SWOT AND PESTLE ANALYSIS TECHNOLOGY SECTOR (United States of America) -By Aman Bhargav SWOT ANALYSIS SWOT stands for Strengths, Weaknesses, Opportunities and Threats and so the SWOT Analysis refers to the technique of analysing these 4 aspects of any business, sector, industry, economy etc. in order to get the better understanding of that particular subject. 1. Strengths of USA’s Technology sector. • In 2019, around 10% of the country’s GDP was contributed by the technology sector. • Many country’s universities are at forefront of advanced tech research and development. • Many U.S. companies have global reach leading to substantial foreign investments every year. 2. Weaknesses of USA’s Technology sector. • Due to involvement of millions of people, finding the right talent has been a major challenge. • Illegal practices with data by large tech companies and service providers have badly impacted the public trust. • Difficult to produce adequate human resource that can meet growing and highest demands. 3. Opportunities for Technology sector of US • Cloud Computing & Artificial Intelligence are the latest innovations by which the US companies can increase their global reach. • Due to the Boycott China movement at global level USA has major opportunity to increase the global contribution of itself. • Due to Covid-19 pandemic, medical technology and biotechnology are emerged as a new industry to invest in. 4. Threats for US’s Technology sector. • Developing countries like India, South Korea, Brazil etc. are emerging as major competitors. • The US-China trade war has threatened major tech companies regarding their sales to customers in China. • The lockdown due to Covid-19 pandemic has badly affected the economy of US. PESTEL ANALYSIS PESTEL stands for Political, Economical, Social, Technological, Environmental and Legal and the analysis of these aspects as an environments or external forces or factors which puts both positive as well as negative effects on the certain business, sector, industry, economy etc. in order to strategize accordingly for accomplishments of objectives. 1. Political factors affecting Technology sector of US • • • • Most of the time there is stable political climate which leads to better development. Trade deals with major countries leads to major development in the industry. Being the superpower the technology sector achieves better global reach. The political tensions between US & China leading to trade war has badly affect the technology sector. 2. Economic factors affecting US’s Technology sector • • • • The technology sector enjoys all the benefits of the stable economy of USA. Being the largest economy in world, investment and development in technology sector is good. Major investment in Biotechnology industry during Covid-19 pandemic. The coronavirus outbreak affects the economy badly leading to difficulty in recovery. 3. Social forces impacting Technology sector of USA • Entrepreneurial spirit among society helps in better development of the sector. • High education standards among society leads to provide better human resource. • Major data leak activities by tech companies has affected the public trust. 4. Technological forces impacting the Technology sector of USA • World’s largest technology region, i.e., Silicon Valley is in USA which helps in major development of technology sector. • Artificial Intelligence (AI) and Cloud Computing has emerged as a major upgrade in technology sector. • Moving towards Digitalisation is creating a new industry in the technology sector of USA. 5. Environmental factors impacting Technology sector of US • New sanctions by United Nations has increased the cost for technology sector. • Climate change is also a worrisome for the industry to perform. • New innovations for protecting environment leads to development of technology sector. 6. Legal forces affecting Technology sector of US • Ban on H-1B visas has affects the companies in finding better human resource across the globe. • Increase in import & export duties due to US-China trade war also affects the companies. • Anti - trust law in Technical & System Software Industry also leads to major changes in the technology sector. CONCLUSION • Most preferable country to invest in technology sector. • Some problems and challenges always be there but can be resolved. • Being the superpower, opportunities are high.
