You are on page 1of 7

Social Studies: Globalisation

Globalisation is defined as the process by which people, their ideas and activities in different
parts of the world become interconnected or integrated.
Key driving forces of globalisationDevelopments in transportation, Developments in
communication and Transnational Corporations (TNCs).
-Developments in Transport
Transport systems are the means by which people, materials and products are transferred from
one place to another. With the increasing mobility of goods and people, it is important to have an
efficient transport network worldwide, which includes airports, seaports, railways and highways
to make it possible for goods to be moved around easily. As a result, developments in
transportation technology have been a key driving force of globalisation because the new
developments in transport technology like airplanes and containerisation have shrunk
the world in terms of time taken to get from one place to another making it easier and
possible for goods to be moved around the world easily, enhancing the process by which
people, their ideas and their activities become interconnected or integrated.
-Development in Communication
Improvement in technology has made communications among people in different locations faster
and more convenient. Telephones, e-mail, satellite technology and optical fibre systems allow
information to be relayed from one end of the world to the other at a very high speed.Because
of this, consumers are able to access information conveniently and effectively, allowing
their ideas and their activities become interconnected and integrated, which is what
globalisation is about.Furthermore, advances in communication technology allows TNCs
to coordinate and control their worldwide activities easily and more efficiently, allowing
more people, their ideas and their activities to become even more integrated and
interconnected.
-Transnational Corporations (TNCs)
TNCs drive globalisation by setting up operations in a number of countries outside their home
country. This is done so as to source for new markets, lower the cost of producing their goods or
to source for components before assembling their products in another country. This has led to
economics becoming more integrated as people and their activities become
interconnected with TNCs setting up companies in other parts of the world and linking
them to the parent company at home.

Analysis of driving forces of Globalisation


Developments in TransportImportant in linking people, materials and products from one
place to another. However, it only drives people, materials and products so there is still reliance
on developments in communication to further drive globalisation.
Developments in CommunicationMost effective driving force of globalisation because
developments in communication have made it so advanced that information which is necessary
for people, their ideas and activities to become integrated and interconnected is transmitted
almost immediately, allowing for the globalisation process to take place effectively.
Transnational CorporationsImportant in linking people, their ideas and their activities
globally but needs developments in transport and communications in order to be successfully
carried out.

Impacts of globalisation
-Economic
Improvement in standard of living
Increased competition nations
Talent
Widening Income Gap between the rich and poor
-Social
Increased awareness of foreign culture
Loss of local culture
-Environmental
Environmental Degradation
Global Warming
Environmental Management

Economic Impact
Improvements in standard of living
Globalising countries have enjoyed an increase in income levels because when they open their
countries to trade and foreign investments, the countries earn revenue. The revenue earned by
the government allows it to provide better standards of education, healthcare, defence, housing
and transportation. As a result, citizens in these countries benefit from better standards of living.
Free trade also allows consumers to purchase a wide variety of goods. The increase in lifestyle
choices leads to a better quality of life.
Increased competition among countries
Globalisation also leads to countries facing more intense competition. In order to lower their
costs of production, TNCs seek out the cheapest locations and as a result, governments
compete with one another to attract these TNCs to invest in their countries.Usually countries that
are able to offer incentives to foreign investors like better infrastructure will be more successful in
attracting foreign investments which will result them in economic growth.However, poorer
countries that do not have good infrastructure and political instability are unable to attract
investors and as a result remain trapped in the poverty cycle.
Talent
Due to Globalisation, people are able to move from country to country in search of leisure
activities and employment. Globalisation has therefore presented talent with the opportunity to
find employment and better prospects in another country. However, the increase of worker
mobility may lead to brain drains in countries which cannot offer their talents the better prospects
overseas countries may offer. This would restrict the economic growth and development of the
country experiencing brain drain.

Widening income gap between the rich and the poor


As globalisation has resulted in rapid development in many countries but has also contributed to
the spread of poverty in many countries, resulting in a widening income gap between rich and
poor countries. Developed countries usually own many manufacturing activities and earn
revenue from them. TNCs are usually from developed countries are able to draw investments,
talent and resources away from poorer areas and relocate them to regions that benefit them.
International trade also generates a lot of revenue for developed countries. However, developing
countries often face trade restrictions put up by developed countries. Globalisation has also led
to a widening income gap within developed countries where the rich get richer while the poor
and lowly-skilled get poorer or face economic uncertainties such as retrenchment. This may lead
to potential social tension between the rich and the poor.

Social Impact
Increased awareness of foreign culture
Due to globalisation, people have become aware of different cultures which allow for them to
gain more knowledge about the history, culture and way of life of different people.
Loss of Local Culture
Globalisation also causes a loss of local culture when global brands start to dominate the
consumer market in developing countries as they are identical in appearance and create a
largely homogenous culture across the world. Pop culture from the west has also been spread
by globalisation and have to some extent been a negative influence on youth as they lose
interest in local culture and traditions.

Environmental Impact
Environmental Degradation
When TNCs set up factories in different parts of the world, many of them use natural resources
such as timber,oil and metals at a rapid rate. As a result the natural environment suffers because
developing countries lack the resources to implement and enforce environmental regulations.
Deforestation and related problems
One such problem of environmental degradation is deforestation as rainforests have been cut
down in many countries to make way for the development of industries, agriculture, housing and
transportation. Rainforests are usually sacrificed because it is sometimes more profitable to use
the land for other purposes. When these forests are cleared, many environmental problems such
as soil erosion, the extinction of flora and fauna an increase in flooding and the haze occur.
These problems can cause a loss of life, economic losses and loss of revenue for tourism.
Pollution is also a major problem as well.
Global Warming
Rapid Globalisation has produced large amounts of greenhouse gases through increased
emissions by airplanes, ships, vehicles and factories which has led to the rise in average global
temperatures. This has led to worsened environmental problems as the rise in average global
temperatures has led to catastrophic weather conditions like floods,landslides or has affected
food production due to droughts and famines.

Environmental Management
Due to negative effects of globalisation, there has also bee an increase in awareness of
environmental management as countries are aware that sustainable development is a key to
further growth. If the environment is well preserved, future generations will be able to use the
resources to generate income. In order to do this, sustainable energy is needed. Environmental
management has thus generated alternative energy resources such as solar and geothermal
power.

Economic
Good effectsImprovement in standard of living, Competition among nations for investments
Bad effectsCompetition for talents,Widening the income gap between rich and poor

Social
Good effectsIncreased awareness of foreign culture
Bad effectsLoss of local culture

Environmental
Good effectsEnvironmental Management
Bad effectsGlobal warming,Deforestation

Strategies to maximise opportunities and overcome challenges. (Singapore)


Problems faced by singapore:
-Economic Slowdown in other countries
-Disease outbreaks such as SARS
-Rise of china and India as competitors
-Transnational terrorism
-Ageing population
-Maturing domestic economy
Strategy #1: Diversifying the Economy
In order to ensue that singapore is able to maximise its opportunity and overcome challenges
like a maturing domestic economy and to remain competitive enough to attract foreign investors,
Singapore diversified its economy and aims to be a centre for technology-intensive, high value
added manufacturing activities such as chemical engineering and pharmaceuticals. It has also
built up its research and development capabilities. This not only attracts talents in these fields
who take advantage of singapore but brings in TNCs who set up high value added
manufacturing activities here.This not only generated jobs but also affirms singapores
position as a manufacturing hub which in turn generates more economic growth when
more TNCs are attracted to set up manufacturing activities in singapore.

At the same time, singapore also aims to be the regional hub for education and tourism. By
attracting prestigious universities to set up regional campuses here, thereby creating a strong
university sector that will attract foreign talent that will contribute towards economic growth. As
singapore faces stiff competition from other neighbouring countries as a tourist destination, it
developed other attractions such as the Integrated Resorts so as to strengthen singapores
position as a choice destination in Southeast Asia and generate economic benefits. By
developing various sectors of the economy will help reduce Singapores dependency on a
single industry or market. Should any sector of the economy slow down, the other
sectors can continue to generate revenue.

Strategy #2 :Nurturing growth of small and medium enterprises (SMEs)


SMEs are important providers of jobs as they make up a large percentage of businesses in the
singapore economy. They also support the operations of TNCs by supplying them with
components in the manufacturing process. As such, they enhance the attractiveness of
singapore as a regional manufacturing and services hub.
However, SMEs are sometimes unsuccessful as they face problems like being unable to
compete with larger corporations which have more resources. They sometimes lack expertise in
using advanced technology to bring their operations up-to-date which will hinder productivity and
lessen their competitiveness. Some SMEs which are family-run have a shortage of skilled
professionals to manage the company. They also face a small domestic market as many of them
lack the capital to venture into overseas markets. (This portion deals with negative effects of
this factor can be used when evaluating the effectiveness of this strategy)
To allow SMEs to actively contribute to Singapores growth, there are many schemes in place to
assist them. Banks have various loan schemes to cater to the needs of SMEs and the
association of small and medium enterprises was set up to provide assistance to SMEs in the
form of training and seminars to help them enhance their capacity. The government has also
given new SMEs tax exemptions to help them cope. By nurturing the growth of SMEs, the
economy can grow, jobs will be created and singapore will be able to compete with the
economies of other countries.

Strategy #3 : Venturing Abroad


With limited land and labour resources, Singapore has to venture abroad to achieve further
growth. Singapore does this through regionalisation where it invests in nearby countries that
have land, lower labour costs and new markets. Singapore provides the expertise and capital to
develop projects like industrial parks in host countries while the host countries provide land and
labour. This benefits both countries as it generates economic growth for them and the
asian region as a whole.
In order to generate economic growth, Singapore also invests in and expands into overseas
markets, which ensures long-term growth for singapore. New markets are sourced out and
investments made. The spread of investments across the world is to ensure that
singapores economic growth is maintained even if the markets and investment
opportunities in one particular region or country are weakened.

As a result of singapore companies venturing abroad, many singaporeans are also relocating
overseas or studying in universities abroad. There is a concern that they may feel less rooted or
attached to singapore. (This portion deals with negative effects of this factor can be
used when evaluating the effectiveness of this strategy)

Strategy #4 : Expanding market reach through economic co-operation


In order to cope with a small domestic market and a maturing domestic economy, singapore
needs to establish trade ties with countries around the world to enable local companies to sell
their goods to a larger market. One method is through the signing of Free Trade Agreements
which bring about closer economic collaboration. This benefits singapore through the availability
of more goods and services, higher service standards through increased foreign competition,
cost savings when taxes are removed, new markets and it will be easier for local companies to
venture abroad. This will ensure economic growth for singapore as local companies who
profit from the economic co-operation can expand, create jobs and generate growth for
the economy.

Singapore also cooperates with other countries by setting up Special Economic Zones (SEZs)
where a geographical region in a country is set aside. There are less strict economic laws and
the zone is intended to function as zones of rapid economic growth by using tax and business
incentives to attract foreign investment. Economic growth will be achieved because the flow
of goods between countries will be smoother and easy investment opportunities for
businessmen would mean more singapore companies will be able to benefit from
simplified procedures for work permits and visas. They can also benefit from the help
given by the local authorities in dealing with licenses and documentation. All these
initiatives will allow singapore to generate economic growth.

Strategy #5 : Managing Resources Efficiently Developing People


Promoting local entrepreneurship and technopreneurship - As singapore has a small population,
it is important to develop its people. One way is through promoting local entrepreneurship and
technopreneurship so as to allow them to meet the demands of business competition locally and
overseas. By developing more local entrepreneurs who are willing to take risks and develop new
products, they will be able to generate economic growth and compete with foreign
companies.
Entrepreneurship is promoted through schemes like amending the bankruptcy laws to allow
failed entrepreneurs to start businesses again. Local entrepreneurs are also recognised for
being outstanding to inspire others to achieve greater success. With more entrepreneurs
willing to and able to take risks and develop new businesses, singapore will be able to
generate economic growth and compete with foreign companies.
Promoting continuous learning among the workforce As singapore becomes more
globalised, some jobs will become obsolete and be replaced by new jobs. The Singapore
workforce development agency was established to ensure that the workforce remains
competitive by creating opportunities for workers to enhance their employability through skills
upgrading. Financial assistance is also given to workers so that they can take up courses to
upgrade themselves. This ensures that singapores workforce remains upgraded and
competitive so that foreign investors will continue to invest in singapore which will lead
to the creation of more jobs and more economic growth.

Attracting Foreign Talent Due to a declining birth rate and the requirement of new skills in a
knowledge-based economy, there is a need to attract foreign talent to meet singapores
manpower needs. Foreign talent also brings to singapore new business contacts which
will lead to more business opportunities and jobs in singapore. Foreign talent also adds to
the diversity to the cultural landscape of singapore and this makes the country more
cosmopolitan.

Strategy #6 : Managing Resources Efficiently Managing the Environment


Managing the environment is crucial to protect the environment because environmental
degradation is often a consequence of globalisation. Environmental preservation is one of the
three pillars of sustainable development in addition to economic development and social
progress.
Managing limited land resources As land is scarce in singapore, the management of limited
land resources is necessary so that high standards facilities for housing, transportation,
recreation, commerce, defence and education can be built. These facilities will enable
singaporeans to enjoy a good quality of life and ensure that singapore can sustain growth in a
globalising world.
It is also important to preserve nature sites so that future generations can enjoy the natural
environment in singapore. land is set aside for nature reserves so as to preserve a wide range of
natural habitats in singapore, from forests to mangrove swamps. Land is also allocated for waste
disposal because land on singapore itself is limited. A waste disposal landfill was created on
Pulau Semakau to manage singapores waste disposal needs. This contributes towards
sustainable development by preserving nature for future generations and ensuring our
future waste disposal needs are met.
Co-operation with regional and international organisations Singapore is active in solving
regional and international environmental problems which may affect singapore and other
countries in the region. When environmental problems like the haze happens, it disrupts
economic and tourist activity. By co-operating with these organisations to solve the
problems, economic growth will not need to be halted as economic activities will be able
to continue. Singapore has also cooperated at the international level to look into environmental
problems that are global in nature.
Public Education In order to ensure that singapores efforts in environmental protection to be
effective, singaporeans must adopt environmentally-friendly ways and be instilled with a sense of
responsibility and personal interest to keep their surrounding clean. By educating members of
the public and school children on how to go about recycling, minimising their waste and
reducing the excessive use of plastic bags, Singapore will be able to sustain its
environment and preserve it for future generations.

You might also like