What's the best way to identify growth drivers in an economic sector?

1 Define the sector

The first step is to define what you mean by an economic sector, and what are its main characteristics and components. An economic sector is a broad group of industries that share some common features, such as products, services, markets, technologies, or regulations. For example, the technology sector includes industries such as software, hardware, telecommunications, and internet services. You can use various sources, such as industry reports, trade associations, or government agencies, to find out how a sector is defined and classified, and what are its major segments and sub-sectors.

2 Identify the key indicators

The next step is to identify the key indicators that measure the growth and performance of a sector, and how they compare to other sectors and the overall economy. Some common indicators are revenue, profit, market share, employment, productivity, innovation, and investment. You can use various sources, such as financial statements, market research, or statistical databases, to find out the historical and current values of these indicators, and how they vary across industries and regions. You can also use tools such as charts, graphs, or ratios, to visualize and compare the data.

4 Evaluate the strengths and weaknesses

The fourth step is to evaluate the strengths and weaknesses of a sector, and how they relate to its growth drivers. Strengths are the advantages or assets that a sector has, such as a large customer base, a high level of innovation, or a strong competitive position. Weaknesses are the disadvantages or liabilities that a sector faces, such as a high level of competition, a low level of profitability, or a high level of risk. You can use various sources, such as SWOT analysis, Porter's five forces analysis, or PESTEL analysis, to assess the strengths and weaknesses of a sector, and how they affect its attractiveness and sustainability.

5 Identify the opportunities and threats

The fifth step is to identify the opportunities and threats that a sector encounters, and how they relate to its growth drivers. Opportunities are the favorable conditions or events that a sector can exploit or benefit from, such as a new market, a new technology, or a new regulation. Threats are the unfavorable conditions or events that a sector can face or suffer from, such as a new competitor, a new substitute, or a new crisis. You can use various sources, such as scenario analysis, gap analysis, or risk analysis, to identify the opportunities and threats for a sector, and how they affect its future prospects and performance.