A STEEP analysis is used to evaluate external factors that may impact your design decisions. STEEP is an acronym for: Social, Technological, Economical, Environmental and Political. While these are not concise categories (for example, economical and political factors are clearly related), thinking about them separately in relation to your design can help you understand and explain the context in which your design exists. Other known acronyms derived from STEEP are: PEST, PESTLE, PESTEL, STEP, STEPJE, STEEPLED and LEPEST.
A STEEP analysis is a tool used in speculative design futuring to prompt discussion and flesh out various societal factors in our future scenario. This tool is often used by business or organisations to consider a variety of external forces beyond our personal experiences and value systems.
The following elaborations are from issthinktank:
Social factors include the cultural aspects and include health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety. Trends in social factors affect the demand for a company’s products and how that company operates. For example, an aging population may imply a smaller and less-willing workforce (thus increasing the cost of labor). Furthermore, companies may change various management strategies to adapt to these social trends (such as recruiting older workers).
Technological factors include technological aspects such as R&D (Research and Development) activity, automation , technology incentives and the rate of change in technology. They can determine barriers of entry, minimum efficient production level and influence outsourcing decisions. Furthermore, technological shifts can affect costs, quality, and lead to innovation.
Environmental factors include ecological and environmental aspects such as weather, climate, and climate change which may especially affect industries such as tourism, farming, and insurance. Furthermore, growing awareness of the potential impacts of climate change is affecting how companies operate and the products they offer, both creating new markets and diminishing or destroying existing ones.
Economic factors include economic growth, interest rates, exchange rates and the inflation rate. These factors have major impacts on how businesses operate and make decisions. For example, interest rates affect a firm’s cost of capital and therefore to what extent a business grows and expands. Exchange rates affect the costs of exporting goods and the supply and price of imported goods in an economy.
Political factors are how and to what degree a government intervenes in the economy, this include areas such as tax policy, labour law, environmental law, trade restrictions, tarrifs, and political stability. Political factors may also include goods and services which the government wants to provide or be provided and those that the government does not want to be provided, also governments have great influence on the health, education, and infrastructure of a nation.