Globalization Chapter 2, Sec 4 Social Studies
What is Globalization? The process by which PEOPLE, THEIR IDEAS and THEIR ACTIVITIES in DIFFERENT PARTS OF THE WORLD become INTERCONNECTED or INTEGRATED Globalization as a term is new but the Process is not … It shows how the world has “shrunk” and how people, goods and information can be moved easily around the world
Important to Note… So, if you are asked to assess HOW EFFECTIVE globalisation has been… you have to ask yourself HOW MUCH INTERCONNECTION AND INTEGRATION HAS TAKEN PLACE BETWEEN PEOPLE, THEIR IDEAS and THEIR ACTIVITIES in DIFFERENT PARTS OF THE WORLD
Examples of Globalization The Internet Selling local products (e. g. OCK Curry Puff) in the global market (e. g. Malaysia, China, Indonesia, etc) Attending lectures by a British professor teaching in an American University via a web-conference in NUS
Examples of Globalization People in different parts of the world: Wearing Made in China clothes Driving Made in Japan cars Sipping Australian Wine while watching the LIVE telecast of a soccer match in Germany
Pizza 12 What do you think is the message of this video? Is there a more serious issue behind the spoof? How much globalization goes into our pizzas? http: //www. youtube. com/watch? v=y. QE 4 j 5 Mxr 1 M
Key Driving Forces of Globalization 1) Developments in transportation and communications Enables globalization by encouraging it: Transport systems are the means by which people, products and materials are transferred from one place to another Communication systems are the means by which information is transmitted from place to place in the form of ideas, instructions and images
Key Driving Forces of Globalization 1) Developments in transportation and communications Transportation Improvements in transport technology has “shrunk” the world 19 th century steam engine 20 th century jet engine, large ocean-going vessels move people Containerisation moves goods fast and cheap over long distances (ships trucks)
Key Driving Forces of Globalization 1) Developments in transportation and communications Transportation Increasing mobility of goods and people Countries have built efficient and integrated transportation infrastructure (e. g. airports, seaports, railways, highways to facilitate movement)
Key Driving Forces of Globalization 1) Developments in transportation and communications Communications Faster and more convenient communication People all over the globe can communicate via telephone, e-mail, fax, video conferencing, etc Satellite technology allows for simultaneous communication Optical fibre systems can transmit large amounts of information and very high speeds
Key Driving Forces of Globalization 1) Developments in transportation and communications Communications Internet has enabled consumers to access information instantly, conveniently and efficiently Internet has transferred the way people communicate, do business, obtain information and purchase goods and services
Key Driving Forces of Globalization 1) Developments in transportation and communications Communications Transnational Companies can operate as information from the head office can be easily and effectively transmitted to every branch office anywhere in the world
Key Driving Forces of Globalization 2) Transnational Companies Large global firms that operate in a number of countries and have production and service facilities outside the country of their origin Example: Microsoft, Toyota
Key Driving Forces of Globalization 2) Transnational Companies TNCs set up operations in different parts of the world because: Sourcing for new markets Lowering cost of production Production of different parts for products and assembly done in a variety of countries
Impact of Globalization 1) Economic Impact Improvements in Standards of Living Increased Competitions among Nations Investment and Market Talent Widening Income Gap between the Rich and Poor
Impact of Globalization 2) Social Impact Increased Awareness of Foreign Culture Loss of Local Culture
Impact of Globalization 3) Economic Impact Environmental Degradation Deforestation and Related Problems Global Warming Environmental Management
Impact of Globalization Economic Social Environmental Good Effects - Improvement in Standard of Living - Competition Among Nations (Investment & Market) Good Effects - Increased Awareness - Environmental of Foreign Culture Management Bad Effects -Competition Among Nations (Talent) - Widening Income Gap between the Rich and the Poor Bad Effects - Loss of Local Culture Bad Effects - Global Warming - Deforestation and Related Problems
Impact of Globalization 1) Economic Impact Improvements in Standards of Living As countries trade and open their doors to foreign investment, they earn more revenue • As a result, their citizens benefit from a higher standard of living • Free trade allows for a larger variety of foreign goods for the consumer to choose from • Better quality of life
Impact of Globalization 1) Economic Impact Increased Competition Among Nations Investment and Market • • • Globalisation means more competition as TNCs source for the cheapest places to lower their cost of production Governments have to compete with each other to attract these foreign corporations to invest When China opened its doors to foreign investment in the 1970 s, industrial cities like Suzhou, Wuxi and Dalian were formed
Case Studies Dalian Industrial Park (China) Tanjung Pelepas Port (Malaysia) Don Muang Airport (Thailand)
Dalian (Northern China) Well-developed infrastructure to support industrial growth Seaport handles high passenger and container cargo volumes Airport handles more than 88 routes More than 10 banks and financial institutions Renowned financial institutions
Dalian (Northern China) Foreign manufacturing companies enjoy lower taxation rates Hi-Tech Industrial Park which encourages R&D in IT Rapid growth stems from all these initiatives
Tanjung Pelepas Port (M’sia) Rival port along the Straits of Malacca World’s biggest container shipping line, Maersk (Denmark) shifted its business from Pasir Panjang CT in Singapore to Tajung Pelepas Tanjung Pelepas intends to compete with Singapore and move into the forefront of the transshipment business in SE Asia The draw of Tanjung Pelapas its is cheaper rates and flexible operations
Don Muang Airport (Bangkok) Surging traffic put Bangkok’s Don Muang Airport as 12 th busiest compared to Hong Kong (14 th) and Singapore (24 th)
Impact of Globalization 1) Economic Impact Increased Competition Among Nations Investment and Market • • • Competition for markets and investment is intense Countries that are better able to offer incentives to investors will be more successful in attracting investment and markets This results in further growth for the country when infrastructure is more developed
Impact of Globalization 1) Economic Impact Increased Competition Among Nations Talent • • • Highly skilled people are in high demand all over the globe Globalisation allows people to move freely from one country to another in search of employment Advanced economies with stable or shrinking populations seek new talent pools Emerging economies seek back their best and brightest E. g. India’s Brain Drain (e. g. Computer)
Impact of Globalization 1) Economic Impact Widening Income Gap Between the Rich and the Poor Due to rapid development in many countries and the spread of poverty in others Developed countries experience rapid income growth as they own most of the manufacturing activities
Impact of Globalization 1) Economic Impact Widening Income Gap Between the Rich and the Poor These developed countries and their TNCs are able to attract investments, skilled labour and resources away from poor areas International trade has generated much revenue for them
Impact of Globalization 1) Economic Impact Widening Income Gap Between the Rich and the Poor However, Developing Countries face trade restrictions put up by Developed Countries They are not capable of manufacturing better quality goods that fetch higher prices Poorer nations are only attractive for labourintensive and low-cost ventures
Impact of Globalization 1) Economic Impact Widening Income Gap Between the Rich and the Poor The rich developed countries prosper with better opportunities while the poor developing countries face economic uncertainties like retrenchment Widening income gap can lead to social problems, increasing tension between the rich and the poor
Impact of Globalization 2) Social Impact Increased Awareness of Foreign Culture Travel, the Internet, mass media (products of globalisation allow you to learn more about foreign culture Loss of Local Culture Global (Western) brands dominate consumer markets in developing countries Creation of homogenous culture across the world Spread of pop culture and erosion or loss of local culture Negative influence of youth Enforced beliefs
Impact of Globalization 3) Environmental Impact Depletion of natural resources by TNCs Concern over profits vs. protection of the environment Lack of funds to implement environmental protection Environmental Degradation Deforestation and Related Problems Global Warming Environmental Management
Impact of Globalization 3) Environmental Impact Environmental Degradation Deforestation and Related Problems • • Rainforests cut to make way for development Rainforests cut down for industries, agriculture, housing, forestry, cattle ranches Planting of cash crops Projects to achieve higher level of economic development Global Warming Environmental Management
Impact of Globalization 3) Environmental Impact Environmental Degradation Deforestation and Related Problems • • • Soil erosion, extinction of flora and fauna, flooding and haze Loss in tourism (haze) Water pollution Global Warming Environmental Management
Impact of Globalization 3) Environmental Impact Environmental Degradation Global Warming • • Large amount of greenhouse gases produced by increased usage of airplanes and ships Factories and transportation also emit greenhouse gases, contributing to the increase in world average temperature. Environmental Management • • • Greater awareness Sustainable development is the key to further growth Source for alternative energy
Singapore’s Strategies Challenges faced by Singapore: Economic Slowdown by other countries Transnational Terrorism Disease Outbreak Challenges Rise of India and China as competitors Ageing Population Maturing Domestic Economy
Strategies to Maximise Opportunities and Overcome Challenges Diversifying the Economy Technology-Intensive, High Value-Added Manufacturing Life Sciences Regional Hub for Services (Education) Tourism (Integrated Resorts)
Strategies to Maximise Opportunities and Overcome Challenges Diversifying the Economy Technology-Intensive, High Value-Added Manufacturing • Life Sciences – Genetics, new medical treatments – Gene therapy, new drugs, genetically modified food products – Setting up of supporting institutions like A*Star IMCB (Institute of Molecular and Cell Biology) – Help and support biomedical R&D capabilities
Strategies to Maximise Opportunities and Overcome Challenges Diversifying the Economy Technology-Intensive, High Value-Added Manufacturing • Apart from encouraging R&D, Singapore continues to attract TNCs to set up their high value-added manufacturing activities – E. g. Seagate (Generate jobs, affirms Singapore’s position as a manufacturing hub)
Strategies to Maximise Opportunities and Overcome Challenges Diversifying the Economy Regional Hub for Services (Education) • Complementing local universities, leading international universities have set up branches in Singapore – U Penn’s Wharton School of Business, Chicago Graduate School of Business, Shanghai Jiao Tong University – Strong university sector which attracts talent
Strategies to Maximise Opportunities and Overcome Challenges Diversifying the Economy Regional Hub for Services (Tourism) • Generate economic growth – Two Integrated Resorts (IRs) will be built in Marina Bay and Sentosa – Stiff competition from other countries as tourist destinations – Singapore cannot offer natural tourist attractions and so must offer innovative man-made attractions to attract tourists – Investment of capital by investors Jobs and economic growth
Strategies to Maximise Opportunities and Overcome Challenges Nurturing the Growth of Small and Medium Enterprises (SMEs) Venturing Abroad Expanding Market Reach Through Economic Co-operation
Strategies to Maximise Opportunities and Overcome Challenges Nurturing the Growth of Small and Medium Enterprises (SMEs) Provide jobs Support operations of TNCs by supplying them with components (e. g. supplying thread, buttons to a garment factory) Enhance the attractiveness of Singapore as a regional manufacturing and services hub
Strategies to Maximise Opportunities and Overcome Challenges Nurturing the Growth of Small and Medium Enterprises (SMEs) Problems faced by SMEs • Unable to compete with big corporations due to a lack of resources (e. g. small furniture shop vs. IKEA) • Lack expertise in using advanced technology • Family-run business Shortage of skilled personnel • Small domestic market
Strategies to Maximise Opportunities and Overcome Challenges Nurturing the Growth of Small and Medium Enterprises (SMEs) Helping SMEs • Loan schemes from banks • Association of Small and Medium Enterprises (ASME) set up to provide enterprises with help • Training, regular seminars and workshops • Tax exemption for new companies
Strategies to Maximise Opportunities and Overcome Challenges Nurturing the Growth of Small and Medium Enterprises (SMEs) Problems faced by SMEs • Unable to compete with big corporations due to a lack of resources (e. g. small furniture shop vs. IKEA) • Lack expertise in using advanced technology • Family-run business Shortage of skilled personnel • Small domestic market
Strategies to Maximise Opportunities and Overcome Challenges Venturing Abroad Due to limited resources, Singapore has to look overseas to achieve further growth • Regionalisation Investing in countries with land, labour and new markets – Allows Singapore and the host country to grow and promotes development in the region – China (Suzhou) – India (Karnataka) • Spread investment across the world allows for Singapore’s growth to be maintained even if markets and investment opportunities in one country / region is weakened
Why Karnataka? Strategic Location Karnataka Supportive Government Encourages Foreign Investment and Supports Businesses Near Mumbai, Chennai and New Delhi Skilled Manpower Skilled IT Professionals
Strategies to Maximise Opportunities and Overcome Challenges Expanding Market Reach Through Economic Co-operation Due to our small population, we have a small domestic market Economic and trade ties must be established with other countries to enable local companies to sell their goods to overseas markets • Sign Free Trade Agreements (FTAs)
Strategies to Maximise Opportunities and Overcome Challenges Expanding Market Reach Through Economic Co-operation Benefits of FTAs: • Enjoy more choice in goods and services • Standards will improve with increased foreign competition • Singapore companies can sell their goods overseas and increase their profits • Local companies find it easier to venture abroad
Strategies to Maximise Opportunities and Overcome Challenges Expanding Market Reach Through Economic Co-operation Establishment of Special Economic Zones (SEZs) • A geographical region in a country where there are less stringent economic laws • Zones of rapid economic growth by using tax incentives to attract foreign investment
Strategies to Maximise Opportunities and Overcome Challenges Managing Resources Efficiently Developing People Attracting Foreign Talent Managing the Environment • Managing Limited Land Resources • Co-operation with Regional and International Organisations • Public Education
Strategies to Maximise Opportunities and Overcome Challenges Managing Resources Efficiently Developing People • Promoting Local Entrepreneurship and Technopreneurship – With globalisation, business competition will increase – Singapore needs more local entrepreneurs to take risks and come up with products to compete with global competitors
Strategies to Maximise Opportunities and Overcome Challenges Managing Resources Efficiently Developing People • Promoting Local Entrepreneurship and Technopreneurship – Amending bankruptcy laws to allow failed entrepreneurs to start again – Recognising outstanding entrepreneurs
Strategies to Maximise Opportunities and Overcome Challenges Managing Resources Efficiently Developing People • Promoting Continuous Learning among the Workforce – Globalisation will render some jobs obsolete – Singapore Workforce Development Agency (WDA) established to ensure workforce remains competitive – Skills Upgrading (Employability Skills Systems – ESS) – Equip workers with skills to cope with new demands and job environments – Skills Development Fund (SDF) – financial assistance to employers to encourage training and skills upgrading
Strategies to Maximise Opportunities and Overcome Challenges Managing Resources Efficiently Attracting Foreign Talent • Declining birth rate and requires new skills in a knowledge-based economy – Need to attract foreign talent to meet manpower needs – Foreign Talent also brings in foreign business investment potential – Create more business opportunities More Jobs – Adds diversity to our cultural landscape and makes us cosmospolitan – Foreign Talent with specialised skills
Three Pillars of Sustainable Development Environmental Preservation Economic Development Social Progress
Strategies to Maximise Opportunities and Overcome Challenges Managing the Environment • Managing Limited Land Resources – Singapore is small (680 km 2) so land planning is important to maximise land use – Challenging not all land can be developed – Land use planning must ensure that high-standard facilities for housing, transportation, recreation, commerce, defence and education must be built to ensure sustainable growth
Strategies to Maximise Opportunities and Overcome Challenges Managing the Environment • Managing Limited Land Resources – Preservation of nature sites – Singaporeans can enjoy natural environment – Waste Disposal – Current facilities on Pulau Semakau landfill will last up to 2030 – Need to prolong lifespan while sourcing for alternatives – Infrastructure includes waste disposal plants at Tuas, Ulu Pandan, Tuas South and Senoko
Strategies to Maximise Opportunities and Overcome Challenges Managing the Environment • Co-operation with Regional and International Organisations – Co-operating with ASEAN to solve the haze issue – Helping Indonesia detect forest fires with satellite imaging – Hosting ASEAN Ministerial Meeting on Haze – Globally, Singapore signed agreements to restrict the use of harmful ozone depleting substances – Phased out the use of chlorofluorocarbons (CFCs)
Strategies to Maximise Opportunities and Overcome Challenges Managing the Environment • Public Education – For effective long-run environmental protection, Singaporeans must adopt environmentally-friendly ways and be instilled with a sense of responsibility and personal interest to keep their surroundings clean – Education in schools and for the general public – Recycling and waste minimisation – Clean and Green Week – Bring Your Own Bag Day
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