Project Finance for Business Development

CHAPTER 15Trends Impacting Project FinanceOpportunities and Threats

In the new business development discipline, megatrends and subtrends are of crucial importance because of their potential effects on business strategy and the success of projects. Even though one has no control over them, how a business gets ahead of and adapts to them makes a difference. Hence, analysis of megatrends and their implications are a vital element of a sponsor company's strategic, financing, and business plans. What is more important than knowing which ones impact a business is what one does with that information to take advantage or avoid megatrends. Once their impacts are well understood by all stakeholders, they are used in decision making across all sponsor company organizations and in enhancing stakeholder cooperation.

Figure 15.1 shows trend components and illustrates that the assessment of trends first involves identification, then analysis of megatrends, subtrends, and PESTLED trend effects. To be of value, it also involves trend response planning. The term megatrend was popularized by John Naisbitt (1982), defined megatrends as global, broad impact, sustained forces of change that affect industries, economies, societies and cultures, and peoples' lives. The effects of megatrends are permanent and shape the business environment, competition, and the future of the world. Subtends on the other hand, are prevailing tendencies, movements, or progressions within or outside megatrends that persist ...