Impact of Macroeconomic Transition on Equity Investing

You are tasked with evaluating the macroeconomic environment of a country transitioning from a manufacturing-based economy to one increasingly focused on technology and services. This transition is coupled with both domestic policy reforms aimed at stimulating innovation and international trade agreements that could either enhance or obstruct this shift.

Discuss the potential impacts of these macroeconomic factors on equity markets and explain how they can inform investment strategies for a pension fund that is trying to maximize returns while managing risk. Consider factors such as economic growth, interest rates, inflation, and employment in your analysis.