By Jan Burch
Updated August 23, 2018
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Understanding trends is a necessary part of any business forecasting activity. Trends are directional shifts or changes in a situation, which can be observed on a scale, ranging from very fine-grained to global in scope. The duration of a trend also affects its scale. Macro trends, as the name implies, are major in scope and long lasting. They affect the environment in which businesses operate, even if the business itself doesn’t seem related to the subject area of the trend.
Definition
Macro trends are directional shifts that involve large populations and last five to 10 years or more. Some examples might be the aging of a population, the development of global connectedness through social media, and the advances in technology as manifested in smart homes and the “Internet of things.”
Hierarchy of Trends
Macro trends don’t exist in a vacuum, but rather they arise out even broader, longer-lasting directional shifts known as mega trends. Macro trends, in turn, generate micro trends, which are smaller in scope and typically last three to five years. Then there are fads, which are even more ephemeral than trends and affect a smaller population, such as a defined age group.
A phenomenon can arise at one level of the hierarchy and expand or contract to encompass other levels. For example, when Facebook originated in 2004, it was shared among a small group of students in the Cambridge, Massachusetts area. With this small beginning, it may have been considered a fad, or at best a micro trend. Over time, the adoption of Facebook by a growing user base moved it to the level of a macro trend. Facebook, along with other social media platforms that have since developed, now propels the mega trend of global connectedness. This mega trend, in turn, produces such macro trends as crowd action, net culture and social software.
The Macro Environment
Every business lives within an environment of forces beyond its control. The DESTEP model describes these forces as Demographic, Economic, Political, Ecological, Socio-Cultural and Technological. For example, climate change is an ecological force, with worldwide implications that will undoubtedly last for decades, if not centuries. Within the umbrella of climate change, there are macro trends that operate on a smaller scale. Some operate regionally, such as the increased risk of flooding in coastal areas, or forest fires in mountainous regions. Other related trends might operate within a business sector, such as raw materials scarcity or interruption of delivery schedules due to severe weather events.
These climate-related challenges are also accompanied by emerging macro trends that create opportunities. Some examples are the rise of ethical business models, the trend towards ethical consumption and the growing consumer preference for renewable energy sources. While a business alone may not be able to alter macro-environmental forces, understanding and responding effectively to these large-scale directional shifts will help businesses survive and even thrive, despite the challenging nature of the macro trend.
FAQs
Macro trends refer to the broader economic and market conditions, such as GDP growth, interest rates, inflation, consumer spending, and industry trends. By analyzing macro trends, businesses can anticipate potential changes in demand, competition, and pricing.
What is a macro trend? ›
A macrotrend is a pervasive and persistent shift in the direction of some phenomenon on a global level. Examples of current macrotrends include urbanization, automation and changing Demographics.
What is a macroeconomic trend? ›
Macroeconomic trends are the big-picture forces that shape the economy. They can have a significant impact on businesses, both positive and negative. That's why it's so important for businesses to understand macroeconomic trends and how they will affect their industry and target market.
What is macro trends description? ›
Microtrends are cycles of short-lived trends that gain a high amount of attention in a fairly short period outside of traditional trend cycles, and then fall off the grid and lose public relevance almost just as quickly.
How do you identify a macro trend? ›
The construction of a macro trend indicator typically relies on three complementary sources of information: economic data, financial market data, and expert judgment.
How long is a macro trend? ›
Macrotrends are long-term shifts lasting months, years or even at times decades and affect economics at the highest level, nationally or internationally.
What is an example of a macro trend in fashion? ›
Macro trends are based around a shift in consumer behaviour and are extremely influential for all brands and market levels. For example, a huge macro trend throughout 2020-2021 was loungewear due to the implications of Covid-19 and the increased number of people inside their homes.
What is macroeconomics in simple words? ›
Macroeconomics is the branch of economics that deals with the structure, performance, behavior, and decision-making of the whole, or aggregate, economy. The two main areas of macroeconomic research are long-term economic growth and shorter-term business cycles.
What are the current macroeconomic trends? ›
Rising interest rates and the war in Ukraine continue to weigh on economic activity. China's recent reopening has paved the way for a faster-than-expected recovery. Global inflation is expected to fall to 6.6 percent in 2023 and 4.3 percent in 2024, still above pre-pandemic levels.
What is a microeconomic trend? ›
Definition & Citations:
Consumer, household, or firms' income, savings, debt, and expenditure as economic factors in the patterns of movements or changes.
Sociologists who use macro-level analysis look at trends among and between institutions and societies and it emphasizes the influence of structures, institutions, and systems. The aspects of the society that are larger scale and exist over extended periods of time (Collins 1981).
Is AI a macro trend? ›
The macro-trends of AI, flexible work, and wellbeing come together in an enabling cultural movement – the personalized employee experience.
What are the macro trends in the workforce? ›
Three of the most significant macro trends that are currently influencing the labor market are aging populations, infrastructure development and retrofitting, and the need for content development and management. Aging populations are a major concern for businesses, as people are living longer and working longer.
What is a macro trend and examples? ›
Macro trends refer to major shifts in consumer behaviour that will direct the business landscape in the long term. They have a cross-industry impact and evolve over time. Examples of previous global macro trends include the adoption of social media or catering to the ageing population.
What is the macro environment trend? ›
In general, the macro environment includes trends in the gross domestic product (GDP), inflation, employment, spending, and monetary and fiscal policy. The macro-environment is closely linked to the general business cycle as opposed to the performance of an individual business sector.
How do you find a macro? ›
Here's how you can find macros and VBA modules in your document: In Word or Excel, click View > Macro > View Macros. In PowerPoint, click View > Macro.
What are macro trends in sustainability? ›
Accordingly, macro trends can be perceived as “concrete variations of a mega trend” [18]. There are six sustainability-oriented macro trends within the sustainability megatrend: (1) Agricultural Innovation, (2) Circular Economy, (3) Clean Tech, (4) Energy Harvesting, (5) Ethical Consumption, and (6) Zero Waste [6].
What are macro and micro trends in design? ›
Macro trends represent long-term global trends that impact on various areas of society, such as interior design. On the other hand, micro-trends emerge from these macro-trends, characterised as smaller-scale trends that gain popularity over a short period of time.
