a framework used by business strategists to identify those factors operating in the ‘outer’ (macro) environment of a firm which impinge upon its activities and profitability in addition to factors affecting its immediate product MARKETS. PEST has four elements: political (e.g. the UK government's policy on joining the EURO-zone); economic (e.g. recession/boom conditions. See BUSINESS CYCLE); social (e.g. DEMOGRAPHIC CHANGES) and technological (e.g. the impact of the INTERNET). See BUSINESS STRATEGY.