Business Skills for Engineers and Technologists

• Legislative structures of the EC, national and local government and how they are changing.

• Monopoly restrictions such as the Office of Fair Trading and the Monopolies Commission in the UK and similar structures in the EC commission and other countries and how they are interpreting events in a worldwide context as well as domestically.

• Political and government stability – not only extreme cases such as armed insurrection, but even in the UK a change of government may herald changes in legislation such as deregulation and privatization of state controlled industries, which affect businesses – as happened in Western Europe in the later decades of the twentieth century.

• Political orientations of governments’ attitude towards business, trade unions and the environment often drive tax and other economic policies.

• Pressure groups such as Friends of the Earth and the various consumer groups can influence not only buyers’ and investors’ attitudes, but also government policy. This affects matters such as the environment legislation and delays in the construction and other industries by public enquiries. Other examples include the fuel price escalator in the UK during the 1990s.

• Taxation and grant policies can change over a period. For example, the various UK and EC grant schemes and changes in policy on capital allowances for factory construction in areas of high unemployment.

• Employment legislation in areas such as equal opportunities, working time directive, etc.

• Foreign trade regulations both at home and in a country targeted for exports, for example many countries, have restrictions on the importation of certain goods to protect indigenous industries. This happens not just in the developing countries, but also in the developed countries, as can be seen from the regular meetings of GATT (General Agreement on Tariff and Trade) where discussions have been ongoing since 1947 without completely eradicating national tariffs and quotas.

• Business cycles: These are a natural rise and fall in demand for products which have been observed throughout history. They are caused by a complex mixture of factors and can be quite severe on occasions, i.e. the depression of the 1930s. Unfortunately these cycles vary considerably and are not easy to forecast. Governments have attempted to do so in the hope of controlling them, with limited success.

• Money supply: Reflects government action on government tax and spend policy and actions such as credit availability controls. The saving behaviour of individuals can affect the circulation of available money as can be seen in Japan where there is a high tendency towards saving when future trends look pessimistic.

• Inflation rates, i.e. the rate at which prices of products, services and wages change. This can affect people’s attitude to credit and savings and the ability of people on fixed incomes to have surplus money for spending. It can affect the flow of imports and exports as the exchange rates vary in relation to other countries.

• Investment levels: Ties in with business confidence about the future, perhaps based on an assumption regarding the stage of the business cycle. This cycle especially affects the construction and machine tool industries.

• GNP (Gross National Product), i.e. the value of the productive efforts of the nation as a whole.

• Pattern of ownership – especially trends in same. Examples include home computers, mobile phones and the growth in car ownership.

• Energy costs: Can affect the cost of making products. Also affects the consumer’s attitude towards various products and their functions. A good example is the drive for lower fuel consumption in cars following the oil price rises of the 1970s.

• Unemployment. Is a double-edged factor. Low unemployment means a healthy demand from consumers, but it also leads to a shortage in certain key skill areas which tends to drive up wage costs for these jobs.

• Demographics, i.e. the make-up of the population – the age groups, where they live, etc.

• Lifestyles: As well as fashion trends, this also looks at habits such as eating out, holiday preferences, central heating, etc.

• Education levels: This will determine the ability of staff to take on new ideas, equipment and processes. It will also affect job seekers’ expectations towards company policy and pay.

• Consumerism: This reflects the growing power of special interest groups towards policies. Consumer panels often advise the regulator on privatized industries regarding service delivered and allowed charges.

• Levels and focus of R&D expenditure within the industry and especially by your competitors.

• Speed of technology change in processes and products.

• Product life cycles.