What factors affect the business environment?

When we talk about the "business environment" we are
talking about a number of factors that affect all businesses in a certain country or
area of a country.  These factors tend to affect how easy it is for firms to operate and
make profit in that particular geographic area.

The factors
that affect the business environment are sometimes discussed using the acronym PEST
because there are political, economic, social, and technological factors that affect the
business environment.  I will give one example of
each.

• Political: the stability of the government
  in a country.  The business environment in Egypt is probably not great right now because
  no one knows what the government will look like in a
  month.


• Economic: the exchange rate of a country's
  currency affects all businesses that conduct any foreign
  trade.


• Social: the amount of education people have in a
  country or area.


• Technology: how advanced a country is in
  terms of its technology and ability to support that technology through (for example)
  infrastructure.