ACCA Applied Knowledge · Business and Technology

Social and demographic factors: formula sheet

Key formulas

Natural population change: Natural change = births − deaths; Positive means the population grows from natural causes; negative means it shrinks.
Net migration: Net migration = immigrants − emigrants; Positive means more people are arriving than leaving.
Total population change: Population change = (births − deaths) + (immigrants − emigrants); A country can grow through migration even if births are below deaths.
Dependency ratio: Dependency ratio = (young dependants + older dependants) ÷ working-age population × 100; Age bands vary by country (commonly under 15 and 65 and over, with working age 15 to 64). Use the bands given in the question.
PESTEL letters: P + E + S + T + E + L = Political, Economic, Social, Technological, Environmental, Legal; Social is the third factor. Do not confuse it with economic factors such as income levels, interest rates and inflation.
Social factor groups: Social = Demographic (measurable population facts) + Cultural (values, attitudes, lifestyle); Demographic examples: age structure, population size, birth rate, migration. Cultural examples: health awareness, attitudes to ethics, work-life balance.
Impact rule: Factor → Change → Effect on this business → Opportunity or threat; Use this chain for every point. A factor named without its effect earns little.

Demographics are measurable characteristics of a population, such as size, age, gender, income distribution and location.
An ageing population can raise demand for healthcare and leisure for older people, and can shrink the labour supply.
A rising birth rate can increase demand for baby products, education and housing over time.
Migration changes the size and make-up of the workforce and of the customer base.
Culture is the shared values, beliefs and customs of a group, and it shapes buying behaviour.
Social change can create new markets and make existing products unpopular.
Social responsibility means an organisation considers the effects of its actions on society, beyond making a profit.
Public attitudes can pressure organisations on ethics, the environment and treatment of workers.
In PESTEL, the S covers demographics, lifestyle, culture and social attitudes.
Always state the impact: demand, labour, cost or reputation.
Do not confuse social factors with economic ones: income levels are economic, while attitudes to saving or spending are social.

Treating demographic factors as the same as all social and cultural factors. Fix: Demographics are measurable population statistics. Attitudes, values and fashions are cultural factors.
Saying an ageing population always hurts business. Fix: Give both sides. Healthcare, leisure and care providers gain demand, while employers may lose young recruits.
Treating social and demographic factors as the same thing. Fix: Use the counting test. Measurable population data is demographic. Attitudes, values and lifestyles are social or cultural.
Listing a factor without saying how it affects the business. Fix: Always add a link: factor, then effect on demand, product, marketing or staff, then response.
Treating social responsibility as only charity donations. Fix: Remember CSR covers how the whole business operates: employment, products, supply chain and environment, not just giving money.
Confusing social factors with political or legal factors. Fix: If the scenario describes people's views or behaviour, it is social. If it describes a rule or government action, it is political or legal.
Classing income, unemployment or inflation as social factors. Fix: Money-based conditions of the whole economy are economic. Social covers who people are and what they value.
Listing factors without linking them to the business. Fix: Always finish with the effect: what happens to demand, costs, staff or reputation for the named business.

Always state the direction of the trend before the effect. Marks go to the link, not the label.
In scenario questions, name the age group and the product or job role affected.
Check whether a question asks about demand or labour supply. They need different answers.
For calculations, use the age bands in the question and show each step, even in number entry questions where only the final figure is entered.
Remember demographics belong in the Social part of PESTEL.
In Section A, first decide whether the item is social or demographic. Many wrong answers come from mixing these up.
In multiple response questions, read how many options to select and pick only that number, each linked to attitudes, values or lifestyles.
In Section B, structure each answer as factor, effect, response. This keeps answers short and covers what the examiner wants.