSL (Secure Socket Layer) and HTTPS (Hypertext Transfer Protocol Secure) are used to secure online transactions, and various other technologies are used to protect against malware, phishing, and other cyber threats.
• Internet infrastructure : The availability and speed of internet access is becoming increasingly important for businesses, as more and more transactions and communications are conducted online. The use of fiber optics and other advanced technologies is improving internet speed and reliability , and mobile capabilities are allowing businesses to reach customers and employees in more remote locations.
• Internet banking and shopping : The rise of e-commerce has made it possible for businesses to sell products and services online, and internet banking has made it easier for businesses to manage their finances. However, these developments have also brought new security risks, such as the risk of fraud and theft.
• Distribution of non-material goods over the internet : Many businesses are now distributing non-material goods such as music, movies, e-books, and software over the internet, rather than through traditional physical channels. This has led to new business models and has made it easier for businesses to reach global customers.
• Social media influence on marketing : Social media platforms have become an important tool for businesses to connect with customers and build brand awareness. Businesses use social media to share content and engage with customers, and social media influencers have become an important part of the marketing mix .
• SEO (Search Engine Optimization) activities : SEO refers to the process of optimizing a website to improve its visibility in search engine results. Businesses use SEO to increase their visibility on search engines and drive more traffic to their websites.
• Capabilities of CRM systems : CRM ( Customer Relationship Management ) systems are used by businesses to manage and analyze customer interactions and data. Modern CRM systems are able to track customer interactions across multiple channels, including social media, and provide businesses with insights into customer behavior and preferences.
• Information system security : The security of business information systems is a critical concern, as a security breach can lead to the loss of sensitive data and the disruption of business operations. Standards such as ISO 27001 provide guidelines for securing information systems and protecting against cyber threats.

Overall, the information revolution has had a significant impact on businesses, providing new opportunities and tools for growth and innovation , while also presenting challenges that need to be addressed.

Legislation of technological processes

Legislation of technological processes refers to laws and regulations that govern the development, use, and impact of technology . Some examples of legislation related to technology include:

• Privacy laws concerning customer privacy and data security : Privacy laws are designed to protect the personal information of individuals and businesses from being collected, stored, or used without their consent. These laws can include provisions related to data security, data breaches, and data retention, as well as regulations about how companies can use personal information for marketing and other purposes.
• Patents law and intellectual property legislation : Patents and intellectual property laws are designed to protect the rights of inventors, authors, and other creators of original works. These laws can include provisions related to patents, trademarks, copyrights, and trade secrets, and they can have a significant impact on businesses, particularly those in the technology industry .
• Cybercrime protection, data protection, and cyber security laws: Cybercrime is a rapidly growing problem, as hackers and other cybercriminals use technology to steal sensitive information, disrupt business operations, and commit other crimes. Cybercrime protection laws, data protection laws, and cyber security laws are designed to protect against these types of crimes, and they can include provisions related to cybercrime reporting, data retention, and incident response.
• Government spending on technological research : Governments invest in technological research to promote innovation and economic growth. This can include funding for basic and applied research, as well as for the development of new technologies, such as renewable energy and autonomous systems.
• Government actions in areas of education and training of highly competent engineers and technology users : Governments also invest in education and training programs to ensure that the workforce has the necessary skills to support technological innovation. This can include funding for science, technology, engineering, and math (STEM) education, as well as for training programs in specific areas, such as cybersecurity and data analytics.
• Regulations concerning licensing of technologies : Governments also regulate the licensing of technologies to ensure that they are used in a safe and responsible manner. This can include regulations related to the licensing of software, hardware, and other technologies, as well as regulations related to the use of technologies in specific industries, such as healthcare and transportation.
• Regulations concerning online money transfer , offshore accounts and protection against competitive technologies from abroad: Governments also regulate the use of online money transfer and offshore accounts to prevent money laundering , tax evasion , and other financial crimes. They also regulate the import and export of technology products to protect domestic businesses from unfair competition from abroad.

These laws and regulations can have a significant impact on businesses and technology companies, as they can shape the development and use of technology and affect their operations and bottom line. Companies must be aware of and comply with relevant laws and regulations to avoid penalties and legal liabilities.

Technological advances in production systems and logistics

• New machinery and services : New machinery and services can greatly improve the efficiency and productivity of a business, but it also requires significant investment and training for employees to use these new technologies.
• Equipment : Upgraded equipment can improve the quality and speed of production , but it also requires regular maintenance and may have higher costs associated with it.
• Research and development software : CAD/CAM, CIM, and simulation software are important tools for research and development, but they also require specialized skills and knowledge to use effectively.
• Environmentally friendly technologies : Environmentally friendly technologies can help reduce the environmental impact of a business, but it also requires changes in production processes and additional costs for implementation.
• Reduced need for manual labor : Automation and robotization can greatly increase productivity and efficiency, but it also raises concerns about job displacement and the need for retraining of employees.
• Better productivity, speed of work and accuracy: New technologies can improve productivity, speed, and accuracy, but it also requires businesses to adapt to new processes and tools.
• Shorter life cycles of technology increase cost of updating of machinery : The rapid pace of technological change can make it difficult for businesses to keep up with the latest advancements, and the cost of updating machinery can be significant.
• New generations of equipment could be incompatible with old : New generations of equipment can be incompatible with older versions, which can lead to higher costs of service and a lack of spare parts.
• Smart technologies : Smart technologies such as the Internet of Things can greatly improve the efficiency and productivity of a business, but it also requires businesses to adapt to new technologies and processes.
• Cooperation with scientific institutions allows faster implementation of innovative product and technological ideas : Collaboration with scientific institutions can accelerate the development and implementation of new products and technologies, but it also requires businesses to navigate the complex landscape of academic research and intellectual property laws.
• Lowering of health hazards for workers : New technologies can greatly improve the health and safety of workers, but it also requires businesses to invest in new equipment and processes, as well as training for employees.

Technological advances in business process management

• BPNM software : BPNM (Business Process and Network Management) software allows businesses to monitor and manage their processes and network, but it also requires businesses to have a clear understanding of their processes and networks in order to effectively use the software.
• Work-flow software : Work-flow software allows businesses to simulate and optimize complex business processes, but it also requires businesses to have a clear understanding of their processes in order to effectively use the software.
• MRP, ERP and other types of integrated IT systems : MRP (Material Resource Planning ) and ERP ( Enterprise Resource Planning) systems are integrated IT systems that allow businesses to manage their resources, but it also requires businesses to have a clear understanding of their processes in order to effectively use the software.
• Outsourcing of production to other countries : Outsourcing production to other countries can allow businesses to take advantage of technological capabilities, logistics networks, and lower labor costs, but it also requires businesses to navigate the complexities of international trade and cultural differences.
• Supply chain capabilities of producers and suppliers allowing easy integration of complex processes, faster delivery speeds: Advancements in supply chain management technologies have made it possible for businesses to easily integrate complex processes and achieve faster delivery speeds, but it also requires businesses to have a clear understanding of their supply chain and supplier capabilities.
• New transport routes and means : New transport routes and means can improve the quality and cost efficiency of transport, but it also requires businesses to adapt to new transport systems and logistics networks.
• Possibility to retain organizational knowledge in IT supported knowledge bases : IT-supported knowledge bases allow businesses to retain organizational knowledge, but it also requires businesses to have a clear understanding of their processes and knowledge management systems.
• Technological forces used in area of organizational development : Technological forces can be used to improve organizational development, but it also requires businesses to have a clear understanding of their processes and organizational development strategies.

Check also other:

• Social and cultural factors affecting business
• Economic factors affecting business
• Ecological factors affecting business
• Political factors affecting business
• Legal factors affecting business
• Ethical factors affecting business

• Croteau, A. M., & Bergeron, F. (2001). An information technology trilogy: business strategy, technological deployment and organizational performance . The journal of strategic information systems, 10(2), 77-99.
• Edelman, L. B., & Suchman, M. C. (1997). The legal environments of organizations . Annual review of sociology, 479-515.
• Pearce, J. A., Robinson, R. B., & Subramanian, R. (2000). Strategic management : Formulation, implementation, and control . Columbus, OH: Irwin/McGraw-Hill.
• Ritter, T., & Gemünden, H. G. (2004). The impact of a company's business strategy on its technological competence, network competence and innovation success . Journal of business research, 57(5), 548-556.
• Coccia, M. (2014). Driving forces of technological change: the relation between population growth and technological innovation: analysis of the optimal interaction across countries. Technological Forecasting and Social Change, 82, 52-65.

Author: Krzysztof Wozniak

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Tech at the edge: Trends reshaping the future of IT and business

It is easy to become numb to the onslaught of new technologies hitting the market, each with its own promise of changing (more often “revolutionizing”) the business world. But our analysis of some of the more meaningful tech trends lays out a convincing case that something significant is happening. 1 Michael Chui, Roger Roberts, and Lareina Yee, “ McKinsey Technology Trends Outlook 2022 ,” McKinsey, August 24, 2022.

These tech trends are generally accelerating the primary characteristics that have defined the digital era: granularity, speed, and scale. But it’s the magnitude of these changes—in computing power, bandwidth, and analytical sophistication—that is opening the door to new innovations, businesses, and business models.

The emergence of cloud and 5G , for example, exponentially increases compute power and network speeds that can enable greater innovation. Developments in the metaverse of augmented and virtual reality open the doors to virtual R&D via digital twins , for example, and immersive learning. Advances in AI, machine learning, and software 2.0 (machine-written code) bring a range of new services and products, from autonomous vehicles to connected homes, well within reach.

Much ink has been spilled on identifying tech trends, but less attention has been paid to the implications of those changes. To help understand how management will need to adapt in the face of these technology trends in the next three to five years, we spoke to business leaders and leading thinkers on the topic. We weren’t looking for prognostications; we wanted to explore realistic scenarios, their implications, and what senior executives might do to get ready.

The discussions pinpointed some broad, interrelated shifts, such as how technology’s radically increasing power is exerting a centrifugal force on the organization, pushing innovation to expert networks at the edges of the company; how the pace and proliferation of these innovations calls for radical new approaches to continuous learning built around skills deployed at points of need; how these democratizing forces mean that IT can no longer act as a centralized controller of technology deployment and operations but instead needs to become a master enabler and influencer; and how these new technologies are creating more data about, and touchpoints with, customers, which is reshaping the boundaries of trust and requiring a much broader understanding of a company’s security responsibilities.

1. Innovation at the edge

Key tech trends.

We estimate that 70 percent of companies will employ hybrid or multicloud management technologies, tools, and processes . 2 “ The top trends in tech ,” McKinsey, June 15, 2021. At the same time, 5G will deliver network speeds that are about ten times faster than current speeds on 4G LTE networks, 3 Irina Ivanova, “What consumers need to know about this week’s AT&T–Verizon 5G rollout,” CBS News, January 20, 2022. with expectations of speeds that are up to 100 times faster with 40 times faster latency. 4 “5G speed: 5G vs. 4G performance compared,” Tom’s Guide, June 1, 2021. By 2024, more than 50 percent of user touches will be augmented by AI-driven speech, written word, or computer-vision algorithms , 5 “ The top trends in tech ,” June 15, 2021. while global data creation is projected to grow to more than 180 zettabytes by 2025, up from 64.2 zettabytes in 2020. 6 “Amount of data created, consumed, and stored 2010–2025,” Statista Research Department, May 23, 2022. The low-code development platform market‘s compound annual growth rate (CAGR) is projected at about 30 percent through 2030. 7 “Global $187 billion low-code development platform market to 2030,” GlobeNewswire, November 10, 2020.

Shift: Innovation develops around personal networks of experts at the porous edge of the organization and is supported by capabilities that scale the benefits across the business.

These technologies promise access to virtually unlimited compute power and massive data sets, as well as a huge leap in bandwidth at low cost, making it cheaper and easier to test, launch, and scale innovations quickly. The resulting acceleration in innovation will mean that companies can expect more disruptions from more sources. Centralized strategic and innovation functions cannot hope to keep pace on their own. Companies will need to be much more involved in networks outside their organizations to spot, invest in, and even acquire promising opportunities.

Corporate venture-capital (VC) funds with centralized teams have looked to find and fund innovation, but their track record has been spotty, often because the teams lack the requisite skills and are simply too far removed from the constantly evolving needs of individual business units. Instead, companies will need to figure out how to tap their front lines, particularly business domain experts and technologists, to enable them to act, in effect, as the business’s VC arm. That’s because the people who are writing code and building solutions are often well plugged into strong external networks in their fields and have the expertise to evaluate new developments. One pharma company, for example, taps its own expert researchers in various fields, such as gene expression, who know well the people outside the company who are leaders in the field.

While companies will need to create incentives and opportunities for engineers to build up and engage with their networks, the key focus must be on empowering teams so they can spend their allocated budget as they see fit—for example, experimenting and failing without penalty (within boundaries) and deciding on technologies to meet their goals (within prescribed guidelines).

The IT organization of the future can play an important role in building up a scaling capability to make that innovation work for the business, something that has traditionally been a challenge. Individual developers or small teams working fast don’t tend to naturally think about how to scale an application. That issue is likely to be exacerbated as nontechnical users working in pockets across organizations use low-code/no-code (LC/NC) applications to design and build programs with point-and-click or pull-down-menu interfaces.

One pharma company has taken this idea to heart by giving local business units the flexibility to run with a nonstandard idea when it has proven to be better than what the company is already doing. In return for that flexibility, the business unit must commit to helping the rest of the organization use the new idea, and IT builds it into the company’s standards.

In considering how this scaling capability might work, companies could, for example, assign advanced developers to “productize” applications by refactoring code so they can scale. IT leadership can provide tools and platforms, reusable-code libraries that are easily accessible, and flexible, standards-based architecture so that innovations can be scaled across the business more easily.

Questions for leadership

• What incentives will best encourage engineers and domain experts to develop, maintain, and tap into their networks?
• What processes are in place for tracking and managing VC activity at the edge?
• What capabilities do you need to identify innovation opportunities and “industrialize” the best ones so they can be shared across the organization?

For more on how to empower workers at the edge, see “ Tech companies innovate at the edge. Legacy companies can too ,” in Harvard Business Review.

Would you like to learn more about McKinsey Digital ?

2. a perpetual-learning culture.

Advances in AI, machine learning, robotics, and other technologies have increased the pace of change tenfold . By 2025, we estimate that 50 billion devices will be connected to the Industrial Internet of Things (IIoT), while 70 percent of manufacturers are expected to be using digital twins regularly (by 2022). 8 “ The top trends in tech ,” June 15, 2021. Some 70 percent of new applications will use LC/NC technologies by 2025, up from less than 25 percent in 2020. 9 “Gartner says cloud will be the centerpiece of new digital experiences,” Gartner, November 10, 2021. The global metaverse revenue opportunity could approach $800 billion in 2024, up from about $500 billion in 2020. 10 Bloomberg Intelligence, “Metaverse may be $800 billion market, next tech platform,” Bloomberg, December 1, 2021. This proliferation of technological innovations means we can expect to experience more progress in the next decade than in the past 100 years combined, according to entrepreneur and futurist Peter Diamandis. 11 Peter Diamandis and Steven Kotler, The Future Is Faster than You Think: How Converging Technologies Are Transforming Business, Industries, and Our Lives , New York: Simon & Schuster, 2020.

Shift: Tech literacy becomes core to every role, requiring learning to be continuous and built at the level of individual skills that are deployed at the point of need.

With the pace and proliferation of technologies pushing innovation to the edge of the organization, businesses need to be ready to incorporate the most promising options from across the front lines. This will create huge opportunities, but only for those companies that develop true tech intelligence through a perpetual-learning culture. The cornerstone of this effort includes training all levels of personnel, from “citizen developers” working with easy-to-use LC/NC tools or in entirely new environments such as the metaverse, to full-stack developers and engineers, who will need to continually evolve their skills to keep up with changing technologies. We’re already seeing situations where poorly trained employees use LC/NC to churn out suboptimal products.

While there will always be a need for more formalized paths for foundational learning, we anticipate an acceleration in the shift from teaching curricula periodically to continuous learning that can deliver varying technical skills across the entire organization. In practice, that will mean orienting employee development around delivering skills. This requires breaking down a capability into its smallest sets of composite skills. One large tech company, for example, created 146,000 skills data points for the 1,200 technical skills it was assessing.

The key point is that these skills “snippets”—such as a block of code or a video of a specific negotiating tactic—need to be integrated into the workflow so that they’re delivered when needed. This might be called a “LearnOps” approach, where learning is built into the operations. This integration mentality is established at Netflix, where data scientists partner directly with product managers, engineering teams, and other business units to design, execute, and learn from experiments. 12 Netflix Technology Blog , “Experimentation is a major focus of data science across Netflix,” blog entry by Martin Tingley et al., January 11, 2022.

As important as being able to deploy learning is building a learning culture by making continuous learning expected and easy to do. The way top engineers learn can be instructive. This is a community that is highly aware of the need to keep their skills up to date. They have ingrained habits of sharing code, and they gravitate to projects where they can learn. One advantage of using open source, for example, is the built-in community that constantly updates and reviews code. In the same spirit, we’re seeing companies budget extra time to allow people to try new tools or technologies when they’re building a product. Other companies are budgeting for “learning buffers” to allow for setbacks in product development that teams can learn from. 13 “ The big boost: How incumbents successfully scale their new businesses ,” McKinsey, August 27, 2020.

Netflix, which makes broad, open, and deliberate information sharing a core value, built the Netflix experimentation platform as an internal product that acts as a repository of solutions for future teams to reuse. It has a product manager and innovation road map, with the goal of making experimentation a simple and integrated part of the product life cycle. 14 Netflix Technology Blog , “Netflix: A culture of learning,” blog entry by Martin Tingley et al., January 25, 2022.

To support this kind of continuous learning and experimentation, companies will need to accept mistakes. The art will be in limiting the impact of potentially costly mistakes, such as the loss or misuse of customer data. IT will need to architect protocols, incentives, and systems to encourage good behaviors and reduce bad ones. Many companies are beginning to adopt practices such as automated testing to keep mistakes from happening in the first place ; creating spaces where mistakes won’t affect other applications or systems, such as isolation zones in cloud environments ; and building in resiliency protocols.

• Do you have a list of the most important skills your business needs?
• What is the minimum level of learning needed for advanced users of analytics and manipulators of data?
• How do you track what people are learning and whether that learning is effective and translating into better performance?

3. IT as a service

It is estimated that the global cloud microservices platform market will generate $4.2 billion in revenue by 2028, up from $952 million in 2020. 15 Cloud microservice platform market report , Research Dive, November 2021. GitHub has more than 200 million code repositories and expects 100 million software developers by 2025. 16 Paul Krill, “GitHub expects more than 100 million software developers by 2025,” InfoWorld, December 3, 2020. Nearly 90 percent of developers already use APIs. 17 Christina Voskoglou, “APIs have taken over software development,” Nordic APIs, October 27, 2020. Software 2.0 creates new ways of writing software and reduces complexity. Software sourced by companies from cloud-service platforms, open repositories, and software as a service (SaaS) is growing at a CAGR of 27.5 percent from 2021 to 2028. 18 Software as a service (SaaS) market, 2021–2028 , Fortune Business Insights, January 2022.

Shift: IT becomes the enabler of product innovation by serving small, interoperable blocks of code.

When innovation is pushed to the edge and a perpetual-learning culture permeates an organization, the role of IT shifts dramatically. IT can’t support this dynamic environment by sticking to its traditional role as a controlling entity managing technology at the center. The premium will now be on IT’s ability to enable innovation, requiring a shift in its traditional role as protector of big tech assets to a purveyor of small blocks of code. The gold standard of IT effectiveness will be its ability to help people stitch together snippets of code into a useful product.

We are already seeing what that might look like. Employees at G&J Pepsi-Cola Bottlers with little to no experience at software development created an app that examines images of a store shelf to identify the number and type of bottles on it, then automatically restocks it based on historic trends. 19 Adam Burden, “Low code/no code could reshape business innovation,” VentureBeat, February 5, 2022. One pharmaceutical company grew its low-code platform base from eight users to 1,400 in just one year . Business users outside of IT are now building applications with thousands of monthly sessions. 20 Shivam Srivastava, Kartik Trehan, Dilip Wagle, and Jane Wang, “ Developer Velocity: How software excellence fuels business performance ,” McKinsey, April 20, 2020. Companies that empower “citizen developers” score 33 percent higher on innovation compared with bottom-quartile companies that don’t provide that level of support, according to a McKinsey survey. 21 Shivam Srivastava, Kartik Trehan, Dilip Wagle, and Jane Wang, “ Developer Velocity: How software excellence fuels business performance ,” McKinsey, April 20, 2020.

These developments point toward much more of a “buffet” approach to technology, where IT builds useful blocks of reusable code, sometimes assembles them into specific products, and makes them available through a user-friendly cataloging system for the business to use to create the products it needs. IT provides guiderails, such as API standards and directives on the environments in which the code might be most useful; protects the most sensitive information, such as customer data and financial records; and tracks their adoption. This tracking capability will become particularly crucial as bots, AI, algorithms, and APIs proliferate. Transparency isn’t sufficient. IT will need to make sense of all the activity through advanced tech performance and management capabilities and the development of new roles, such as data diagnosticians and bot managers.

This IT-as-a-service approach puts the product at the center of the operating model, requiring a commitment to organizing IT around product management . Some companies have been moving in this direction. But reaching the scale needed to support fast-paced and more diffuse innovation will require a deeper commitment to product owners, working with leaders in the business side of the house, to run teams with real P&L responsibility. Many organizations, from traditional enterprises to digital natives, have found that putting in place product leaders who set overall product and portfolio strategy, drive execution, and empower product owners to drive innovation aligned with business outcomes and P&L metrics can increase the return on the funding that flows to technology delivery and quicken the pace of innovation.

• Do you have a vision for how the role of the IT organization will change to enable democratization of technology?
• How will you elevate the role of the technology product manager, and do you have a road map for developing that role?
• What systems will you need to put in place to manage and track the use, reuse, and performance of code?

McKinsey Technology Trends Outlook 2022

4. expanded trust boundaries.

It was estimated that almost 100 percent of biometrics-capable devices (such as smartphones) will be using biometrics for transactions by 2022. 22 “Usage of biometric technology in transactions with mobile devices worldwide 2016–2022”, Statista Research Department, June 13, 2022. The effectiveness of these technologies has advanced dramatically, with the best facial-identification algorithms having improved 50 times since 2014. 23 William Crumpler, “How accurate are facial recognition systems—and why does it matter?” Center for Strategies and International Studies (CSIS), April 14, 2020. These developments are contributing to profound unease in the relationship between technology and consumers of technology. The Pearson Institute and the Associated Press-NORC Center for Public Affairs Research shows that “about two-thirds of Americans are very or extremely concerned about hacking that involves their personal information, financial institutions, government agencies, or certain utilities.” 24 Chuck Brooks, “More alarming cybersecurity stats for 2021!” Forbes , October 24, 2021.

Shift: Trust expands to cover a broader array of stakeholder concerns and become an enterprise-wide responsibility.

These enormous shifts in technology power and capacity will create many more touchpoints with customers and an exponential wave of new data about customers. Even as IT’s role within the organization becomes more that of an enabler, the expanding digital landscape means that IT must broaden its trust capabilities around security, privacy, and cyber . To date, consumers have largely embraced the convenience that technology provides, from ordering a product online to adjusting the temperature in their homes remotely to monitoring their health through personal devices. In exchange for these conveniences, consumers have traditionally been willing to provide some personal information. But a steady undercurrent of privacy and trust concerns around these ever-more-sophisticated conveniences is raising the stakes on the broad topic of trust. Consumers are becoming more aware of their identity rights, making decisions based on values, and demanding the ethical use of data and responsible AI .

The most obvious concern is around cybersecurity , an ongoing issue that is already on the board-level agenda. But tech-driven trust issues are much broader and are driven by three characteristics. One is the sheer quantity of personal data, such as biometrics, that companies and governments collect, creating concerns about privacy and data misuse. The second is that personal security issues are becoming more pervasive in the physical world. Wired homes, connected cars, and the Internet of Medical Things, for example, are all vectors for attack that can affect people’s well-being. Third is the issue that advanced analytics seem too complex to be understood and controlled, leading to deep unease about people’s relationship with technology. This issue is driving the development of “ explainable AI ” and the movement to debias AI.

Adding to the complexity is the frequent need to manage and secure trust across an entire ecosystem of technologies. Take the wired home, for example. The proliferation of devices—think virtual assistants, security, communications, power management, and entertainment systems—means that a large group of providers will need to agree on standards for managing, in effect, an interconnected security net in the home.

These developments require a complex extension of the boundaries of trust. The significant advantages that many incumbents enjoy—existing relationships with customers and proprietary data—are at risk unless businesses rethink how they manage and nurture that trust. Companies need to consider putting identity and trust management at the core of their customer experience and business processes. That can happen effectively only when companies assign a dedicated leader with real power and board-level prioritization with enterprise-wide responsibility across the entire trust and security landscape. Given the tech underpinnings of this trust environment, IT will need to play a key role in monitoring and remediating, such as assessing the impact of new legislation on AI algorithms, tracking incidents, identifying the number and nature of high-risk data-processing activities and automated decisions, and—perhaps most important—monitoring consumer trust levels and the issues that affect them.

• Who is responsible for the enterprise-wide trust and risk landscape?
• How have you integrated your efforts around customer trust with overall cybersecurity processes?
• What privacy, trust, and security processes are in place to manage the entire life cycle of your data?

It is inevitable that the pace of technological change will continue to accelerate. The successful technology leader of the future will not simply need to adopt new technologies but to build capabilities to absorb continuous change and make it a source of competitive advantage.

Steve Van Kuiken is a senior partner in McKinsey’s New Jersey office.

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What Is PEST Analysis?

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What Is PEST Analysis? Its Applications and Uses in Business

Investopedia / Ellen Lindner

PEST analysis (political, economic, social, and technological) is a management method whereby an organization can assess major external factors that influence its operation in order to become more competitive in the market. As described by the acronym, those four areas are central to this model.

A popular variation on the PEST analysis format, especially in the U.K., is the PESTLE strategic planning approach, which includes the additional aspects of legal and environmental.

Key Takeaways

• PEST analysis stands for political, economic, social, and technological.
• This type of analysis is used to gauge external factors that could impact the profitability of a company.
• Generally, it is more effective with larger organizations that are more likely to experience the effects of macro events.
• PEST analysis is commonly used in conjunction with SWOT analysis, which stands for strengths, weaknesses, opportunities, and threats.

Understanding PEST Analysis

It is believed that PEST analysis was first introduced under the name ETPS by Harvard professor Francis J. Aguilar. In the 1967 publication "Scanning the Business Environment," Aguilar presented the economic, technical, political, and social factors as being major influences on the business environment. Subsequently, the letters were rearranged to create a convenient and quirky acronym used today.

The core of PEST analysis is the belief that a comprehensive assessment of the major areas of influence that affect the sector in which an organization is positioned, as well as the organization itself, can facilitate more effective strategic planning.

This planning can be undertaken to maximize the organization’s ability to capitalize on conditions as they exist and to be forewarned of and better prepared for imminent changes, allowing the organization to stay ahead of competitors.

Components of PEST Analysis

Political: The political aspect of PEST analysis focuses on the areas in which government policy and/or changes in legislation affect the economy, the specific industry, and the organization in question. Areas of policy that may particularly affect an organization include tax and employment laws. The general political climate of a nation or region, as well as international relations , can also greatly influence the organization.

Economic: The economic portion of the analysis targets the key factors of interest and exchange rates , economic growth, supply and demand , inflation , and recession.

Social: The social factors that may be included in a PEST analysis are demographics and age distribution, cultural attitudes, and workplace and lifestyle trends.

Technological: The technological component considers the specific role and development of technologies within the sector and organization, as well as the wider uses, trends, and changes in technology. Government spending on technological research may also be a point of interest in this area.

Applications of PEST Analysis

PEST analysis can assist an organization in recognizing and thereby capitalizing on opportunities offered by existing conditions in the business environment. It can also be used for identifying current or possible future challenges, allowing for effective planning of how to best manage these challenges.

PEST analysis can also be applied in assessing the in-house structure of an organization in order to identify strengths and weaknesses in its internal politics, economic outlook , social climate, and technology base. The results of this analysis can facilitate changes or improvements in areas identified as subpar.

PEST analysis can be used in conjunction with other forms of strategic business analysis, such as the SWOT (strengths, weaknesses, opportunities, and threats) model, for an even more comprehensive result. Conducting a comparison between these completed analyses can provide a very solid basis for informed decision-making.

What Is PEST vs. PESTLE Analysis?

PEST analysis stands for "political, economic, social, and technological" whereas PESTLE stands for the same but adds "legal" and "environmental" factors to the analysis. These areas are considered when assessing the impact of external factors on a company's profitability.

How Do You Do a PEST Analysis?

To do a PEST analysis, you must consider the different factors under each category (political, economic, social, and technological), and how these factors affect your business. For the political component, you would assess laws, regulations, government policies, and tariffs, for example. For the economic component, some of the topics you would assess would include access to financing, cost of living, interest rates, inflation, and labor costs. For the social component, you would consider consumer trends and behaviors, education, division of wealth, population growth rates, and health. For the technological component, you would assess areas such as artificial intelligence growth, innovation, research and development, social networking, and cybersecurity.

How Often Should a PEST Analysis Be Done?

A PEST analysis can be done as often as a business would like. It is good to perform a PEST analysis when there have been significant changes that may impact a business, such as a change in interest rates, new government policies, or the introduction of new technology. It should be done often so as not to become outdated.

By analyzing the political, economic, societal, and technological factors that impact its business, a company can plan, reorganize, and adjust to these external factors in order to become a more successful operation. A business's success is not only predicated on how well it internally manages its operations but also on how it functions in the larger world. PEST analysis helps it to succeed in that aspect.

Chartered Institute of Personnel and Development. “ PESTLE Analysis .”

Rastogi, Nitank and Trivedi, M.K. “ PESTLE Technique—A Tool to Identify External Risks in Construction Projects .” International Research Journal of Engineering and Technology , vol. 3, no 1, 2016, pp. 385-386.

PESTLE Analysis. “ What Is PESTLE Analysis? An Important Business Analysis Tool .”

PESTLE Analysis. “ What Is a SWOT Analysis? 2 Examples of What It’s Used For .”

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Better Knowledge. Your Insight Is Sharper

Technological Environment: How It Makes (Breaks) Businesses 

Updated: August 18, 2024 · Reviewed by: Ahmad Nasrudin

This post may contain affiliate links, meaning we may earn a small commission if you purchase through our links. This helps support our work.

The technological environment encompasses the ever-evolving landscape of innovations, tools, and processes that shape how businesses operate. It’s one of several external factors , alongside political, economic, and social considerations, that investors need to understand. 

Technological advancements can rapidly disrupt entire industries, rendering established practices obsolete. This constant flux presents both significant opportunities and potential threats for businesses. By staying informed about the technological environment, investors can make informed decisions about where to allocate their capital. So, what exactly is the technological environment? Let’s delve deeper…

Why the technological environment matters

The technological environment is a critical factor for investors because it directly impacts the success of businesses within the broader business environment . Rapid advancements in technology can disrupt entire industries, creating both significant opportunities and potential threats. Companies that can adapt and leverage these advancements are more likely to thrive, while those that fall behind risk becoming obsolete.

Here’s a closer look at why understanding the technological environment is crucial for investors:

• Identifying early-stage growth: Emerging technologies often create entirely new industries or revolutionize existing ones. Investors who stay informed about the technological landscape can identify these high-growth potential sectors before they become mainstream, potentially leading to significant returns.
• Assessing competitive advantage: The technological capabilities of a company directly influence its competitive edge . Businesses that can leverage cutting-edge technologies to streamline operations, develop innovative products, or improve customer experiences are more likely to gain a significant advantage over their competitors. Investors can use their knowledge of the technological environment to evaluate a company’s technological readiness and its potential for future success.
• Mitigating risk: Disruptive technologies can pose a serious threat to established businesses. By understanding the technological landscape, investors can anticipate potential disruptions and adjust their investment strategies accordingly. This proactive approach helps mitigate risk and protect capital.

Impact of technological change on businesses

The technological environment is a double-edged sword for businesses. While it unlocks significant opportunities, it also presents challenges that require adaptation. Here’s a breakdown of the key impacts:

Increased efficiency and productivity: Technological advancements like automation and improved machinery enable businesses to produce more output with fewer resources. This translates to higher productivity , allowing companies to meet growing demands or reduce production costs.

Innovation and new products: Technology fuels innovation , leading to the creation of entirely new product categories or significant improvements to existing ones. Take e-books, for example, a product born from the convergence of internet technology and traditional publishing.

Disruption and obsolete products: The flip side of innovation is disruption. New technologies can render established products obsolete. Smartphones with high-resolution cameras are a prime example, significantly impacting the market for dedicated cameras.

Transformation across business functions

Technology touches every aspect of a business:

• Product selling techniques: The rise of e-commerce has fundamentally changed how businesses reach customers. Companies must adapt their sales strategies to leverage online marketplaces and cater to digital buying habits.
• Product manufacturing methods: Automation through robotics and computer-aided machines is transforming production lines. This shift requires companies to invest in new technologies and potentially upskill their workforce.
• Market research: Big data generated through online interactions offers valuable insights into consumer behavior. Businesses can leverage advanced analytics tools to understand market trends and inform their marketing strategies.
• Company management and operations: The internet and digital tools have facilitated the adoption of remote work models, offering greater flexibility and potentially reducing overhead costs.
• Communication channels: Businesses now have a wider range of tools to connect with stakeholders. Websites, social media platforms, and email have become essential elements of effective communication strategies.
• Evolving skillsets: Data analysts and programmers are increasingly in demand as businesses grapple with managing and interpreting vast amounts of data to make data-driven decisions.
• Shifting consumer needs and behavior: Technology influences consumer behavior. Easy access to online product comparisons fosters price consciousness, while constant connectivity creates new needs, like data packages for mobile devices.
• Emerging competition: Technological advancements can empower new competitors with innovative business models. The rise of e-commerce exemplifies this trend, challenging traditional brick-and-mortar retailers.

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How technology is transforming businesses

The technological environment is a relentless force reshaping every facet of how businesses operate. Here’s a deeper dive into how technology is driving innovation and disruption across various functions:

Sales and marketing

E-commerce has become a game-changer, allowing businesses to reach a global audience and establish virtual storefronts. But the digital revolution extends far beyond online stores. 

Social media advertising and search engine optimization (SEO) empower businesses to target specific demographics and interests, maximizing marketing ROI compared to traditional methods like mass media advertising. Additionally, marketing automation tools streamline workflows, personalize customer experiences, and nurture leads efficiently.

Manufacturing and operations

Automation through robotics and computer-aided manufacturing (CAM) is no longer science fiction. These technologies are streamlining production lines, boosting efficiency by automating repetitive tasks, and increasing precision through machine control. This translates to higher output, reduced waste, and potentially lower production costs. 

However, this shift can require significant upfront investments in new technologies and potentially necessitate workforce retraining programs to equip employees with the skills needed to manage and maintain these advanced systems.

Human resources

The internet and cloud-based technologies have ushered in the era of remote work arrangements . This fosters a more flexible work environment that attracts top talent regardless of location and potentially reduces overhead costs associated with maintaining large office spaces. However, managing a remote workforce requires effective communication strategies and collaboration tools to ensure productivity and maintain a strong company culture.

Communication

Businesses are no longer limited to phone calls and physical mail. Websites, social media platforms like Facebook and Twitter, and email marketing have become essential tools for a comprehensive communication strategy. These channels enable real-time communication with customers, partners, and investors, allowing for faster response times and targeted messaging campaigns. Additionally, social media platforms foster two-way communication, enabling businesses to gather valuable customer feedback and build stronger brand loyalty .

Data and expertise

The explosion of big data generated through online interactions, social media activity, and sensor technology offers a goldmine of insights into consumer behavior. Businesses are increasingly relying on data analysts and programmers to harness the power of big data through advanced analytics tools. This allows for data-driven decision-making across all areas of the business, from optimizing marketing campaigns to streamlining product development and identifying new market opportunities.

Consumer needs and behavior

Technology has fundamentally reshaped consumer expectations. The ease of online product comparisons through platforms like Google Shopping fosters price consciousness, pushing businesses to offer competitive pricing and value propositions. 

Additionally, the constant connectivity fueled by mobile devices creates new consumer needs, such as data packages for internet access and on-demand services like ride-sharing and food delivery. Businesses that can adapt their offerings and cater to these evolving needs are more likely to thrive in this dynamic landscape.

New competitors

Technological advancements can empower entirely new players to enter the market with innovative business models. E-commerce is a prime example, disrupting traditional brick-and-mortar retail by offering greater convenience and selection to consumers. 

Similarly, the rise of the sharing economy, fueled by mobile technology and online platforms, has challenged established industries like hospitality and transportation. Investors who stay informed about the technological environment can identify potential disruptors and assess their impact on established companies, making informed investment decisions based on a company’s ability to adapt and innovate in the face of change.

Examples of technological transformation

Technology diffusion , a constant driver of innovation, is a breeding ground for progress, constantly pushing the boundaries of what’s possible across various industries. Here are some compelling examples that showcase the transformative power of technology:

R&D: Revolutionizing products and processes

Investment in research and development (R&D) fuels breakthroughs that reshape entire industries. 3D printing technology, for instance, has disrupted traditional manufacturing by enabling rapid prototyping and on-demand production of complex objects. This innovation empowers businesses to bring new products to market faster and iterate on designs efficiently. 

Similarly, advancements in electric vehicle technology are transforming the transportation sector, offering consumers a more sustainable and potentially cost-effective alternative to traditional gasoline-powered cars. The emergence of self-driving cars promises to revolutionize transportation further, with implications for logistics, personal mobility, and even urban planning.

The vast amount of data generated in today’s digital world, known as big data , presents both a challenge and an opportunity. Businesses are leveraging advanced analytics tools to extract valuable insights from this data. These insights can inform strategic decision-making across all areas of the business, from optimizing marketing campaigns to streamlining product development and identifying new market opportunities. 

For example, by analyzing customer purchase history and online behavior, companies can gain a deeper understanding of their target audience and personalize their offerings to meet specific customer needs.

E-commerce has fundamentally changed the way consumers shop. The ability to browse and purchase products online, anytime and anywhere, from the comfort of their smartphones, offers unparalleled convenience. 

This shift towards online shopping has intensified price competition as consumers can easily compare prices across different retailers. This puts pressure on businesses to offer competitive pricing and value propositions to attract and retain customers in the online marketplace.

Robotics is no longer the stuff of science fiction. Industrial robots and computer-aided manufacturing (CAM) systems are transforming production lines by automating repetitive tasks and increasing precision. This translates to mass production capabilities, allowing companies to meet higher output demands while potentially reducing production costs. 

However, the integration of robotics into the workforce also necessitates investments in employee training to ensure a smooth transition and equip workers with the skills needed to manage and maintain these advanced systems.

3D printing

3D printing technology offers a glimpse into the future of manufacturing. This innovative process allows for the creation of three-dimensional objects from digital files. Businesses leverage 3D printing for rapid prototyping, enabling them to test and iterate on product designs quickly and efficiently before committing to large-scale production runs. Beyond prototyping, 3D printing also holds promise for on-demand manufacturing, potentially revolutionizing supply chains and inventory management practices.

Social media

Social media platforms have become ubiquitous communication channels, fundamentally changing the way businesses connect with their audiences. These platforms offer a cost-effective way to reach a large and targeted audience, allowing businesses to build brand awareness, promote products or services, and engage directly with customers. 

Additionally, social media fosters two-way communication , enabling companies to gather valuable customer feedback and insights that can inform product development and marketing strategies. However, the fast-paced nature of social media also presents challenges. Businesses need to be prepared to manage their online reputation and address customer concerns promptly and effectively in this public forum.

Artificial Intelligence (AI)

Artificial intelligence (AI) is rapidly transforming numerous industries. AI encompasses a range of technologies, including machine learning , natural language processing , and computer vision, that enable machines to simulate human intelligence and perform tasks that were once thought to be the exclusive domain of humans.

Here are some examples of how AI is being implemented across different sectors:

• Healthcare: AI-powered systems are being used to analyze medical images for early disease detection, personalized treatment plans, and assist with drug discovery.
• Finance: AI algorithms are employed in the financial markets for fraud detection, risk assessment, and algorithmic trading.
• Manufacturing: AI is used to optimize production processes, predict equipment failures, and improve quality control.
• Retail: AI personalizes customer recommendations, automates customer service interactions through chatbots, and streamlines logistics and inventory management .
• Transportation: Self-driving cars, powered by AI and machine learning , represent a future where transportation is more efficient and potentially safer.

The integration of AI across various industries is still in its early stages, but its potential to revolutionize how we live and work is vast. Investors who can identify companies at the forefront of AI development and strategically leverage this technology factor are well-positioned to capitalize on the significant opportunities it presents.

• Economic Environment: Impact on Businesses, Investments & Growth (Key Factors)
• Political Environment: Key Considerations for Business and Investment Decisions
• Sociocultural Environment: Key Factors Impacting Businesses
• Master the Macro-environment: 6 PESTEL Factors for Business Success
• Artificial Intelligence: Revolutionizing Industries (Types, Examples, Pros, Cons)

About Ahmad Nasrudin

I am an introspective writer with a strong passion for storytelling and a keen analytical mind. Drawing on my experience in equity research and credit risk, I bring a unique perspective to my writing. I aim to provide you with the information you need to start a business or make informed investment decisions. Learn more about me

• Business Size: How Business Scale Shapes Success (Importances, Measurement, Classification)
• Roles of Business: Satisfying Needs and Wants and Creating Value, Jobs, Income
• Values, Attitudes and Lifestyles (VALS): Categories and Why They Matter
• Multidivisional Structure: Importance, How it Works, Pros, Cons

More From Forbes

How technology will change the way business is run in 2021.

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Today’s technology is evolving at a breakneck pace.

New digital trends pave the way for a rise in society’s expectations, and things that seemed impossible just a decade ago are now taken for granted. Having witnessed virtual reality, enhanced 5G connectivity, and even drones integrate seamlessly into society, it begs the question of when—not if—the next breakthrough is coming.

One man leading the charge in modern technological development is none other than Elon Musk. Taking a keen interest in “wondrous, new technology,” Musk has been furthering research and development in new technological spaces since the start of his career. 

BERLIN, GERMANY DECEMBER 01: SpaceX owner and Tesla CEO Elon Musk arrives on the red carpet for the ... [+] Axel Springer Award 2020 on December 01, 2020 in Berlin, Germany. (Photo by Britta Pedersen-Pool/Getty Images)

Originally from South Africa, he’s the founder and CEO of aerospace manufacturer SpaceX , and the CEO of electric vehicle and clean energy company Tesla . The former company aims to reduce space transportation costs to enable the colonization of Mars. Back on Earth, he aims to accelerate the world’s progression towards sustainable energy and drive the world’s transition to electric vehicles.

A relentless innovator, Musk is well known for his brazen, unorthodox ideas about the future. Musk is quoted as saying, “Some people don’t like change, but you need to embrace change if the alternative is disaster.” His position has never been more relevant as the global landscape changes day by day during the global pandemic. Yet despite the calamity, the outbreak of Covid-19 has breathed new life into old markets. According to McKinsey , consumer and business digital adoption were fast-forwarded by an astounding five years in just the first eight weeks of lockdown. The competition is rampant, and industry innovators show no signs of stopping.

Google Chrome 3-Week Update Deadline—New Warning To Change Your Browser

Today’s new moon sets up a ‘supermoon eclipse’ and a ‘ring of fire’, today’s nyt mini crossword clues and answers for tuesday, september 3.

Owing to Musk’s impact, and combined with the worldwide influence of Covid-19, a multitude of contrasting technological trends have now entered the scene for business owners to explore. Artificial intelligence (AI) is one of the biggest: the industry is estimated to be worth $190 billion by 2025 , paving the way for job creation in sectors such as data, cybersecurity, and even healthcare. With the sheer volume of data collated on infection rates and the performance of the vaccine, algorithms need to be sophisticated enough to offer solutions that may well change the world as we know it.

And as for what these trends mean for you, the answer is simple. As technology changes , so do the skills you need to know to enamor your audience, run a future-proofed business, and find long-term success. Undoubtedly, technology will transform the way businesses are run in 2021 and beyond. To stay current, competitive, and in the know about what’s coming next, take it from these three successful entrepreneurs gaining momentum in the online space.

Automation is Reshaping Business

Jaikishaan Sharma

Jaikishaan Sharma, CEO of Sharmaatricks , connects hardworking individuals with social media-based business opportunities. His company shares accessible tools and educational resources to help his growing community of over 70,000 members build budding online businesses and achieve freedom from the rat race. 

He believes that automation is reshaping business. Sharma shares, “Digital shifts are opening new opportunities for businesses. I believe that both 5G and artificial intelligence are going to change the way business owners will run their business. With each passing day, automation is reshaping business and contributing to increased productivity – it’s very hard to ignore the impact of technology regardless of whether you’re operating a multinational or a start-up.”

“For the last few years, one thing that has frequently risen above all else in technology is automation. Automation tools are being innovated and developed every single day to make business processes agile. For this reason, I believe that the innovation surrounding automation will cause a rapid expansion of both remote working and video conferencing. We have already seen such rapid growth during the pandemic; Zoom has become a household name and other tools like Google Hangouts, Microsoft’s Teams, and Cisco’s Webex have all been making a buzz in the corporate world. Technology gives business owners and their staff the option to work from home, and moving forward, working from home will continue to be the new normal.”

These advancements in technology lead Sharma to his final point: because of the pandemic, schools and education institutes have been forced to fast-track e-learning and shift online education into the new normal. “Many institutions are changing portions of their curriculum to accommodate online learning well into the future,” he says. 

“In 2021, we expect to see huge demand and rapid growth of artificial intelligence. AI is already known for speech recognition, smartphone personal assistants, ride-sharing apps, and so much more. But there is plenty of room for growth and expansion, and small businesses will begin to adopt this new technology in 2021 to help them operate daily. Covid-19 has pushed the adoption of digital technologies by several years, and that could be here for the long haul.”

Technology is Cracking Frequency Codes

Taryn Lee , a global brand partner to Healy World, is a successful digital entrepreneur passionate about helping people navigate the new world of vibrational, health, wealth, and wellness. Lee shares, “The secrets of the universe are upon us. In 2021, we have reached a pivotal time in history as science and spirituality merge, giving way to technologies that can now interact with our energetic field.”

She continues, “In the coming years, there will be a rush by both medical and technology companies to further crack the frequency codes on how energy networks work within our bodies and brains, and they will use that knowledge to design interventions into our electromagnetic fields to prevent disease and boost physical and mental health. It will create entirely new medical approaches, new products, and new business models.”

Help is Still Important as Technology Changes

Tyler Ornstein

Tyler Ornstein, CEO of Tylers Coffees , created the world’s first and only acid-free coffee to help the millions of people that suffer from stomach-related issues and acid reflux. At the age of 14, Ornstein began his company and has since seen rapid growth. As technology changes the way business is run in 2021, he believes that the fundamentals still hold true: help is as important as ever.

Ornstein shares, “If you ever want to be successful, there’s only one word that you need to follow: ‘Help’. Always seek to help at every turn. If you follow this word to a T, you will see an immense amount of success. Not only for your business but also for yourself. If you can build a product or a service that helps the greater good, then you can monetize it and therefore become successful.”

Forward Into The Future

It’s clear that the many advancements in technology show no signs of stopping, and will have remarkable influence as society takes shape for many years to come. The next decade will be truly formative, and for the modern business owner, change-maker, or entrepreneur, adapting and responding to emerging trends has fast become one of the highest values to hold in a constantly evolving digital climate.

As the pandemic draws to a close and we rediscover the new normal, whatever that may be, make sure to monitor the many major technological innovations set to make waves. In doing so, you’ll leverage each advancement in its early stages, helping you adapt, stay on top of your industry, and find success both now and in the future.

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Is an MBA in Information Technology Worth It?

As we become increasingly reliant on digital products and services, the demand for professionals who can navigate the complexities of both business and technological domains is at an all-time high. Organizations are looking for leaders who can harness the power of technology to drive innovation, growth and success.

But what does it take to become one of these leaders?

For those seeking a career in IT (information technology), a master's in business administration (MBA) specializing in IT offers a blend of technical expertise and business acumen. 

This advanced degree provides a comprehensive understanding of business and technology principles, enabling you to excel in a wide range of roles, from software development to IT project management to help desk management to cybersecurity.

Reasons to Choose an MBA in Information Technology

While a master's in information technology (M.S. in IT) primarily focuses on technical skills, an MBA program in IT offers a broader perspective. It combines advanced technical knowledge with essential business and management principles, enabling you to excel in leadership roles and drive strategic decision-making.

This intersection between technology and business is where the magic happens.

A specialized MBA degree provides you with the knowledge and skills to seamlessly integrate business strategies with cutting-edge technologies. 

Dr. Alyncia Bowen, dean of Franklin University’s Ross College of Business and executive director of the university’s Leadership Center, says these are invaluable assets to have in today's data-driven economy.

"Organizations are looking for agile leaders,” she said. “The MBA with a specialization in IT produces individuals that can adjust and adapt to emerging business and technical trends."

What matters most when choosing a master’s program? Compare features, benefits and cost to find the right school for you.

You may also be the right fit for an MBA specializing in information technology if you're looking to:

• Develop a strong understanding of business and technology principles. This program provides a comprehensive understanding of business and technology concepts, such as data management and business analytics, allowing you to bridge the gap between these domains. This holistic approach fosters a deep appreciation for how technology can drive business growth and innovation.
• Enhance your management and leadership skills. An MBA in information technology emphasizes the development of leadership and managerial skills, equipping you to effectively lead teams, manage projects and drive organizational change.
• Gain a competitive edge in the job market. With the increasing integration of technology across all industries, those with a firm grasp of business and technical concepts are in high demand. Specialized MBA programs show you're well-versed in business processes, computer systems and information systems management.
• Stay current with the latest technology trends and innovations . This program ensures you stay up-to-date with the latest technological advancements and industry trends, enabling you to anticipate and adapt to emerging challenges and opportunities. This is important whether you decide to run your own business or are helping someone to grow theirs.
• Build a strong network of professionals in the field. An MBA in IT program often fosters a collaborative learning environment. This permits you to interact with peers, industry professionals and faculty members. This network can provide valuable insights, mentorship and potential career opportunities.  

What Should I Look For in an MBA in Information Technology Program?  

When evaluating an MBA in information technology program , it's important to pay special attention to the following core offerings, as they form the backbone of a comprehensive and well-rounded education.

Project Management

Effective project managerial skills are non-negotiable in the IT industry, where successful delivery of projects within time and budget constraints is paramount. A strong MBA in information technology program should equip you with the skills to plan, execute and deliver projects efficiently.

According to Lightcast™, project management skills are highly desirable, appearing in 53% of IT-related job searches across various industries.

Business Strategy

An MBA in IT program should provide you with the knowledge and tools to formulate and implement effective business strategies. This includes strategies that align with company goals and that leverage technology as a competitive advantage.

Lightcast™ data highlights the desirability of business strategy, with 30% of IT job postings having it listed as a requirement. This underscores the importance of this skill across the job market. 

Business Management

You should gain a deep understanding of managing IT projects and teams effectively while exploring broader business management principles.

Data from Lightcast™ shows that business management skills are highly sought after in job searches, appearing 34% of the time across postings related to information technology, making this a critical component of an MBA in IT curriculum.  

Job Opportunities for Graduates with an MBA in IT

Lightcast™ projects that jobs involving information technology will increase by 18.5% through 2032, while business administration and management jobs are expected to increase by 15.8% over the same period. This reflects the growing demand for skilled professionals in this field, especially when compared to the expected U.S. average of 2.8% job growth across all industries over the same time period ( Bureau of Labor Statistics ).    

MBA graduates specializing in IT are well-positioned to pursue a wide range of career paths, including:

• Chief Technology Officer (CTO)
• Database Management Attendant
• Network Security Manager
• Information Technology Consultant
• Information Systems Manager
• Data Analytics Manager
• Cybersecurity Manager
• IT Operations Manager

Dr. Bowen says that the skills and knowledge learned in this advanced degree program are being used in increasingly creative ways across different sectors.

" Information technology is relevant to all industries,” she said. “Recently, I observed an insurance company stating they were a tech company that sold insurance. I share this example because it implies that an organization's culture can influence the relevance of technology. This highlights the versatility of an MBA program in IT, which is valuable across career pathways ranging from finance and healthcare to manufacturing and consulting.”

Salary Expectations for an MBA in Information Technology

According to Lightcast™ data, the average advertised annual salary for graduates with an MBA in IT is between $74,500 and $98,900, depending on your location, chosen industry and years of experience.

Compared to other MBA degrees with specializations, such as finance or marketing, those with an advanced degree in information technology still earn a competitive salary. This reflects the high demand for professionals with dual expertise in both business and technology.

The Value of an IT MBA: Is it Worth the Time and Money?

According to the National Center for Education Statistics, the average tuition cost for an MBA program is $41,026. However, weighing this investment against the potential salary increase and career advancement opportunities that an MBA in IT can provide is essential.

"The primary challenge students may experience is not knowing what they want to do with the degree," says Dr. Bowen of Franklin University . "Individuals need to know how to leverage their degree, knowledge, and experience as a trifecta approach to maximize it. The degree works best when applied."

Your return on investment (ROI) data will depend on the career you pursue. However, this analysis should consider factors such as average starting salaries for your desired career path and the potential for growth and advancement.

In addition to career stability and profitability, an MBA in IT can also equip you with a diverse set of marketable skills. These include far-reaching skillsets such as executive leadership, business analytics and strategy, marketing management, financial and managerial accounting, human resource management and information systems management—all of which help to provide you with a competitive edge in the job market.

Your Path Toward a Career in IT Starts Here

Franklin University's business administration degree in information technology offers a unique combination of strategic management and technical understanding. It prepares you for a wide range of rewarding careers and equips you with the agility and adaptability to thrive in today's competitive business landscape.

If you're ready to embark on your journey toward becoming a tech-savvy business leader, Franklin University can help.

Apply now for Franklin’s MBA in information technology program and unlock your full potential. You can also check out Franklin’s MBA programs page for more information or request additional info by quickly filling out this short form.

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• Published: 31 August 2024

Knowledge mapping and evolution of research on older adults’ technology acceptance: a bibliometric study from 2013 to 2023

• Xianru Shang   ORCID: orcid.org/0009-0000-8906-3216 1 ,
• Zijian Liu 1 ,
• Chen Gong 1 ,
• Zhigang Hu 1 ,
• Yuexuan Wu 1 &
• Chengliang Wang   ORCID: orcid.org/0000-0003-2208-3508 2  

Humanities and Social Sciences Communications volume  11 , Article number:  1115 ( 2024 ) Cite this article

Metrics details

• Science, technology and society

The rapid expansion of information technology and the intensification of population aging are two prominent features of contemporary societal development. Investigating older adults’ acceptance and use of technology is key to facilitating their integration into an information-driven society. Given this context, the technology acceptance of older adults has emerged as a prioritized research topic, attracting widespread attention in the academic community. However, existing research remains fragmented and lacks a systematic framework. To address this gap, we employed bibliometric methods, utilizing the Web of Science Core Collection to conduct a comprehensive review of literature on older adults’ technology acceptance from 2013 to 2023. Utilizing VOSviewer and CiteSpace for data assessment and visualization, we created knowledge mappings of research on older adults’ technology acceptance. Our study employed multidimensional methods such as co-occurrence analysis, clustering, and burst analysis to: (1) reveal research dynamics, key journals, and domains in this field; (2) identify leading countries, their collaborative networks, and core research institutions and authors; (3) recognize the foundational knowledge system centered on theoretical model deepening, emerging technology applications, and research methods and evaluation, uncovering seminal literature and observing a shift from early theoretical and influential factor analyses to empirical studies focusing on individual factors and emerging technologies; (4) moreover, current research hotspots are primarily in the areas of factors influencing technology adoption, human-robot interaction experiences, mobile health management, and aging-in-place technology, highlighting the evolutionary context and quality distribution of research themes. Finally, we recommend that future research should deeply explore improvements in theoretical models, long-term usage, and user experience evaluation. Overall, this study presents a clear framework of existing research in the field of older adults’ technology acceptance, providing an important reference for future theoretical exploration and innovative applications.

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Introduction.

In contemporary society, the rapid development of information technology has been intricately intertwined with the intensifying trend of population aging. According to the latest United Nations forecast, by 2050, the global population aged 65 and above is expected to reach 1.6 billion, representing about 16% of the total global population (UN 2023 ). Given the significant challenges of global aging, there is increasing evidence that emerging technologies have significant potential to maintain health and independence for older adults in their home and healthcare environments (Barnard et al. 2013 ; Soar 2010 ; Vancea and Solé-Casals 2016 ). This includes, but is not limited to, enhancing residential safety with smart home technologies (Touqeer et al. 2021 ; Wang et al. 2022 ), improving living independence through wearable technologies (Perez et al. 2023 ), and increasing medical accessibility via telehealth services (Kruse et al. 2020 ). Technological innovations are redefining the lifestyles of older adults, encouraging a shift from passive to active participation (González et al. 2012 ; Mostaghel 2016 ). Nevertheless, the effective application and dissemination of technology still depends on user acceptance and usage intentions (Naseri et al. 2023 ; Wang et al. 2023a ; Xia et al. 2024 ; Yu et al. 2023 ). Particularly, older adults face numerous challenges in accepting and using new technologies. These challenges include not only physical and cognitive limitations but also a lack of technological experience, along with the influences of social and economic factors (Valk et al. 2018 ; Wilson et al. 2021 ).

User acceptance of technology is a significant focus within information systems (IS) research (Dai et al. 2024 ), with several models developed to explain and predict user behavior towards technology usage, including the Technology Acceptance Model (TAM) (Davis 1989 ), TAM2, TAM3, and the Unified Theory of Acceptance and Use of Technology (UTAUT) (Venkatesh et al. 2003 ). Older adults, as a group with unique needs, exhibit different behavioral patterns during technology acceptance than other user groups, and these uniquenesses include changes in cognitive abilities, as well as motivations, attitudes, and perceptions of the use of new technologies (Chen and Chan 2011 ). The continual expansion of technology introduces considerable challenges for older adults, rendering the understanding of their technology acceptance a research priority. Thus, conducting in-depth research into older adults’ acceptance of technology is critically important for enhancing their integration into the information society and improving their quality of life through technological advancements.

Reviewing relevant literature to identify research gaps helps further solidify the theoretical foundation of the research topic. However, many existing literature reviews primarily focus on the factors influencing older adults’ acceptance or intentions to use technology. For instance, Ma et al. ( 2021 ) conducted a comprehensive analysis of the determinants of older adults’ behavioral intentions to use technology; Liu et al. ( 2022 ) categorized key variables in studies of older adults’ technology acceptance, noting a shift in focus towards social and emotional factors; Yap et al. ( 2022 ) identified seven categories of antecedents affecting older adults’ use of technology from an analysis of 26 articles, including technological, psychological, social, personal, cost, behavioral, and environmental factors; Schroeder et al. ( 2023 ) extracted 119 influencing factors from 59 articles and further categorized these into six themes covering demographics, health status, and emotional awareness. Additionally, some studies focus on the application of specific technologies, such as Ferguson et al. ( 2021 ), who explored barriers and facilitators to older adults using wearable devices for heart monitoring, and He et al. ( 2022 ) and Baer et al. ( 2022 ), who each conducted in-depth investigations into the acceptance of social assistive robots and mobile nutrition and fitness apps, respectively. In summary, current literature reviews on older adults’ technology acceptance exhibit certain limitations. Due to the interdisciplinary nature and complex knowledge structure of this field, traditional literature reviews often rely on qualitative analysis, based on literature analysis and periodic summaries, which lack sufficient objectivity and comprehensiveness. Additionally, systematic research is relatively limited, lacking a macroscopic description of the research trajectory from a holistic perspective. Over the past decade, research on older adults’ technology acceptance has experienced rapid growth, with a significant increase in literature, necessitating the adoption of new methods to review and examine the developmental trends in this field (Chen 2006 ; Van Eck and Waltman 2010 ). Bibliometric analysis, as an effective quantitative research method, analyzes published literature through visualization, offering a viable approach to extracting patterns and insights from a large volume of papers, and has been widely applied in numerous scientific research fields (Achuthan et al. 2023 ; Liu and Duffy 2023 ). Therefore, this study will employ bibliometric methods to systematically analyze research articles related to older adults’ technology acceptance published in the Web of Science Core Collection from 2013 to 2023, aiming to understand the core issues and evolutionary trends in the field, and to provide valuable references for future related research. Specifically, this study aims to explore and answer the following questions:

RQ1: What are the research dynamics in the field of older adults’ technology acceptance over the past decade? What are the main academic journals and fields that publish studies related to older adults’ technology acceptance?

RQ2: How is the productivity in older adults’ technology acceptance research distributed among countries, institutions, and authors?

RQ3: What are the knowledge base and seminal literature in older adults’ technology acceptance research? How has the research theme progressed?

RQ4: What are the current hot topics and their evolutionary trajectories in older adults’ technology acceptance research? How is the quality of research distributed?

Methodology and materials

Research method.

In recent years, bibliometrics has become one of the crucial methods for analyzing literature reviews and is widely used in disciplinary and industrial intelligence analysis (Jing et al. 2023 ; Lin and Yu 2024a ; Wang et al. 2024a ; Xu et al. 2021 ). Bibliometric software facilitates the visualization analysis of extensive literature data, intuitively displaying the network relationships and evolutionary processes between knowledge units, and revealing the underlying knowledge structure and potential information (Chen et al. 2024 ; López-Robles et al. 2018 ; Wang et al. 2024c ). This method provides new insights into the current status and trends of specific research areas, along with quantitative evidence, thereby enhancing the objectivity and scientific validity of the research conclusions (Chen et al. 2023 ; Geng et al. 2024 ). VOSviewer and CiteSpace are two widely used bibliometric software tools in academia (Pan et al. 2018 ), recognized for their robust functionalities based on the JAVA platform. Although each has its unique features, combining these two software tools effectively constructs mapping relationships between literature knowledge units and clearly displays the macrostructure of the knowledge domains. Particularly, VOSviewer, with its excellent graphical representation capabilities, serves as an ideal tool for handling large datasets and precisely identifying the focal points and hotspots of research topics. Therefore, this study utilizes VOSviewer (version 1.6.19) and CiteSpace (version 6.1.R6), combined with in-depth literature analysis, to comprehensively examine and interpret the research theme of older adults’ technology acceptance through an integrated application of quantitative and qualitative methods.

Data source

Web of Science is a comprehensively recognized database in academia, featuring literature that has undergone rigorous peer review and editorial scrutiny (Lin and Yu 2024b ; Mongeon and Paul-Hus 2016 ; Pranckutė 2021 ). This study utilizes the Web of Science Core Collection as its data source, specifically including three major citation indices: Science Citation Index Expanded (SCIE), Social Sciences Citation Index (SSCI), and Arts & Humanities Citation Index (A&HCI). These indices encompass high-quality research literature in the fields of science, social sciences, and arts and humanities, ensuring the comprehensiveness and reliability of the data. We combined “older adults” with “technology acceptance” through thematic search, with the specific search strategy being: TS = (elder OR elderly OR aging OR ageing OR senile OR senior OR old people OR “older adult*”) AND TS = (“technology acceptance” OR “user acceptance” OR “consumer acceptance”). The time span of literature search is from 2013 to 2023, with the types limited to “Article” and “Review” and the language to “English”. Additionally, the search was completed by October 27, 2023, to avoid data discrepancies caused by database updates. The initial search yielded 764 journal articles. Given that searches often retrieve articles that are superficially relevant but actually non-compliant, manual screening post-search was essential to ensure the relevance of the literature (Chen et al. 2024 ). Through manual screening, articles significantly deviating from the research theme were eliminated and rigorously reviewed. Ultimately, this study obtained 500 valid sample articles from the Web of Science Core Collection. The complete PRISMA screening process is illustrated in Fig. 1 .

Presentation of the data culling process in detail.

Data standardization

Raw data exported from databases often contain multiple expressions of the same terminology (Nguyen and Hallinger 2020 ). To ensure the accuracy and consistency of data, it is necessary to standardize the raw data (Strotmann and Zhao 2012 ). This study follows the data standardization process proposed by Taskin and Al ( 2019 ), mainly executing the following operations:

(1) Standardization of author and institution names is conducted to address different name expressions for the same author. For instance, “Chan, Alan Hoi Shou” and “Chan, Alan H. S.” are considered the same author, and distinct authors with the same name are differentiated by adding identifiers. Diverse forms of institutional names are unified to address variations caused by name changes or abbreviations, such as standardizing “FRANKFURT UNIV APPL SCI” and “Frankfurt University of Applied Sciences,” as well as “Chinese University of Hong Kong” and “University of Hong Kong” to consistent names.

(2) Different expressions of journal names are unified. For example, “International Journal of Human-Computer Interaction” and “Int J Hum Comput Interact” are standardized to a single name. This ensures consistency in journal names and prevents misclassification of literature due to differing journal names. Additionally, it involves checking if the journals have undergone name changes in the past decade to prevent any impact on the analysis due to such changes.

(3) Keywords data are cleansed by removing words that do not directly pertain to specific research content (e.g., people, review), merging synonyms (e.g., “UX” and “User Experience,” “aging-in-place” and “aging in place”), and standardizing plural forms of keywords (e.g., “assistive technologies” and “assistive technology,” “social robots” and “social robot”). This reduces redundant information in knowledge mapping.

Bibliometric results and analysis

Distribution power (rq1), literature descriptive statistical analysis.

Table 1 presents a detailed descriptive statistical overview of the literature in the field of older adults’ technology acceptance. After deduplication using the CiteSpace software, this study confirmed a valid sample size of 500 articles. Authored by 1839 researchers, the documents encompass 792 research institutions across 54 countries and are published in 217 different academic journals. As of the search cutoff date, these articles have accumulated 13,829 citations, with an annual average of 1156 citations, and an average of 27.66 citations per article. The h-index, a composite metric of quantity and quality of scientific output (Kamrani et al. 2021 ), reached 60 in this study.

Trends in publications and disciplinary distribution

The number of publications and citations are significant indicators of the research field’s development, reflecting its continuity, attention, and impact (Ale Ebrahim et al. 2014 ). The ranking of annual publications and citations in the field of older adults’ technology acceptance studies is presented chronologically in Fig. 2A . The figure shows a clear upward trend in the amount of literature in this field. Between 2013 and 2017, the number of publications increased slowly and decreased in 2018. However, in 2019, the number of publications increased rapidly to 52 and reached a peak of 108 in 2022, which is 6.75 times higher than in 2013. In 2022, the frequency of document citations reached its highest point with 3466 citations, reflecting the widespread recognition and citation of research in this field. Moreover, the curve of the annual number of publications fits a quadratic function, with a goodness-of-fit R 2 of 0.9661, indicating that the number of future publications is expected to increase even more rapidly.

A Trends in trends in annual publications and citations (2013–2023). B Overlay analysis of the distribution of discipline fields.

Figure 2B shows that research on older adults’ technology acceptance involves the integration of multidisciplinary knowledge. According to Web of Science Categories, these 500 articles are distributed across 85 different disciplines. We have tabulated the top ten disciplines by publication volume (Table 2 ), which include Medical Informatics (75 articles, 15.00%), Health Care Sciences & Services (71 articles, 14.20%), Gerontology (61 articles, 12.20%), Public Environmental & Occupational Health (57 articles, 11.40%), and Geriatrics & Gerontology (52 articles, 10.40%), among others. The high output in these disciplines reflects the concentrated global academic interest in this comprehensive research topic. Additionally, interdisciplinary research approaches provide diverse perspectives and a solid theoretical foundation for studies on older adults’ technology acceptance, also paving the way for new research directions.

Knowledge flow analysis

A dual-map overlay is a CiteSpace map superimposed on top of a base map, which shows the interrelationships between journals in different domains, representing the publication and citation activities in each domain (Chen and Leydesdorff 2014 ). The overlay map reveals the link between the citing domain (on the left side) and the cited domain (on the right side), reflecting the knowledge flow of the discipline at the journal level (Leydesdorff and Rafols 2012 ). We utilize the in-built Z-score algorithm of the software to cluster the graph, as shown in Fig. 3 .

The left side shows the citing journal, and the right side shows the cited journal.

Figure 3 shows the distribution of citing journals clusters for older adults’ technology acceptance on the left side, while the right side refers to the main cited journals clusters. Two knowledge flow citation trajectories were obtained; they are presented by the color of the cited regions, and the thickness of these trajectories is proportional to the Z-score scaled frequency of citations (Chen et al. 2014 ). Within the cited regions, the most popular fields with the most records covered are “HEALTH, NURSING, MEDICINE” and “PSYCHOLOGY, EDUCATION, SOCIAL”, and the elliptical aspect ratio of these two fields stands out. Fields have prominent elliptical aspect ratios, highlighting their significant influence on older adults’ technology acceptance research. Additionally, the major citation trajectories originate in these two areas and progress to the frontier research area of “PSYCHOLOGY, EDUCATION, HEALTH”. It is worth noting that the citation trajectory from “PSYCHOLOGY, EDUCATION, SOCIAL” has a significant Z-value (z = 6.81), emphasizing the significance and impact of this development path. In the future, “MATHEMATICS, SYSTEMS, MATHEMATICAL”, “MOLECULAR, BIOLOGY, IMMUNOLOGY”, and “NEUROLOGY, SPORTS, OPHTHALMOLOGY” may become emerging fields. The fields of “MEDICINE, MEDICAL, CLINICAL” may be emerging areas of cutting-edge research.

Main research journals analysis

Table 3 provides statistics for the top ten journals by publication volume in the field of older adults’ technology acceptance. Together, these journals have published 137 articles, accounting for 27.40% of the total publications, indicating that there is no highly concentrated core group of journals in this field, with publications being relatively dispersed. Notably, Computers in Human Behavior , Journal of Medical Internet Research , and International Journal of Human-Computer Interaction each lead with 15 publications. In terms of citation metrics, International Journal of Medical Informatics and Computers in Human Behavior stand out significantly, with the former accumulating a total of 1,904 citations, averaging 211.56 citations per article, and the latter totaling 1,449 citations, with an average of 96.60 citations per article. These figures emphasize the academic authority and widespread impact of these journals within the research field.

Research power (RQ2)

Countries and collaborations analysis.

The analysis revealed the global research pattern for country distribution and collaboration (Chen et al. 2019 ). Figure 4A shows the network of national collaborations on older adults’ technology acceptance research. The size of the bubbles represents the amount of publications in each country, while the thickness of the connecting lines expresses the closeness of the collaboration among countries. Generally, this research subject has received extensive international attention, with China and the USA publishing far more than any other countries. China has established notable research collaborations with the USA, UK and Malaysia in this field, while other countries have collaborations, but the closeness is relatively low and scattered. Figure 4B shows the annual publication volume dynamics of the top ten countries in terms of total publications. Since 2017, China has consistently increased its annual publications, while the USA has remained relatively stable. In 2019, the volume of publications in each country increased significantly, this was largely due to the global outbreak of the COVID-19 pandemic, which has led to increased reliance on information technology among the elderly for medical consultations, online socialization, and health management (Sinha et al. 2021 ). This phenomenon has led to research advances in technology acceptance among older adults in various countries. Table 4 shows that the top ten countries account for 93.20% of the total cumulative number of publications, with each country having published more than 20 papers. Among these ten countries, all of them except China are developed countries, indicating that the research field of older adults’ technology acceptance has received general attention from developed countries. Currently, China and the USA were the leading countries in terms of publications with 111 and 104 respectively, accounting for 22.20% and 20.80%. The UK, Germany, Italy, and the Netherlands also made significant contributions. The USA and China ranked first and second in terms of the number of citations, while the Netherlands had the highest average citations, indicating the high impact and quality of its research. The UK has shown outstanding performance in international cooperation, while the USA highlights its significant academic influence in this field with the highest h-index value.

A National collaboration network. B Annual volume of publications in the top 10 countries.

Institutions and authors analysis

Analyzing the number of publications and citations can reveal an institution’s or author’s research strength and influence in a particular research area (Kwiek 2021 ). Tables 5 and 6 show the statistics of the institutions and authors whose publication counts are in the top ten, respectively. As shown in Table 5 , higher education institutions hold the main position in this research field. Among the top ten institutions, City University of Hong Kong and The University of Hong Kong from China lead with 14 and 9 publications, respectively. City University of Hong Kong has the highest h-index, highlighting its significant influence in the field. It is worth noting that Tilburg University in the Netherlands is not among the top five in terms of publications, but the high average citation count (130.14) of its literature demonstrates the high quality of its research.

After analyzing the authors’ output using Price’s Law (Redner 1998 ), the highest number of publications among the authors counted ( n  = 10) defines a publication threshold of 3 for core authors in this research area. As a result of quantitative screening, a total of 63 core authors were identified. Table 6 shows that Chen from Zhejiang University, China, Ziefle from RWTH Aachen University, Germany, and Rogers from Macquarie University, Australia, were the top three authors in terms of the number of publications, with 10, 9, and 8 articles, respectively. In terms of average citation rate, Peek and Wouters, both scholars from the Netherlands, have significantly higher rates than other scholars, with 183.2 and 152.67 respectively. This suggests that their research is of high quality and widely recognized. Additionally, Chen and Rogers have high h-indices in this field.

Knowledge base and theme progress (RQ3)

Research knowledge base.

Co-citation relationships occur when two documents are cited together (Zhang and Zhu 2022 ). Co-citation mapping uses references as nodes to represent the knowledge base of a subject area (Min et al. 2021). Figure 5A illustrates co-occurrence mapping in older adults’ technology acceptance research, where larger nodes signify higher co-citation frequencies. Co-citation cluster analysis can be used to explore knowledge structure and research boundaries (Hota et al. 2020 ; Shiau et al. 2023 ). The co-citation clustering mapping of older adults’ technology acceptance research literature (Fig. 5B ) shows that the Q value of the clustering result is 0.8129 (>0.3), and the average value of the weight S is 0.9391 (>0.7), indicating that the clusters are uniformly distributed with a significant and credible structure. This further proves that the boundaries of the research field are clear and there is significant differentiation in the field. The figure features 18 cluster labels, each associated with thematic color blocks corresponding to different time slices. Highlighted emerging research themes include #2 Smart Home Technology, #7 Social Live, and #10 Customer Service. Furthermore, the clustering labels extracted are primarily classified into three categories: theoretical model deepening, emerging technology applications, research methods and evaluation, as detailed in Table 7 .

A Co-citation analysis of references. B Clustering network analysis of references.

Seminal literature analysis

The top ten nodes in terms of co-citation frequency were selected for further analysis. Table 8 displays the corresponding node information. Studies were categorized into four main groups based on content analysis. (1) Research focusing on specific technology usage by older adults includes studies by Peek et al. ( 2014 ), Ma et al. ( 2016 ), Hoque and Sorwar ( 2017 ), and Li et al. ( 2019 ), who investigated the factors influencing the use of e-technology, smartphones, mHealth, and smart wearables, respectively. (2) Concerning the development of theoretical models of technology acceptance, Chen and Chan ( 2014 ) introduced the Senior Technology Acceptance Model (STAM), and Macedo ( 2017 ) analyzed the predictive power of UTAUT2 in explaining older adults’ intentional behaviors and information technology usage. (3) In exploring older adults’ information technology adoption and behavior, Lee and Coughlin ( 2015 ) emphasized that the adoption of technology by older adults is a multifactorial process that includes performance, price, value, usability, affordability, accessibility, technical support, social support, emotion, independence, experience, and confidence. Yusif et al. ( 2016 ) conducted a literature review examining the key barriers affecting older adults’ adoption of assistive technology, including factors such as privacy, trust, functionality/added value, cost, and stigma. (4) From the perspective of research into older adults’ technology acceptance, Mitzner et al. ( 2019 ) assessed the long-term usage of computer systems designed for the elderly, whereas Guner and Acarturk ( 2020 ) compared information technology usage and acceptance between older and younger adults. The breadth and prevalence of this literature make it a vital reference for researchers in the field, also providing new perspectives and inspiration for future research directions.

Research thematic progress

Burst citation is a node of literature that guides the sudden change in dosage, which usually represents a prominent development or major change in a particular field, with innovative and forward-looking qualities. By analyzing the emergent literature, it is often easy to understand the dynamics of the subject area, mapping the emerging thematic change (Chen et al. 2022 ). Figure 6 shows the burst citation mapping in the field of older adults’ technology acceptance research, with burst citations represented by red nodes (Fig. 6A ). For the ten papers with the highest burst intensity (Fig. 6B ), this study will conduct further analysis in conjunction with literature review.

A Burst detection of co-citation. B The top 10 references with the strongest citation bursts.

As shown in Fig. 6 , Mitzner et al. ( 2010 ) broke the stereotype that older adults are fearful of technology, found that they actually have positive attitudes toward technology, and emphasized the centrality of ease of use and usefulness in the process of technology acceptance. This finding provides an important foundation for subsequent research. During the same period, Wagner et al. ( 2010 ) conducted theory-deepening and applied research on technology acceptance among older adults. The research focused on older adults’ interactions with computers from the perspective of Social Cognitive Theory (SCT). This expanded the understanding of technology acceptance, particularly regarding the relationship between behavior, environment, and other SCT elements. In addition, Pan and Jordan-Marsh ( 2010 ) extended the TAM to examine the interactions among predictors of perceived usefulness, perceived ease of use, subjective norm, and convenience conditions when older adults use the Internet, taking into account the moderating roles of gender and age. Heerink et al. ( 2010 ) adapted and extended the UTAUT, constructed a technology acceptance model specifically designed for older users’ acceptance of assistive social agents, and validated it using controlled experiments and longitudinal data, explaining intention to use by combining functional assessment and social interaction variables.

Then the research theme shifted to an in-depth analysis of the factors influencing technology acceptance among older adults. Two papers with high burst strengths emerged during this period: Peek et al. ( 2014 ) (Strength = 12.04), Chen and Chan ( 2014 ) (Strength = 9.81). Through a systematic literature review and empirical study, Peek STM and Chen K, among others, identified multidimensional factors that influence older adults’ technology acceptance. Peek et al. ( 2014 ) analyzed literature on the acceptance of in-home care technology among older adults and identified six factors that influence their acceptance: concerns about technology, expected benefits, technology needs, technology alternatives, social influences, and older adult characteristics, with a focus on differences between pre- and post-implementation factors. Chen and Chan ( 2014 ) constructed the STAM by administering a questionnaire to 1012 older adults and adding eight important factors, including technology anxiety, self-efficacy, cognitive ability, and physical function, based on the TAM. This enriches the theoretical foundation of the field. In addition, Braun ( 2013 ) highlighted the role of perceived usefulness, trust in social networks, and frequency of Internet use in older adults’ use of social networks, while ease of use and social pressure were not significant influences. These findings contribute to the study of older adults’ technology acceptance within specific technology application domains.

Recent research has focused on empirical studies of personal factors and emerging technologies. Ma et al. ( 2016 ) identified key personal factors affecting smartphone acceptance among older adults through structured questionnaires and face-to-face interviews with 120 participants. The study found that cost, self-satisfaction, and convenience were important factors influencing perceived usefulness and ease of use. This study offers empirical evidence to comprehend the main factors that drive smartphone acceptance among Chinese older adults. Additionally, Yusif et al. ( 2016 ) presented an overview of the obstacles that hinder older adults’ acceptance of assistive technologies, focusing on privacy, trust, and functionality.

In summary, research on older adults’ technology acceptance has shifted from early theoretical deepening and analysis of influencing factors to empirical studies in the areas of personal factors and emerging technologies, which have greatly enriched the theoretical basis of older adults’ technology acceptance and provided practical guidance for the design of emerging technology products.

Research hotspots, evolutionary trends, and quality distribution (RQ4)

Core keywords analysis.

Keywords concise the main idea and core of the literature, and are a refined summary of the research content (Huang et al. 2021 ). In CiteSpace, nodes with a centrality value greater than 0.1 are considered to be critical nodes. Analyzing keywords with high frequency and centrality helps to visualize the hot topics in the research field (Park et al. 2018 ). The merged keywords were imported into CiteSpace, and the top 10 keywords were counted and sorted by frequency and centrality respectively, as shown in Table 9 . The results show that the keyword “TAM” has the highest frequency (92), followed by “UTAUT” (24), which reflects that the in-depth study of the existing technology acceptance model and its theoretical expansion occupy a central position in research related to older adults’ technology acceptance. Furthermore, the terms ‘assistive technology’ and ‘virtual reality’ are both high-frequency and high-centrality terms (frequency = 17, centrality = 0.10), indicating that the research on assistive technology and virtual reality for older adults is the focus of current academic attention.

Research hotspots analysis

Using VOSviewer for keyword co-occurrence analysis organizes keywords into groups or clusters based on their intrinsic connections and frequencies, clearly highlighting the research field’s hot topics. The connectivity among keywords reveals correlations between different topics. To ensure accuracy, the analysis only considered the authors’ keywords. Subsequently, the keywords were filtered by setting the keyword frequency to 5 to obtain the keyword clustering map of the research on older adults’ technology acceptance research keyword clustering mapping (Fig. 7 ), combined with the keyword co-occurrence clustering network (Fig. 7A ) and the corresponding density situation (Fig. 7B ) to make a detailed analysis of the following four groups of clustered themes.

A Co-occurrence clustering network. B Keyword density.

Cluster #1—Research on the factors influencing technology adoption among older adults is a prominent topic, covering age, gender, self-efficacy, attitude, and and intention to use (Berkowsky et al. 2017 ; Wang et al. 2017 ). It also examined older adults’ attitudes towards and acceptance of digital health technologies (Ahmad and Mozelius, 2022 ). Moreover, the COVID-19 pandemic, significantly impacting older adults’ technology attitudes and usage, has underscored the study’s importance and urgency. Therefore, it is crucial to conduct in-depth studies on how older adults accept, adopt, and effectively use new technologies, to address their needs and help them overcome the digital divide within digital inclusion. This will improve their quality of life and healthcare experiences.

Cluster #2—Research focuses on how older adults interact with assistive technologies, especially assistive robots and health monitoring devices, emphasizing trust, usability, and user experience as crucial factors (Halim et al. 2022 ). Moreover, health monitoring technologies effectively track and manage health issues common in older adults, like dementia and mild cognitive impairment (Lussier et al. 2018 ; Piau et al. 2019 ). Interactive exercise games and virtual reality have been deployed to encourage more physical and cognitive engagement among older adults (Campo-Prieto et al. 2021 ). Personalized and innovative technology significantly enhances older adults’ participation, improving their health and well-being.

Cluster #3—Optimizing health management for older adults using mobile technology. With the development of mobile health (mHealth) and health information technology, mobile applications, smartphones, and smart wearable devices have become effective tools to help older users better manage chronic conditions, conduct real-time health monitoring, and even receive telehealth services (Dupuis and Tsotsos 2018 ; Olmedo-Aguirre et al. 2022 ; Kim et al. 2014 ). Additionally, these technologies can mitigate the problem of healthcare resource inequality, especially in developing countries. Older adults’ acceptance and use of these technologies are significantly influenced by their behavioral intentions, motivational factors, and self-management skills. These internal motivational factors, along with external factors, jointly affect older adults’ performance in health management and quality of life.

Cluster #4—Research on technology-assisted home care for older adults is gaining popularity. Environmentally assisted living enhances older adults’ independence and comfort at home, offering essential support and security. This has a crucial impact on promoting healthy aging (Friesen et al. 2016 ; Wahlroos et al. 2023 ). The smart home is a core application in this field, providing a range of solutions that facilitate independent living for the elderly in a highly integrated and user-friendly manner. This fulfills different dimensions of living and health needs (Majumder et al. 2017 ). Moreover, eHealth offers accurate and personalized health management and healthcare services for older adults (Delmastro et al. 2018 ), ensuring their needs are met at home. Research in this field often employs qualitative methods and structural equation modeling to fully understand older adults’ needs and experiences at home and analyze factors influencing technology adoption.

Evolutionary trends analysis

To gain a deeper understanding of the evolutionary trends in research hotspots within the field of older adults’ technology acceptance, we conducted a statistical analysis of the average appearance times of keywords, using CiteSpace to generate the time-zone evolution mapping (Fig. 8 ) and burst keywords. The time-zone mapping visually displays the evolution of keywords over time, intuitively reflecting the frequency and initial appearance of keywords in research, commonly used to identify trends in research topics (Jing et al. 2024a ; Kumar et al. 2021 ). Table 10 lists the top 15 keywords by burst strength, with the red sections indicating high-frequency citations and their burst strength in specific years. These burst keywords reveal the focus and trends of research themes over different periods (Kleinberg 2002 ). Combining insights from the time-zone mapping and burst keywords provides more objective and accurate research insights (Wang et al. 2023b ).

Reflecting the frequency and time of first appearance of keywords in the study.

An integrated analysis of Fig. 8 and Table 10 shows that early research on older adults’ technology acceptance primarily focused on factors such as perceived usefulness, ease of use, and attitudes towards information technology, including their use of computers and the internet (Pan and Jordan-Marsh 2010 ), as well as differences in technology use between older adults and other age groups (Guner and Acarturk 2020 ). Subsequently, the research focus expanded to improving the quality of life for older adults, exploring how technology can optimize health management and enhance the possibility of independent living, emphasizing the significant role of technology in improving the quality of life for the elderly. With ongoing technological advancements, recent research has shifted towards areas such as “virtual reality,” “telehealth,” and “human-robot interaction,” with a focus on the user experience of older adults (Halim et al. 2022 ). The appearance of keywords such as “physical activity” and “exercise” highlights the value of technology in promoting physical activity and health among older adults. This phase of research tends to make cutting-edge technology genuinely serve the practical needs of older adults, achieving its widespread application in daily life. Additionally, research has focused on expanding and quantifying theoretical models of older adults’ technology acceptance, involving keywords such as “perceived risk”, “validation” and “UTAUT”.

In summary, from 2013 to 2023, the field of older adults’ technology acceptance has evolved from initial explorations of influencing factors, to comprehensive enhancements in quality of life and health management, and further to the application and deepening of theoretical models and cutting-edge technologies. This research not only reflects the diversity and complexity of the field but also demonstrates a comprehensive and in-depth understanding of older adults’ interactions with technology across various life scenarios and needs.

Research quality distribution

To reveal the distribution of research quality in the field of older adults’ technology acceptance, a strategic diagram analysis is employed to calculate and illustrate the internal development and interrelationships among various research themes (Xie et al. 2020 ). The strategic diagram uses Centrality as the X-axis and Density as the Y-axis to divide into four quadrants, where the X-axis represents the strength of the connection between thematic clusters and other themes, with higher values indicating a central position in the research field; the Y-axis indicates the level of development within the thematic clusters, with higher values denoting a more mature and widely recognized field (Li and Zhou 2020 ).

Through cluster analysis and manual verification, this study categorized 61 core keywords (Frequency ≥5) into 11 thematic clusters. Subsequently, based on the keywords covered by each thematic cluster, the research themes and their directions for each cluster were summarized (Table 11 ), and the centrality and density coordinates for each cluster were precisely calculated (Table 12 ). Finally, a strategic diagram of the older adults’ technology acceptance research field was constructed (Fig. 9 ). Based on the distribution of thematic clusters across the quadrants in the strategic diagram, the structure and developmental trends of the field were interpreted.

Classification and visualization of theme clusters based on density and centrality.

As illustrated in Fig. 9 , (1) the theme clusters of #3 Usage Experience and #4 Assisted Living Technology are in the first quadrant, characterized by high centrality and density. Their internal cohesion and close links with other themes indicate their mature development, systematic research content or directions have been formed, and they have a significant influence on other themes. These themes play a central role in the field of older adults’ technology acceptance and have promising prospects. (2) The theme clusters of #6 Smart Devices, #9 Theoretical Models, and #10 Mobile Health Applications are in the second quadrant, with higher density but lower centrality. These themes have strong internal connections but weaker external links, indicating that these three themes have received widespread attention from researchers and have been the subject of related research, but more as self-contained systems and exhibit independence. Therefore, future research should further explore in-depth cooperation and cross-application with other themes. (3) The theme clusters of #7 Human-Robot Interaction, #8 Characteristics of the Elderly, and #11 Research Methods are in the third quadrant, with lower centrality and density. These themes are loosely connected internally and have weak links with others, indicating their developmental immaturity. Compared to other topics, they belong to the lower attention edge and niche themes, and there is a need for further investigation. (4) The theme clusters of #1 Digital Healthcare Technology, #2 Psychological Factors, and #5 Socio-Cultural Factors are located in the fourth quadrant, with high centrality but low density. Although closely associated with other research themes, the internal cohesion within these clusters is relatively weak. This suggests that while these themes are closely linked to other research areas, their own development remains underdeveloped, indicating a core immaturity. Nevertheless, these themes are crucial within the research domain of elderly technology acceptance and possess significant potential for future exploration.

Discussion on distribution power (RQ1)

Over the past decade, academic interest and influence in the area of older adults’ technology acceptance have significantly increased. This trend is evidenced by a quantitative analysis of publication and citation volumes, particularly noticeable in 2019 and 2022, where there was a substantial rise in both metrics. The rise is closely linked to the widespread adoption of emerging technologies such as smart homes, wearable devices, and telemedicine among older adults. While these technologies have enhanced their quality of life, they also pose numerous challenges, sparking extensive research into their acceptance, usage behaviors, and influencing factors among the older adults (Pirzada et al. 2022 ; Garcia Reyes et al. 2023 ). Furthermore, the COVID-19 pandemic led to a surge in technology demand among older adults, especially in areas like medical consultation, online socialization, and health management, further highlighting the importance and challenges of technology. Health risks and social isolation have compelled older adults to rely on technology for daily activities, accelerating its adoption and application within this demographic. This phenomenon has made technology acceptance a critical issue, driving societal and academic focus on the study of technology acceptance among older adults.

The flow of knowledge at the level of high-output disciplines and journals, along with the primary publishing outlets, indicates the highly interdisciplinary nature of research into older adults’ technology acceptance. This reflects the complexity and breadth of issues related to older adults’ technology acceptance, necessitating the integration of multidisciplinary knowledge and approaches. Currently, research is primarily focused on medical health and human-computer interaction, demonstrating academic interest in improving health and quality of life for older adults and addressing the urgent needs related to their interactions with technology. In the field of medical health, research aims to provide advanced and innovative healthcare technologies and services to meet the challenges of an aging population while improving the quality of life for older adults (Abdi et al. 2020 ; Wilson et al. 2021 ). In the field of human-computer interaction, research is focused on developing smarter and more user-friendly interaction models to meet the needs of older adults in the digital age, enabling them to actively participate in social activities and enjoy a higher quality of life (Sayago, 2019 ). These studies are crucial for addressing the challenges faced by aging societies, providing increased support and opportunities for the health, welfare, and social participation of older adults.

Discussion on research power (RQ2)

This study analyzes leading countries and collaboration networks, core institutions and authors, revealing the global research landscape and distribution of research strength in the field of older adults’ technology acceptance, and presents quantitative data on global research trends. From the analysis of country distribution and collaborations, China and the USA hold dominant positions in this field, with developed countries like the UK, Germany, Italy, and the Netherlands also excelling in international cooperation and research influence. The significant investment in technological research and the focus on the technological needs of older adults by many developed countries reflect their rapidly aging societies, policy support, and resource allocation.

China is the only developing country that has become a major contributor in this field, indicating its growing research capabilities and high priority given to aging societies and technological innovation. Additionally, China has close collaborations with countries such as USA, the UK, and Malaysia, driven not only by technological research needs but also by shared challenges and complementarities in aging issues among these nations. For instance, the UK has extensive experience in social welfare and aging research, providing valuable theoretical guidance and practical experience. International collaborations, aimed at addressing the challenges of aging, integrate the strengths of various countries, advancing in-depth and widespread development in the research of technology acceptance among older adults.

At the institutional and author level, City University of Hong Kong leads in publication volume, with research teams led by Chan and Chen demonstrating significant academic activity and contributions. Their research primarily focuses on older adults’ acceptance and usage behaviors of various technologies, including smartphones, smart wearables, and social robots (Chen et al. 2015 ; Li et al. 2019 ; Ma et al. 2016 ). These studies, targeting specific needs and product characteristics of older adults, have developed new models of technology acceptance based on existing frameworks, enhancing the integration of these technologies into their daily lives and laying a foundation for further advancements in the field. Although Tilburg University has a smaller publication output, it holds significant influence in the field of older adults’ technology acceptance. Particularly, the high citation rate of Peek’s studies highlights their excellence in research. Peek extensively explored older adults’ acceptance and usage of home care technologies, revealing the complexity and dynamics of their technology use behaviors. His research spans from identifying systemic influencing factors (Peek et al. 2014 ; Peek et al. 2016 ), emphasizing familial impacts (Luijkx et al. 2015 ), to constructing comprehensive models (Peek et al. 2017 ), and examining the dynamics of long-term usage (Peek et al. 2019 ), fully reflecting the evolving technology landscape and the changing needs of older adults. Additionally, the ongoing contributions of researchers like Ziefle, Rogers, and Wouters in the field of older adults’ technology acceptance demonstrate their research influence and leadership. These researchers have significantly enriched the knowledge base in this area with their diverse perspectives. For instance, Ziefle has uncovered the complex attitudes of older adults towards technology usage, especially the trade-offs between privacy and security, and how different types of activities affect their privacy needs (Maidhof et al. 2023 ; Mujirishvili et al. 2023 ; Schomakers and Ziefle 2023 ; Wilkowska et al. 2022 ), reflecting a deep exploration and ongoing innovation in the field of older adults’ technology acceptance.

Discussion on knowledge base and thematic progress (RQ3)

Through co-citation analysis and systematic review of seminal literature, this study reveals the knowledge foundation and thematic progress in the field of older adults’ technology acceptance. Co-citation networks and cluster analyses illustrate the structural themes of the research, delineating the differentiation and boundaries within this field. Additionally, burst detection analysis offers a valuable perspective for understanding the thematic evolution in the field of technology acceptance among older adults. The development and innovation of theoretical models are foundational to this research. Researchers enhance the explanatory power of constructed models by deepening and expanding existing technology acceptance theories to address theoretical limitations. For instance, Heerink et al. ( 2010 ) modified and expanded the UTAUT model by integrating functional assessment and social interaction variables to create the almere model. This model significantly enhances the ability to explain the intentions of older users in utilizing assistive social agents and improves the explanation of actual usage behaviors. Additionally, Chen and Chan ( 2014 ) extended the TAM to include age-related health and capability features of older adults, creating the STAM, which substantially improves predictions of older adults’ technology usage behaviors. Personal attributes, health and capability features, and facilitating conditions have a direct impact on technology acceptance. These factors more effectively predict older adults’ technology usage behaviors than traditional attitudinal factors.

With the advancement of technology and the application of emerging technologies, new research topics have emerged, increasingly focusing on older adults’ acceptance and use of these technologies. Prior to this, the study by Mitzner et al. ( 2010 ) challenged the stereotype of older adults’ conservative attitudes towards technology, highlighting the central roles of usability and usefulness in the technology acceptance process. This discovery laid an important foundation for subsequent research. Research fields such as “smart home technology,” “social life,” and “customer service” are emerging, indicating a shift in focus towards the practical and social applications of technology in older adults’ lives. Research not only focuses on the technology itself but also on how these technologies integrate into older adults’ daily lives and how they can improve the quality of life through technology. For instance, studies such as those by Ma et al. ( 2016 ), Hoque and Sorwar ( 2017 ), and Li et al. ( 2019 ) have explored factors influencing older adults’ use of smartphones, mHealth, and smart wearable devices.

Furthermore, the diversification of research methodologies and innovation in evaluation techniques, such as the use of mixed methods, structural equation modeling (SEM), and neural network (NN) approaches, have enhanced the rigor and reliability of the findings, enabling more precise identification of the factors and mechanisms influencing technology acceptance. Talukder et al. ( 2020 ) employed an effective multimethodological strategy by integrating SEM and NN to leverage the complementary strengths of both approaches, thus overcoming their individual limitations and more accurately analyzing and predicting older adults’ acceptance of wearable health technologies (WHT). SEM is utilized to assess the determinants’ impact on the adoption of WHT, while neural network models validate SEM outcomes and predict the significance of key determinants. This combined approach not only boosts the models’ reliability and explanatory power but also provides a nuanced understanding of the motivations and barriers behind older adults’ acceptance of WHT, offering deep research insights.

Overall, co-citation analysis of the literature in the field of older adults’ technology acceptance has uncovered deeper theoretical modeling and empirical studies on emerging technologies, while emphasizing the importance of research methodological and evaluation innovations in understanding complex social science issues. These findings are crucial for guiding the design and marketing strategies of future technology products, especially in the rapidly growing market of older adults.

Discussion on research hotspots and evolutionary trends (RQ4)

By analyzing core keywords, we can gain deep insights into the hot topics, evolutionary trends, and quality distribution of research in the field of older adults’ technology acceptance. The frequent occurrence of the keywords “TAM” and “UTAUT” indicates that the applicability and theoretical extension of existing technology acceptance models among older adults remain a focal point in academia. This phenomenon underscores the enduring influence of the studies by Davis ( 1989 ) and Venkatesh et al. ( 2003 ), whose models provide a robust theoretical framework for explaining and predicting older adults’ acceptance and usage of emerging technologies. With the widespread application of artificial intelligence (AI) and big data technologies, these theoretical models have incorporated new variables such as perceived risk, trust, and privacy issues (Amin et al. 2024 ; Chen et al. 2024 ; Jing et al. 2024b ; Seibert et al. 2021 ; Wang et al. 2024b ), advancing the theoretical depth and empirical research in this field.

Keyword co-occurrence cluster analysis has revealed multiple research hotspots in the field, including factors influencing technology adoption, interactive experiences between older adults and assistive technologies, the application of mobile health technology in health management, and technology-assisted home care. These studies primarily focus on enhancing the quality of life and health management of older adults through emerging technologies, particularly in the areas of ambient assisted living, smart health monitoring, and intelligent medical care. In these domains, the role of AI technology is increasingly significant (Qian et al. 2021 ; Ho 2020 ). With the evolution of next-generation information technologies, AI is increasingly integrated into elder care systems, offering intelligent, efficient, and personalized service solutions by analyzing the lifestyles and health conditions of older adults. This integration aims to enhance older adults’ quality of life in aspects such as health monitoring and alerts, rehabilitation assistance, daily health management, and emotional support (Lee et al. 2023 ). A survey indicates that 83% of older adults prefer AI-driven solutions when selecting smart products, demonstrating the increasing acceptance of AI in elder care (Zhao and Li 2024 ). Integrating AI into elder care presents both opportunities and challenges, particularly in terms of user acceptance, trust, and long-term usage effects, which warrant further exploration (Mhlanga 2023 ). These studies will help better understand the profound impact of AI technology on the lifestyles of older adults and provide critical references for optimizing AI-driven elder care services.

The Time-zone evolution mapping and burst keyword analysis further reveal the evolutionary trends of research hotspots. Early studies focused on basic technology acceptance models and user perceptions, later expanding to include quality of life and health management. In recent years, research has increasingly focused on cutting-edge technologies such as virtual reality, telehealth, and human-robot interaction, with a concurrent emphasis on the user experience of older adults. This evolutionary process demonstrates a deepening shift from theoretical models to practical applications, underscoring the significant role of technology in enhancing the quality of life for older adults. Furthermore, the strategic coordinate mapping analysis clearly demonstrates the development and mutual influence of different research themes. High centrality and density in the themes of Usage Experience and Assisted Living Technology indicate their mature research status and significant impact on other themes. The themes of Smart Devices, Theoretical Models, and Mobile Health Applications demonstrate self-contained research trends. The themes of Human-Robot Interaction, Characteristics of the Elderly, and Research Methods are not yet mature, but they hold potential for development. Themes of Digital Healthcare Technology, Psychological Factors, and Socio-Cultural Factors are closely related to other themes, displaying core immaturity but significant potential.

In summary, the research hotspots in the field of older adults’ technology acceptance are diverse and dynamic, demonstrating the academic community’s profound understanding of how older adults interact with technology across various life contexts and needs. Under the influence of AI and big data, research should continue to focus on the application of emerging technologies among older adults, exploring in depth how they adapt to and effectively use these technologies. This not only enhances the quality of life and healthcare experiences for older adults but also drives ongoing innovation and development in this field.

Research agenda

Based on the above research findings, to further understand and promote technology acceptance and usage among older adults, we recommend future studies focus on refining theoretical models, exploring long-term usage, and assessing user experience in the following detailed aspects:

Refinement and validation of specific technology acceptance models for older adults: Future research should focus on developing and validating technology acceptance models based on individual characteristics, particularly considering variations in technology acceptance among older adults across different educational levels and cultural backgrounds. This includes factors such as age, gender, educational background, and cultural differences. Additionally, research should examine how well specific technologies, such as wearable devices and mobile health applications, meet the needs of older adults. Building on existing theoretical models, this research should integrate insights from multiple disciplines such as psychology, sociology, design, and engineering through interdisciplinary collaboration to create more accurate and comprehensive models, which should then be validated in relevant contexts.

Deepening the exploration of the relationship between long-term technology use and quality of life among older adults: The acceptance and use of technology by users is a complex and dynamic process (Seuwou et al. 2016 ). Existing research predominantly focuses on older adults’ initial acceptance or short-term use of new technologies; however, the impact of long-term use on their quality of life and health is more significant. Future research should focus on the evolution of older adults’ experiences and needs during long-term technology usage, and the enduring effects of technology on their social interactions, mental health, and life satisfaction. Through longitudinal studies and qualitative analysis, this research reveals the specific needs and challenges of older adults in long-term technology use, providing a basis for developing technologies and strategies that better meet their requirements. This understanding aids in comprehensively assessing the impact of technology on older adults’ quality of life and guiding the optimization and improvement of technological products.

Evaluating the Importance of User Experience in Research on Older Adults’ Technology Acceptance: Understanding the mechanisms of information technology acceptance and use is central to human-computer interaction research. Although technology acceptance models and user experience models differ in objectives, they share many potential intersections. Technology acceptance research focuses on structured prediction and assessment, while user experience research concentrates on interpreting design impacts and new frameworks. Integrating user experience to assess older adults’ acceptance of technology products and systems is crucial (Codfrey et al. 2022 ; Wang et al. 2019 ), particularly for older users, where specific product designs should emphasize practicality and usability (Fisk et al. 2020 ). Researchers need to explore innovative age-appropriate design methods to enhance older adults’ usage experience. This includes studying older users’ actual usage preferences and behaviors, optimizing user interfaces, and interaction designs. Integrating feedback from older adults to tailor products to their needs can further promote their acceptance and continued use of technology products.

Conclusions

This study conducted a systematic review of the literature on older adults’ technology acceptance over the past decade through bibliometric analysis, focusing on the distribution power, research power, knowledge base and theme progress, research hotspots, evolutionary trends, and quality distribution. Using a combination of quantitative and qualitative methods, this study has reached the following conclusions:

Technology acceptance among older adults has become a hot topic in the international academic community, involving the integration of knowledge across multiple disciplines, including Medical Informatics, Health Care Sciences Services, and Ergonomics. In terms of journals, “PSYCHOLOGY, EDUCATION, HEALTH” represents a leading field, with key publications including Computers in Human Behavior , Journal of Medical Internet Research , and International Journal of Human-Computer Interaction . These journals possess significant academic authority and extensive influence in the field.

Research on technology acceptance among older adults is particularly active in developed countries, with China and USA publishing significantly more than other nations. The Netherlands leads in high average citation rates, indicating the depth and impact of its research. Meanwhile, the UK stands out in terms of international collaboration. At the institutional level, City University of Hong Kong and The University of Hong Kong in China are in leading positions. Tilburg University in the Netherlands demonstrates exceptional research quality through its high average citation count. At the author level, Chen from China has the highest number of publications, while Peek from the Netherlands has the highest average citation count.

Co-citation analysis of references indicates that the knowledge base in this field is divided into three main categories: theoretical model deepening, emerging technology applications, and research methods and evaluation. Seminal literature focuses on four areas: specific technology use by older adults, expansion of theoretical models of technology acceptance, information technology adoption behavior, and research perspectives. Research themes have evolved from initial theoretical deepening and analysis of influencing factors to empirical studies on individual factors and emerging technologies.

Keyword analysis indicates that TAM and UTAUT are the most frequently occurring terms, while “assistive technology” and “virtual reality” are focal points with high frequency and centrality. Keyword clustering analysis reveals that research hotspots are concentrated on the influencing factors of technology adoption, human-robot interaction experiences, mobile health management, and technology for aging in place. Time-zone evolution mapping and burst keyword analysis have revealed the research evolution from preliminary exploration of influencing factors, to enhancements in quality of life and health management, and onto advanced technology applications and deepening of theoretical models. Furthermore, analysis of research quality distribution indicates that Usage Experience and Assisted Living Technology have become core topics, while Smart Devices, Theoretical Models, and Mobile Health Applications point towards future research directions.

Through this study, we have systematically reviewed the dynamics, core issues, and evolutionary trends in the field of older adults’ technology acceptance, constructing a comprehensive Knowledge Mapping of the domain and presenting a clear framework of existing research. This not only lays the foundation for subsequent theoretical discussions and innovative applications in the field but also provides an important reference for relevant scholars.

Limitations

To our knowledge, this is the first bibliometric analysis concerning technology acceptance among older adults, and we adhered strictly to bibliometric standards throughout our research. However, this study relies on the Web of Science Core Collection, and while its authority and breadth are widely recognized, this choice may have missed relevant literature published in other significant databases such as PubMed, Scopus, and Google Scholar, potentially overlooking some critical academic contributions. Moreover, given that our analysis was confined to literature in English, it may not reflect studies published in other languages, somewhat limiting the global representativeness of our data sample.

It is noteworthy that with the rapid development of AI technology, its increasingly widespread application in elderly care services is significantly transforming traditional care models. AI is profoundly altering the lifestyles of the elderly, from health monitoring and smart diagnostics to intelligent home systems and personalized care, significantly enhancing their quality of life and health care standards. The potential for AI technology within the elderly population is immense, and research in this area is rapidly expanding. However, due to the restrictive nature of the search terms used in this study, it did not fully cover research in this critical area, particularly in addressing key issues such as trust, privacy, and ethics.

Consequently, future research should not only expand data sources, incorporating multilingual and multidatabase literature, but also particularly focus on exploring older adults’ acceptance of AI technology and its applications, in order to construct a more comprehensive academic landscape of older adults’ technology acceptance, thereby enriching and extending the knowledge system and academic trends in this field.

Data availability

The datasets analyzed during the current study are available in the Dataverse repository: https://doi.org/10.7910/DVN/6K0GJH .

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This research was supported by the Social Science Foundation of Shaanxi Province in China (Grant No. 2023J014).

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Xianru Shang, Zijian Liu, Chen Gong, Zhigang Hu & Yuexuan Wu

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Shang, X., Liu, Z., Gong, C. et al. Knowledge mapping and evolution of research on older adults’ technology acceptance: a bibliometric study from 2013 to 2023. Humanit Soc Sci Commun 11 , 1115 (2024). https://doi.org/10.1057/s41599-024-03658-2

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